GovTech is Changing: Governments Are No Longer Buying Technology, but Investing in Sustainable Impact
Deloitte Ukraine and Global Government Technology Centre Kyiv Report
The logic of public-sector digital transformation investments is undergoing a fundamental shift. Governments are increasingly moving away from purchasing standalone IT solutions and instead investing in long-term outcomes—resilience, trust, efficiency, and measurable economic impact. These findings are presented in the report “GovTech Investment Trends: An Overview”, prepared by Deloitte Ukraine and the Government Technology Centre Kyiv (GGTC Kyiv). The report was first presented on 21 January during GovTech Day at Ukraine House Davos, held as part of the World Economic Forum.
“GovTech Investment Trends: An Overview” is the first comprehensive global analysis of investments in public-sector digital technologies. It covers the core pillars of the GovTech ecosystem, including AI, cloud infrastructure, software and process automation, smart cities, and digital public infrastructure (DPI), eID, payment systems, and seamless interoperability between government registries.
What investment trends are shaping GovTech today?
Cloud and AI are becoming the foundational infrastructure of the state
Over the past four years, spending on public cloud services has more than doubled—from USD 332 billion in 2021 to USD 723.4 billion in 2025—while investment in artificial intelligence has nearly quadrupled, rising from approximately USD 342 billion in 2021 to around USD 1.48 trillion in 2025. The public sector is among the fastest-growing investors in these technologies, increasingly shifting toward IaaS and PaaS models.
From siloed solutions to digital public infrastructure
The risk of duplicating registries and platforms is driving governments toward a Digital Public Infrastructure (DPI) approach: the use of shared, reusable “digital building blocks” (eID, payment systems, basic registries, and data exchange layers) and open-source solutions, with their application across sectors. At the same time, the transition to DPI—being primarily a political and institutional decision—requires clearly defined roles, mandates, and an appropriate organizational structure, in addition to technical implementation.
Cyber resilience is becoming an economic asset
Cybercrime already costs the global economy an estimated USD 9.5 trillion (in 2024) and is expected to rise to approximately USD 10.5 trillion in 2025. Audits in the United States and the United Kingdom reveal a “modernization gap,” with developed countries continuing to allocate a significant share of their IT budgets to maintaining outdated systems. The deployment of AI services further will amplify risks by making attacks cheaper and more scalable, turning cyber resilience into a non-negotiable prerequisite for sustainable GovTech development.
Public and economic values are becoming the standard for GovTech investments
Governments and donors are increasingly requiring assessments of the economic and social impact of digital solutions—both before and after implementation. This shift allows digitalization to evolve from a cost center to an investment with measurable returns. However, standardized methodologies for assessing the economic impact of digital solutions remain largely absent. The GovTech community and public institutions must prioritize the development and adoption of outcome-driven metrics that capture reduced service delivery times, financial savings, and the prevention of state losses, including those caused by fraud or cybercrime.
Ukraine as a case of scalable public value via digitalization
The report highlights GovTech case studies that demonstrate the effectiveness of this approach. In particular, Ukraine’s Diia ecosystem has already generated UAH 184 billion in measurable public value, exceeding its development costs many times over. The Prozorro.Sale system has attracted more than USD 2.17 billion for the state, while the implementation of AI solutions—including Diia.AI—illustrates a shift toward an “agentic state” model built around proactive public services.
“Deloitte systematically combines analytical research with the implementation of technological projects in the public sector – from developing strategies and architectures to implementing digital solutions. For us, this report is not just an analytical product. It is a guide to the GovTech market, highlighting its specifics and challenges and enabling us to move forward and further develop this area. State digitalization has evolved to the point where measurable economic impact and public value begin to count more than the scale of technology implementation. The Report demonstrates that GovTech is refocusing its logic from projects on investments, which should be aligned with the strategic development of states and communities and supported with clear economic indicators, systematic risk management, and long-term public value. As governments and institutions, international partners, and businesses increasingly need to consider digital public infrastructure, cyber resilience, and data quality – interconnected elements of modern economic policy – when making data-driven decisions, Deloitte Ukraine joined in preparing this report to help provide a comprehensive view of trends in public digitalization and highlight areas that require further attention from the professional community,”
– Olena Boichenko, Partner, Head of Consulting at Deloitte Ukraine
“Today, GovTech is not about digital products but rather about the state's strategic investments in institutions, digital infrastructure, and data. In a new reality of overlapping crises, these investments lay the foundation of our resilience, effectiveness, and citizen-centricity. Ukraine’s experience shows that a country’s digital infrastructure becomes critically important in times of war and deep transformations. This report is designed to help governments and partners see the global trends behind the numbers and make informed decisions that have a scalable impact on states and societies,”
— Zoya Lytvyn, Head of the Global Government Technology Center Kyiv
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Anastasiia Lytvynenko
Deloitte Ukraine PR & Communications
alytvynenko@deloittece.com
