Today, finding the right balance between automation and human interaction is a significant challenge for businesses. Starbucks, the largest specialty coffee shop in the United States and the world, offers a powerful case study in how strategic shifts can be applied to local government agencies to provide a more efficient and innovative digital infrastructure.
In recent years, Starbucks has invested heavily in automation, spending $450 million in 2022 alone. They have rolled out advanced Mastrena espresso machines, ordering systems driven by AI, and operational streamlining technology. The goal sounded great on paper: reduce labor, speed up service, and boost efficiency. But as the company cut back on staff, especially during high traffic periods, cracks began to show.
Customers noticed longer wait times and a more transactional, fast-food-type atmosphere. At the end of fiscal year 2024, survey scores dropped and sales declined by seven percent. This revealed that automation alone cannot deliver what customers expect from the “Third Place”. In 2025, the coffeehouse, under new CEO Brian Niccol, announced it would halt further automation rollouts and hire thousands of new baristas.
Automation can streamline operations, but overreliance can erode what people view as loyalty and trust. For example, Duolingo faced backlash when they announced an “AI-first” policy on social media. Human interaction, therefore, remains important, especially in customer-facing roles. The best strategies leverage technology in a way that enhances human capabilities rather than substitute them. Automation is used to handle repetitive and mundane tasks, allowing staff to focus on what only humans can do, which is build relationships and create positive experiences.
Similarly, local governments and public agencies would benefit from adopting this same system. The Department of Motor Vehicles (DMV), for example, can use automation to streamline form-filling and check-ins. For instance, under the current outdated method, people from across the nation need to take time off to drive to the DMV to receive the necessary forms to fill out, waiting hours in a line, whether they have an appointment or not. Using automation and technology, this process could instead use the city’s website with a chat assistant that helps them fill out any confusing or cumbersome sections of documents needed to renew a license.
In particular, chatbots can save municipalities up to 30 percent in costs, according to an IBM report. For more complicated issues, a staff member would be available to assist live. Further, while automation improves efficiency, maintaining human interaction is crucial for building public trust, as skepticism towards government agencies grows. Of course, these changes may raise privacy concerns but addressing them with honesty and transparency will help reassure the public and foster confidence in the new system. Local government agencies can also borrow the same processes and security measures that Global Entry uses in domestic airports.
Figure 1 Technology Adoption Lifecycle Curve. Photo credit
Like any new technology there are challenges with adapting to change. The adoption curve, coined by Everett Rogers, tells us individuals are generally skeptical and risk-averse with accepting shifts in how they live. It is not an overnight change, but rather adopted in stages, as seen in Figure 1. With careful coordination and planning, local governments will be able to make widespread automated systems available and accessible for all residents, despite any economic disparities.
The northern European country of Estonia shines a light to effective online government service integration. The country offers every citizen a personal, digital ID to connect to the 99 percent online network. This database, referred to as e-Estonia, allows individuals to cast their vote, shop, access healthcare, and conduct business (apart from marriage, divorce, and purchasing real estate) all online. This shift started back in the 2000s with the Tiger Leap Program, launched soon after Estonia gained independence from the Soviet Union. Facing limited resources, Estonia chose digital development as the fastest and most cost-effective way to catch up with the West.
This direct centralization has allowed for the country’s economic success, as the World Bank stresses their high quality of life and real labor productivity per hour worked. This was made possible thanks to declaring internet access as a social right and investing in widespread free Wi-Fi everywhere, including ‘dead zones’ like forests. Policymakers should not consider replicating exactly their programs as their geopolitical, demographic, and economic conditions differ from the U.S., but developing a streamlined system to simplify transactions and federal and state services, while balancing efficient use of resources and disaster recovery.
Data protection is, of course, an important issue that must be addressed. Cybersecurity appears to be regulated well under the KSI blockchain technology in Estonia. Any other potential threats, although cannot be prevented in totality, can be detected by implementing digital embassies that store a backup copy of its digital assets in another country, one that is an ally or a neutral mediator.
The recent strategic pivot among many companies to embrace new technology has created advantages and drawbacks. The effective implementation of automated systems and simultaneous human capital investment highlights that local governments can efficiently support skilled workers using modernized technology. Moving forward, cities can integrate digital platforms to consider flood risks, manage traffic, and optimize resource allocation.
Written by Daryoush Jamkhu, Public Policy Intern
The Alliance for Innovation and Infrastructure (Aii) is an independent, national research and educational organization working to advance innovation across industry and public policy. The only nationwide public policy think tank dedicated to infrastructure, Aii explores the intersection of economics, law, and public policy in the areas of climate, damage prevention, eminent domain, energy, infrastructure, innovation, technology, and transportation.