A study by the consulting unit Applied Research & Consulting of CATÓLICA-LISBON and Implement Consulting Group, conducted for Google, estimates that Generative Artificial Intelligence (AI) has significant potential to boost productivity in Portugal’s Public Administration, with an estimated 9% increase over a decade, equivalent to an annual contribution of €1.2 billion to the Portuguese GDP.
The findings of the study, entitled “The AI Opportunity for eGovernment in Portugal”, were presented on Thursday, October 23, at the EY Auditorium at CATÓLICA-LISBON, by João Confraria, CATÓLICA-LISBON professor and author of the study, and Sofia Marta, Country Manager of Google Cloud Portugal, at an event that also featured representatives from SPMS – Shared Services of the Ministry of Health and the Superior Council of Administrative and Tax Courts.
The study aims to assess the economic opportunity of implementing Generative AI in the Public Administration and to define a strategy to scale its benefits across government institutions. The application of this technology in the public sector, as the report highlights, seeks to redesign organizations and processes to make public services more efficient, transparent, and people-centered, facilitating faster, simpler, and lower-cost interactions between citizens, businesses, and the State.
Although still in an early stage, Portugal’s Public Administration has already begun integrating Generative AI into its operations, with more than half of surveyed public employees reporting that they already use AI tools. However, the study suggests that this potential remains underutilized. One of its findings shows that around 66% of public sector employees, approximately 200,000 people, could have their daily tasks optimized, freeing up time for higher-value activities such as citizen service and complex problem-solving.
The benefits of AI also extend to the business sector, as the technology could significantly reduce government bureaucracy, long regarded as one of the main obstacles to doing business in Portugal. Improvements could be seen, for example, in the simplification of public procurement procedures, the licensing process, and the automation of regulatory reporting.
Despite this potential, the study identifies five structural barriers that continue to hinder AI adoption in the Public Administration: fragmented decision-making and isolated pilot projects with limited scale; fear of violating regulations, particularly the GDPR; regulatory uncertainty regarding the use of cloud computing; the risk of technological dependency on single vendors; and a lack of focus on citizen impact, which may undermine public support for these initiatives.
To overcome these challenges, the report proposes that the Government adopt a phased and strategic approach, starting with internal, low-risk applications, which account for about 20% of the total potential, before progressing to more complex, citizen-facing services. In parallel, it recommends two structural measures: first, to establish regulatory clarity around cloud usage through a unified and secure framework; and second, to adopt smarter technology procurement practices that ensure interoperability, open standards, and prevent vendor lock-in.
According to the study, this pragmatic approach will help build a solid foundation for a sustainable digital transformation, mitigating risks while ensuring that the gains from Generative AI translate into greater efficiency, innovation, and public value in the long term.
For Filipe Santos, Dean of CATÓLICA-LISBON, the study’s findings represent a decisive opportunity to rethink public sector efficiency in an increasingly demanding economic and social context. He emphasizes that although the public sector does not face the same competitive pressures as private enterprise, its transformative potential is immense and must not be overlooked:
“The public sector, by nature, does not operate under the ‘adopt or die’ logic that drives many private companies, but that does not mean it can afford to lag behind. At a time when we face a difficult equation, marked by high taxation, an aging population, and growing defense requirements, Artificial Intelligence emerges as a unique opportunity to rebalance public finances and build a more sustainable and efficient State.”
Read the full study here.