BGD Outlook 2026: Valeriya Ionan

2026 will be remembered as the year governments moved from talking about AI to deploying it at scale. The question is no longer whether AI should be used in the public sector, but whether states are capable of integrating it fast enough and safe enough to remain effective. Those with a clear vision, institutional courage and the ability to act strategically while staying agile will move first. They will build agentic states — governments designed to operate with speed,autonomy and data at their core, where AI is not an add-on, but foundational infrastructure that increases governance efficiency, improves citizen experience and enables entirely new economic models.

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What many governments are now cautiously piloting, Ukraine was forced to deploy under extreme conditions

Ukraine is already on this trajectory. Its ambition to b among the world’s top three countries in AI adoption by 2030 is not aspirational rhetoric, but a logical continuation of its digital transformation success and wartime reality. Under conditions where delays cost lives and manual processes collapse under pressure, automation, real-time data and rapid decision-making became existential necessities. What many governments are now cautiously piloting, Ukraine was forced to deploy under extreme conditions. This experience is shaping some of the earliest practical playbooks of the agentic state - models that increasingly align with the global shift toward AI-native strategies across both government and business.

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Modern warfare is becoming a technological contest defined by speed of iteration, autonomy and the ability to integrate innovation

The second structural shift of 2026 is the normalization of defence technologies. Ukraine’s experience with drones, electronic warfare, unmanned ground vehicles etc is not only about national survival. It reflects a deeper geopolitical transformation: modern warfare is becoming a technological contest defined by speed of iteration, autonomy and the ability to integrate innovation directly into operational reality. Defence-tech is no longer a closed,slow-moving sector. Innovation cycles are compressing from years to months,driven by the demand for solutions that are stress-tested in high-intensity environments. This is pushing states toward deeper cooperation at the level of experts, joint R&D and public-private collaboration.

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Systems that outperform humans in many economically significant tasks become baseline infrastructure for states and businesses

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The third pillar is the emergence of a new innovation cycle, an exponential leap in which the next decade will deliver more progress than the previous century. Medtech, biotech, edtech, advanced mobility and autonomous systems are entering a phase of accelerated growth. At the center of this shift is a new paradigm of human-AI collaboration. This is not a story of replacement, but of augmentation: systems that outperform humans in many economically significant tasks become baseline infrastructure for states and businesses, raising productivity, resilience and competitiveness for those who know how to integrate them.

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The next phase of global competition will not be defined by access to technology alone

Closely connected to this is the rise of wearables and robotics as everyday infrastructure. Continuous health monitoring, biometric data, personalised medicine, household and industrial robots and AI-driven assistants are beginning to reshape how societies think about care, work and learning. These technologies support the global focus on longevity and preventative healthcare,while transforming education from static credentials to dynamic portfolios of skills and outcomes. AI tutors, personalised learning paths and adaptive systems are moving from experimental pilots to standard practice.

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States that can redesign governance for an AI-native world, aligning strategy, talent, data, and regulation will set the pace

Taken together, these shifts point to a single conclusion: the next phase of global competition will not be defined by access to technology alone, but by the ability of institutions to act with agency. States that can redesign governance for an AI-native world, aligning strategy, talent, data, and regulation will set the pace. Those that cannot will find themselves managing increasingly complex systems with tools built for a different era. 2026 is the inflection point where this divergence becomes impossible to ignore.