AI Could Transform Developing Economies in Just 10 Years

COLOMBO (News 1st); Artificial intelligence could enable developing countries to achieve in a decade what might otherwise take a century, provided governments move quickly to address gaps in electricity, internet connectivity, skills development and institutional capacity, according to the World Bank Group's World Development Report 2026: The Promise of Artificial Intelligence.

The report, describes artificial intelligence as a major opportunity for developing economies at a time when many are experiencing their weakest average growth rates in three decades.

According to the findings, jobs in high-income countries are more than three times as likely to face automation risks from generative AI compared to those in low and middle-income economies. While 14.2 percent of existing jobs in high-income countries are considered vulnerable to automation, the figure stands at just 4.5 percent in developing economies.

At the same time, the report notes that 16.2 percent of jobs in developing countries could experience significant productivity gains through AI adoption, a figure approaching the 18.7 percent projected for high-income economies. Researchers emphasize that the greatest potential for developing nations lies not in replacing workers but in enhancing human capabilities and productivity.

World Bank Group Senior Vice President and Chief Economist Indermit Gill said artificial intelligence has effectively thrown developing economies a lifeline and urged governments to seize the opportunity.

He noted that countries do not require massive data centres or the world's largest AI models to benefit from the technology. Instead, locally adapted, low-cost AI solutions could significantly improve healthcare, education, legal services and agricultural support for millions of people.

The report highlights that AI is already helping governments, businesses and individuals solve complex problems, analyze information, improve forecasting and deliver services more efficiently. In countries where shortages of trained professionals, quality records and institutional capacity remain major challenges, AI is increasingly being viewed as a practical tool to bridge gaps and improve outcomes.

The study suggests that AI could help doctors improve diagnoses, assist farmers in making better crop-management decisions, increase business productivity and strengthen public-sector functions such as tax administration, disaster management, healthcare delivery, education and social welfare programmes.

However, the report warns that the opportunity is not guaranteed. Most advanced AI systems are currently being developed by a small number of countries and companies, while many developing nations continue to struggle with inadequate infrastructure, limited access to computing power, shortages of skilled workers and weak institutional frameworks.

Without targeted action, the report cautions that AI could widen economic inequalities between countries, increase disparities within societies, concentrate market power, undermine trust in public institutions and generate new risks relating to safety, privacy and social cohesion.

To maximize benefits, the World Bank recommends a three-stage strategy: adopting existing AI tools, adapting them to local conditions and eventually progressing towards the development of more advanced AI capabilities. The report argues that this approach is more practical and cost-effective than attempting to replicate frontier AI systems before fundamental conditions are in place.

World Development Report Director Gaurav Nayyar described the current moment as a rare opportunity, stating that AI offers developing countries a chance to solve longstanding challenges that have persisted for generations. He stressed that investments in electricity, digital connectivity, skills development and strong institutions are essential if countries are to fully benefit from the technology.

The report also notes the importance of improving access to reliable electricity and internet services. It notes that nearly one-third of rural schools in Sub-Saharan Africa still lack reliable power supplies, while more than two-thirds do not have dependable internet connectivity.

In addition, governments are urged to expand access to computing resources, improve the availability of local-language data and create environments that support innovation, private investment and technology adoption. The report calls for stronger evidence-based policymaking, improved AI skills and clearer evaluation frameworks to ensure successful implementation.

The World Bank further stresses that public trust will play a crucial role in determining the success of AI adoption.