Trends in the public sector

In 2026, the public sector will face relentless pressure to modernize amid economic, social and technological shifts – yet many agencies remain constrained by legacy systems and tight budgets. Modernization isn’t just about technology; it’s about rethinking operations to become data-driven, integrating fragmented systems and building trust through smarter decisions.

At the same time, global risks – from cybersecurity threats to climate resilience – demand bold leadership. Governments must balance innovation with responsibility, setting standards for AI ethics, privacy and digital sovereignty while driving cross-border collaboration. These aren’t just trends – they’re urgent priorities. Organizations that act now will define what smarter, more resilient government looks like for decades to come.


Watch the webinar Top Data and AI Trends for Government in 2026

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2026 predictions from SAS government experts 

What’s in store for government data and AI? Our experts look ahead. Will their predictions be on point? 


Governments around the world will increasingly pursue “Sovereign AI” solutions to ensure control over data and compute resources within their borders, driving the creation of national AI ecosystems and regional data centers.

Vrushali Sawant, Data Scientist, SAS Data Ethics Practice


In 2026, we will see identity management become the backbone of inter-agency agreements to ensure lawful, fair, and secure data exchange. This will promote cross-agency data sharing, enabling more contextual fraud, waste and abuse risk detection and mitigation.

John Stultz, Principal Solutions Architect, Risk, Fraud & Compliance


With more EU AI Act deadlines approaching and regulators preparing for the first enforcement actions, as well as the emergence of more AI regulatory frameworks globally, in 2026, organizations will increasingly be looking at AI governance to ensure compliance but also as an innovation driver.

Kalliopi Spyridacki, Chief Privacy Strategist, EMEA & Asia Pacific


Public agencies will capture institutional knowledge by training retrieval augmented generation (RAG) systems on the documented expertise of senior staff, creating AI mentors that provide junior employees with on-demand access to decades of accumulated wisdom and best practices. Unfortunately, this will also lead to more instances of AI sabotage where workers, concerned with being replaced by AI, purposefully produce poor content to contaminate the training.

Steven Tiell, Global Head, AI Governance Advisory


What’s on the horizon for other industries? Check out the top 15 predictions.

Expert perspectives in SAS blogs

Spotlight on large language models (LLMs)


By 2026, governments will use large language models (LLMs) to generate synthetic, unstructured text data for research, training and testing. In fact, we’re already using them this way.

That’s what Tom Sabo and Jerry Xiao predict in their blog Using LLMs to create synthetic data and tangible progress in the public sector.

 

 

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If you are looking for evidence, not hype, check out how agencies around the world are tackling compliance and integrating data across legacy systems and automating workflows. Look no further – SAS Customer Success Stories. It’s where agencies share their challenges and approaches – and their journey to improving mission-critical outcomes.

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