In the past decade, the landscape of governance has experienced seismic shifts, driven by rapid technological advances and changing global dynamics. Governments worldwide are finding that to navigate this evolving terrain, it is necessary to transform their operational and strategic frameworks.
This transformation is not merely about adapting to new technologies or policies; it's about fundamentally reshaping how governments think, operate and deliver services to their citizens. It is about redefining working models and skill sets in government.
In parallel to this transformation in governance models, the world of work (private and public) is witnessing a big rearrangement. According to the World Economic Forum’s Future of Jobs Report 2025, 44 per cent of workers’ core skills are expected to change in the next five years, driven by rapid advancements in technology, particularly artificial intelligence (AI).
Automation, AI, and machine learning are not only reshaping industries but also redefining the very nature of jobs, creating new opportunities while rendering some roles obsolete. As businesses and governments grapple with this unprecedented shift, one thing is clear: the future of work will demand adaptability, innovation and a commitment to life-long learning.
To manage such changes and address complex challenges from economic diversification to digital transformation, governments around the world historically relied heavily on external consultants. In 2023 alone, GCC governments spent over $6 billion on consulting services.
However, trends and studies conducted globally are pointing out that this carries that risk of creating dependency, which has its drawbacks. This was prominently highlighted by economists such as Mariana Mazzucato from the London School of Economics, who argued that such reliance can hollow out essential capabilities within public institutions. This outsourcing trend risks losing institutional memory and strategic agility, making it difficult for governments to respond to new challenges independently.
The pitfalls of overreliance on consultants are evident across various national examples. The UK, for instance, spent upwards of £1.5 billion ($1.9 billion) on external consultants in 2020, prompting the National Audit Office to issue warnings about the erosion of internal expertise.
Similarly, Australia reported significant expenditures exceeding A$1.1 billion ($684million) in the same year. Both countries have recognised the unsustainable nature of this trend and are working to reverse it.
There is no doubt that consultants can add value and consulting firms do bring expertise. But no external adviser can fully replicate the contextual understanding, cultural insight and long-term commitment of a well-trained civil service.
It is imperative for governments to regain control over their strategic direction as the rapid pace of change dictated by the pervasive impact of AI on all sectors mandates a rethinking of traditional governance models. This means not only reskilling the civil service but also building a comprehensive suite of internal capabilities.
Governments need a robust internal ecosystem capable of generating innovative solutions and strategic insights. This involves investing in people – training public servants in critical thinking, strategic problem-solving and digital literacy.
It also means creating institutional structures that promote innovation, such as in-house consulting hubs that can perform the dual role of executing projects and retaining knowledge within the government apparatus.
Building these capabilities from within offers several advantages. First, it ensures that decisions are informed by a deep understanding of local contexts and long-term policy implications.
Second, it fosters a culture of continuous learning and adaptation among public servants, which is essential in a rapidly changing world. Third, it reduces costs over the long term, as less money is spent on external consultants and more is invested in sustainable internal development.
This mindset shift should be net positive. Looking at the GCC’s government combined consulting spend, a mere five per cent reduction could save $300 million annually – funds that could be redirected to train public servants, build in-house consulting hubs and foster innovation from within.
Such hubs would not only reduce costs but also ensure that institutional knowledge stays where it belongs: within government. As governments adapt to the evolving demands of the digital age, fostering a workforce that is equipped with analytical thinking, creativity and internal consulting skills becomes crucial.
Public servants must hone their ability to analyse complex data and craft innovative solutions to contemporary challenges, transcending traditional approaches.
This skillset not only enables them to negotiate intricate policy landscapes but also to design and implement innovative, sustainable solutions that resonate with both local and global standards.
This strategic enhancement of internal skills is essential for building agile governments that are prepared to lead their nations into a future marked by rapid technological and societal changes.
