Governments, fueled by populism, are now taking regulatory aim at the tech industry, which the public considers a source of disinformation and discord. But curbing the might of the tech giants is a challenge that will require governments to use new regulatory tactics. These efforts will appeal to constituents and civil servants in the short term, but public-sector leaders’ focus on regulatory action risks blinding them to growing operational vulnerabilities in customer experience and technology-enabled programs.
These challenges follow two years in which the public sector struggled with post-pandemic social and economic realities and the rise of new technologies. Two years ago, Forrester predicted that public-sector hesitancy to adapt would hinder crisis preparedness. For 2024, we expected that government leaders who heeded our warnings would be well placed to tackle two emerging issues: at home, the economic and social implications of generative AI (genAI), and abroad, the desire from emerging superpowers to end the US-led liberal democratic world order.
As it turns out, we were right: GenAI-created disinformation failed to have any material impact on major elections, and increased protectionism in the name of digital sovereignty caused the emergence of three regional tech markets.
As we approach 2025, concerns about political and economic uncertainty, extremism, AI safety, and negative effects of social media on democracy continue to challenge the resilience of societies the world over.
Weighing all these factors, we predict that 2025 will be a year in which:
- Two or more middle-power nations will sign a NATO-like digital defense treaty. This treaty will establish cross-border mechanisms to challenge the power of tech giants, which exert more influence over citizens, markets, and elections. Big countries such as India, Brazil, and the US have the scale to ban or force operational changes at companies like TikTok and X, but smaller nations struggle with solo efforts to regulate these firms. Separate attempts by Australia and Canada to force platforms to pay for media content triggered retaliatory news bans by Meta and Google. These new middle-power alliances will emulate agreements that enable coordinated action and reduce compliance costs, like the UK-Singapore Digital Economy Agreement and joint-enforcement partnership between European and Australian internet regulators.
- At least one major country will add negative AI effects to health and safety regulations. This will pave the way for workers’ compensation claims against organizations that fail to protect them against the detrimental effects that AI in the workplace has on their physical, mental, and social well-being. More than half of online adults in the US, the UK, and Canada say that it’s important for governments to protect them from the risk of harmful AI content, and 41% of online adults in Australia and 36% to 47% of those in Europe say they don’t trust big tech to manage AI risk. As the societal implications of AI use continue to dominate regulatory discourse, these numbers will rise and spur regulatory action in at least one country — despite industry lobbying against it. Public- and private-sector leaders shouldn’t wait for regulation to mitigate the negative effects of workplace AI — or to build a workforce that reaps its benefits. Start by boosting employees’ AI quotient to ensure that the entire organization has the understanding, skills, and ethics to use AI properly.
- Government CX will dip for the fourth year in a row. Political instability, shifting priorities, and budget constraints will stymie departments’ attempts to reverse years of declining or stagnant customer experience (CX) quality — despite ongoing rhetoric around customer obsession, cross-departmental CX investments, and the proliferation of government chief customer officers. Forrester’s Customer Experience Index (CX Index™) data shows that CX quality in government has declined since the COVID-19 pandemic, just as it has in the private sector. For example, US federal CX declined by a statistically significant 1.3 points on our 100-point scale from 2021 to 2024; in Australia, government CX declined a whopping 3.5 points in 2024 alone. Forward-thinking government CX leaders can overcome this inertia by overhauling core CX capabilities and increasing whole-of-government alignment around key customer journeys.
Read our full Predictions 2025: Public Sector And Government report to get more detail about each of these predictions and read additional predictions. Set up a Forrester inquiry or guidance session to discuss these predictions or plan out your 2025 strategy.
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