Deltek Reports on Agency Blockchain and Artificial Intelligence Adoption

Deltek’s Federal Market Analysis team just completed its latest report on the use of emerging technologies by federal government agencies. The report takes a look at proliferating artificial intelligence/machine learning, blockchain technology, and sensor technologies, with as tight a focus as possible on defining use cases and providing available spending data. Deltek’s research shows uneven adoption of these three technologies depending on their evolutionary curve. Sensor technologies appear to be in widest use across the federal government as agencies grapple with the reality of ubiquitously connected devices – the so-called Internet of Things. Meanwhile, a basic type of artificial intelligence is also spreading in the form of machine learning programs, virtual assistants, and autonomous transportation platforms. Lastly, the adoption of blockchain, which promises to seriously disrupt how agencies do business, is in the initial stages of piloting and development. This week’s post examines some of Deltek’s findings on AI/machine learning and blockchain. A separate post by the Federal Market Analysis team will cover sensor technologies.

Blockchain Technology

Since the inception of Bitcoin in 2009, blockchain technology has grown rapidly in the commercial world. The proliferation of financial technology (FinTech) further expanded with the 2015 debut of Ethereum, “an open-source, public, blockchain-based distributed computing platform featuring smart contract functionality.” The flexible functionality of Ethereum generated further interest among federal agencies, which took their first steps to understand the blockchain in 2016. These steps included the creation of pilot programs and engagement with groups like the DC Blockchain Center and the Government Blockchain Association. The General Services Administration is also providing a practical outlet for blockchain adoption through its Emerging Citizen Technology Program (ECTP), announced by the agency’s Technology Transformation Service in October 2016. The program fosters pilot efforts for federal agencies to adopt and make efficient use of emerging technologies like blockchain and related smart contracts. Engaging with the ECTP is highly recommended for industry partners.

Deltek found that in connection with these programs there is considerable interest among agencies in utilizing blockchain-based smart contracts for a variety of purposes, including supply chain management, health care, data security, postal service functions, and digital contracting. The blockchain provides a string of code that is added to every transaction, creating a chain of data blocks that is transparent and therefore secure. Any unauthorized alteration of the blockchain in a smart contract can be identified immediately and the technology can be applied to practically any type of transaction. Agencies face an uphill battle in budget challenged times to invest in blockchain technology, but blockchain use cases are compelling. Agencies will need significant help from contractors in areas identified in the report.

Artificial Intelligence/Machine Learning

Another area of burgeoning agency interest is artificial intelligence. The basic form its use is presently taking is in machine learning – a type of software that “learns” tasks based on a narrow set of parameters. Agencies are already investing in machine learning with nearly $40M spent on it since 2014. Agency use cases for machine learning tech span everything from cybersecurity and health IT to autonomous vehicles and intelligence data analysis.

Machine learning/AI technology features prominently in the Department of Defense’s R&D budget, with programs containing a related AI/machine learning component projected to average more than $2B per year through fiscal 2022. DOD’s interest in AI gets all the press, but civilian agency interest is high as well with improving customer service through the use of virtual assistants, to automating space exploration, rooting out waste, fraud, and abuse, and improving cybersecurity being among the top priority areas.

Deltek expects investment in AI and machine learning to remain steady in the Trump administration much as it did toward the end of the Obama administration. The technology is simply too important and competition from China is too intense for it to be ignored.