How Synthetic Data Can Accelerate Digital Transformation in Local Institutions


Local government is under constant pressure to modernize services while ensuring citizen privacy and regulatory compliance. Synthetic data, generated by advanced Large Language Models (LLMs), offers a powerful tool for local institutions to innovate safely and efficiently.


Why Should Local Institutions Care?

Municipalities, local councils, and public agencies often face challenges with sensitive data: accessing, sharing, and using real citizen data is slow, risky, and highly regulated. Synthetic data allows teams to build, test, and deploy digital solutions—without ever exposing personal information.


Key Benefit for Local Institutions

Shorten development cycles for digital projects and minimize legal risks by using privacy-safe, high-quality synthetic datasets that reflect real public administration scenarios.


What’s New in the Latest Research?

A recent arXiv paper shows that synthetic data generated by LLMs (like GPT-4 or open-source models) can be nearly as effective—or sometimes even better—than real data for building and testing digital solutions. The research demonstrates:

  • Better performance: AI tools trained on synthetic data can match the results of those trained on real citizen data (Wang et al., 2023).
  • Less bias: Synthetic datasets make it easier to avoid systemic errors and unfairness (Nguyen et al., 2022).
  • Greater generalization: Solutions tested on diverse, synthetic scenarios are more robust to real-world surprises (Zhang et al., 2023).

Practical Ways Local Institutions Can Use Synthetic Data

  • Test and prototype new digital services (e.g., citizen portals, permit applications) without risking exposure of actual personal data.
  • Develop and audit AI tools (for automating administrative workflows, document processing, or helpdesks) using data that simulates real public service interactions.
  • Train staff and run simulations on realistic but anonymized cases, improving readiness and compliance.

Let’s Start the Conversation

How could your local institution benefit from synthetic data? Share your ideas or experiences in the comments, send us your questions, or follow our LinkedIn page for more case studies and best practices in digital public services.