OECD says governments need stronger delivery capacity for digital transformation

The OECD says governments have made progress in building the foundations of digital government, but must now focus on turning those foundations into measurable benefits for people and businesses.

In its Digital Government Outlook 2026, the OECD says governments are operating under pressure from rapid technological change, fiscal constraints, rising public expectations and the growing adoption of AI. The report argues that digital technologies and data are now essential to public-sector performance, resilience, and trust.

The Outlook draws on the 2025 OECD Digital Government Index and the Open, Useful and Re-usable Data Index. It covers 36 OECD members and eight accession candidate countries, including Argentina, Brazil, Bulgaria, Croatia, Indonesia, Peru, Thailand, and Romania.

The report finds that OECD countries have strengthened key digital foundations, including shared infrastructure, interoperable systems, digital identity, cloud services and open data frameworks. The average Digital Government Index score rose from 0.61 in 2023 to 0.70 in 2025, while the OURdata Index increased from 0.48 to 0.53.

However, the OECD says progress remains uneven. Countries tend to perform better in setting strategic direction and policy frameworks than in implementation and monitoring. The report says governments often have strategies and enabling mechanisms in place but struggle to embed them in day-to-day operations, workflows and accountability systems.

AI adoption is one of the main areas where this gap is visible. The OECD says AI is already used in at least one area of government in almost every OECD country, and most countries have strategies, oversight bodies, and training programmes. Yet only 28% of OECD countries systematically assess the financial and non-financial impacts of AI use in government.

The report also points to gaps in digital skills and investment evaluation. Only six OECD countries have a dedicated strategy for developing digital skills among civil servants, while just one in four systematically evaluates whether completed digital projects delivered their intended results.

The OECD says the next phase of digital government should focus on wider adoption of interoperable systems, stronger data governance, more strategic investment and skills development, trustworthy AI at scale, and more joined-up, user-centred public services. The OECD argues that governments must move beyond fragmented digital initiatives and embed digital technologies, data and AI into everyday public-sector operations.

Why does it matter?

The report suggests that the challenge facing digital government is no longer primarily technological. Many governments have already established digital identities, cloud infrastructure, interoperable systems and data frameworks. The next challenge is ensuring these foundations translate into better public services, greater efficiency and stronger public trust.

The findings also highlight a growing implementation gap in areas such as AI. While governments are increasingly adopting AI tools and digital technologies, many lack the skills, evaluation frameworks and governance mechanisms needed to measure outcomes and scale successful initiatives. As a result, the effectiveness of future digital government reforms may depend less on technology adoption and more on institutional capacity and execution.

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