AI in municipalities: applications, potentials and obstacles

Despite promising approaches, only a few municipalities in Germany have used AI solutions to date. In recent years, AI applications have only been used sporadically in local authorities and were mostly in the pilot or planning stage. Insights into the actual added value of AI applications in municipal practice are only available in a few cases so far. This study analyses the current status of AI applications in German municipalities and analyses the potential for and obstacles to their dissemination.

To this end, the study evaluates 143 practical examples of AI applications in municipalities and analyses seven selected case studies with regard to their objectives, added value and challenges. It shows that AI applications are being implemented in municipalities of all sizes and in various municipal areas of activity. The focus is on mobility, citizen services and administration as well as on local public utilities. The solutions presented in the case studies illustrate how municipalities use AI in regular operations, realising different types of financing (with and without funding) and implementation strategies (‘make’ or ‘buy’).

Turnkey solutions from service providers, often start-ups, enable even less digitised municipalities to utilise the potential of AI. Examples include chatbots, solutions for waste detection, traffic data collection and process optimisation of wastewater treatment plants. The case studies analysed illustrate that these solutions, often financed from the municipal budget, generate concrete added value for local authorities.

In contrast to turnkey solutions, the in-house development of AI solutions often places high demands on the data infrastructure and governance as well as the expertise of the municipalities. Some large cities and municipal utilities in particular are focussing on this approach.