Artificial intelligence could accelerate growth in developing economies, World Bank says

10:41

By: Azzat Manal

Artificial intelligence could accelerate growth in developing economies, World Bank says

Artificial intelligence has the potential to become a major driver of economic growth in developing countries, according to the latest World Development Report released by the World Bank. The report suggests that AI could help emerging economies achieve technological and productivity gains within a decade that might otherwise take many decades to accomplish.

The World Bank highlights that AI is expected to improve productivity across a significant share of jobs in developing economies, with the impact approaching the levels projected for high-income countries. Rather than replacing large numbers of workers, the institution believes AI can strengthen human capabilities by helping people perform tasks more efficiently and access better digital tools.

The report emphasizes that developing countries do not necessarily need to build expensive large-scale AI models or massive data centers to benefit from the technology. Instead, governments and businesses can focus on adopting affordable AI applications tailored to local needs in sectors such as healthcare, education, agriculture, public administration, and justice. These practical solutions could improve public services while supporting economic inclusion and innovation.

To maximize the benefits of artificial intelligence, the World Bank recommends a gradual strategy based on three key steps: adopting existing AI technologies, adapting them to local conditions, and progressively developing more advanced capabilities as digital ecosystems mature. This approach is intended to reduce costs while enabling countries to build sustainable AI expertise over time.

The report also warns that the opportunities presented by AI come with significant challenges. Without effective governance, the technology could widen economic inequalities, increase market concentration, raise concerns about privacy and data protection, and reduce public trust in digital systems. The institution stresses that responsible AI policies, transparent regulations, and international cooperation will be essential to ensure that technological progress benefits society as a whole.

In addition, the World Bank underlines the importance of investing in digital infrastructure, high-performance computing resources, quality local datasets, and skilled human capital. Encouraging innovation, supporting startups, and creating clear regulatory frameworks are also identified as key priorities for countries seeking to unlock AI's full economic potential.

According to the report, the long-term success of artificial intelligence will depend not only on technological innovation but also on governments' ability to translate AI investments into measurable improvements in productivity, public services, and sustainable economic development.