Harnessing artificial intelligence in the public sector: the critical role of strategic foresight in driving performance

Purpose This study aims to examine how artificial intelligence (AI) capabilities influence organizational performance in the public sector, with strategic foresight as a mediating mechanism. It investigates how institutional enablers, including government incentives, regulatory support and perceived financial costs, contribute to AI capabilities and how these capabilities translate into performance outcomes. Design/methodology/approach Drawing on the resource-based view, survey data were collected from 303 Vietnamese public officials and analyzed using partial least squares structural equation modeling. AI capabilities were conceptualized as a second-order construct encompassing AI basics, AI skills and AI proclivity, while strategic foresight comprised environmental scanning and strategic selection. Findings Government incentives, regulatory support and cost awareness significantly enhance AI capabilities. These capabilities have both direct and indirect effects on performance through strategic foresight, which partially mediates the relationship. Although perceived financial cost strengthens AI capabilities, it does not directly affect performance. Organizational innovation shows no significant influence on AI capabilities or performance, emphasizing the greater importance of institutional support and foresight capacity. Originality/value This study advances understanding of how AI capabilities contribute to public value creation by integrating strategic foresight into the capability and performance link. It highlights that technology adoption alone is insufficient without supportive institutional frameworks and future-oriented strategic processes, offering actionable insights for policymakers and public managers in emerging economies.