Demos Helsinki report: AI is not a shortcut to public sector savings

A report by think tank Demos Helsinki, conducted as part of a European research project coordinated by the Kalevi Sorsa Foundation, indicates that artificial intelligence and automated decision-making are not providing rapid cost savings for the public sector.

While officials and decision-makers often view AI as a tool for significant fiscal savings, the study suggests that the technology primarily streamlines routine tasks while simultaneously creating new types of work and increasing costs. Experts note that productivity gains require long-term investments in both information systems and personnel skills.

The report highlights practical examples from the Nordic region. In Finland, the Finnish Immigration Service (Migri) has used automated decision-making for eight types of residence permits since 2016. While routine decisions are automated, staff must now dedicate more time to complex cases, quality assurance, and system testing. Similarly, Norway's social security agency, Nav, has automated sickness benefit decisions since 2018.