The Finnish government has launched a politically contentious plan to transform the country’s entire public sector into an artificial intelligence (AI)-powered system by 2031.
With the aims to reshape public services, the ambitious reform mission is expected to result in the elimination of thousands of public sector jobs, a prospect that is causing significant concerns among the country’s public services unions and political parties ahead of parliamentary elections in April 2027.
Under the scope of the proposed transformation, state agencies, municipalities and counties tasked with delivering healthcare services in Finland would gradually adopt a shared administrative platform that will use the most advanced available AI models.
A number of key components of the public sector transformation plan were revealed in by the Ministry of Finance (MoF) in August. The MoF is tasked with conducting the primary cost and savings analysis relating to the project.
The proposed shared platform is intended to support a wide range of public administration tasks while increasing productivity across the full offering of government delivered services, said Juha Majanen, the MoF’s permanent secretary.
“The rationale for the plan is to oversee a high-value project that will build a shared AI platform for both state-run municipalities and the healthcare services managed by counties,” said Majanen. “One of several major challenges will be to use the most advanced AI models available on the market by the time of launch. The project will be implemented on a phased basis to ensure a smooth transition period. We see numerous long-term cost-efficiency gains in terms of how public administration is operated in Finland, in addition to increased productivity benefits across government services.”
The administration of healthcare in Finland is organised in to 19 Regions and 21 so-called Wellbeing Services Counties (WSC). The precise content and the transformative scope of the plan will become known once the MoF produces a report outlining concrete proposals to government in support the project. The report is expected by year-end 2026, or during the first quarter of 2027.
The government is hoping to win cross-party support for the AI-led public sector administration transformation (PSAT) project. To this end, the MoF’s project execution report is likely to include commitments to minimise job losses through natural attrition, early retirement packages and the non-replacement of retiring employees.
Jobs losses
The MoF has conceded that job losses are already occurring in Finland’s public sector areas as AI takes over tasks previously handled by human staff.
Although the MoF has not indicated provisional project costs or savings, a report commissioned for then prime minister Juha Sipilä’s conservative coalition government in 2019 projected that a comprehensive programme of AI use in the public sector area could potentially raise productivity by 20% while generating savings of up to €8bn.
If correct, the magnitude of savings envisioned in the Sipilä report would enable the present administration to bolster government efforts to secure long-term funding for Finland’s financially stressed welfare state against the backdrop of demographic pressures and volatile public finances. These fiscal obstacles will continue to challenge government spending moving forward. Moreover, the expanded use of AI across state-delivered services in Finland is also viewed by legislators as a positive contributor to alleviating skills shortages in the labour market.
Strong resistance is expected to the PSAT project, especially from public sector trade unions. Union Pro, which represents over 110,000 professionals working in the private and public sectors, is cautioning the Finnish government against an over-reliance on cost savings to elevate productivity in state-delivered services.
Government plans to use AI to transform state services must exclude provisions that focus only on achieving savings in the public sector, said Niko Simola, the president of Union Pro.
“We are not against the deployment of new technologies in a sensible manner, but we would oppose the use of AI if the primary motivation is to secure savings only,” said Simola. “Whatever the government decides on AI in the public sector transformation, the final implementation plan should not overlook what impact the changes will have on employees and on how public services are both managed and delivered to ensure quality and higher productivity.”
Clarity and transparency should ideally become fundamental objectives for the Finnish government if it wants to bring stakeholders onboard the PSAT project, said Umair Ali Khan, a senior researcher and consultant at Finnish AI Region, a European Digital Innovation Hub (EDIH) based in Helsinki.
“Public sector AI adoption requires a very careful and responsible approach,” said Khan. “Each proposed use should clearly state the problem it solves, the value it is expected to create, the risks it introduces, and the evidence that will show whether it works. Employees, unions, service users, legal experts and technical specialists should be involved before deployment, not consulted after the main decisions have already been made.”
The ultimate goal for the PSAT project, said Khan, should not specifically be an AI-based public sector with fewer human staff, but improved administrational platforms and structures that use AI in functions and areas where the technology can create proven public value.
“Automate what AI can do reliably, support employees where technology can improve their work, and keep people where judgment and accountability still matter,” said Khan.
AI surge
The government’s planned fast-tracking of the PSAT project reflects a strong surge in the uptake of AI across the private and public sectors in Finland.
In a survey run by Statistics Finland (Tilastokeskus) in July, 80% of employees and businesses interviewed said they consider AI as a beneficial tool to improve productivity in the workplace, despite lingering concerns over job security risks and the uneven adoption of the technology.
Workers and businesses in Finland tend to use AI at a marginally higher rate than users across the rest of Europe, said Pertti Kangassalo, a senior statistician and chief actuary at Statistics Finland.
“What the collated data from our survey shows is that Finnish consumers appear to use AI slightly more often than the average across the European Union, both in their private life and at work,” said Kangassalo.
The Statistics Finland survey showed that 72% of those AI users questioned believe that AI technology enhances the quality of their work, while 57% said AI made their work tasks easier to manage. Young adults indicated the strongest support for AI in the workplace. Among respondents aged 18 to 29, almost 89% said AI accelerated the completion of their tasks.
A separate survey conducted in August among 1,000 small and medium-sized businesses by Ukko.fi, Finland’s largest light entrepreneurship and invoicing service platform, found that 73% of respondents viewed AI as an opportunity, while 27% considered it a threat. Around 50% of those surveyed said AI has not materially changed the way they work.
