AI impacts on developing nations gauged

While developing economies face lower job displacement risks from artificial intelligence compared with developed nations, gaps in infrastructure development, institutional capacity and relevant skill sets largely restrict their access to the benefits that AI has to offer, said a recent World Bank report.

According to the World Development Report 2026, which was released on Tuesday, only 4.5 percent of existing jobs in low- and middle-income countries are at risk of automation by generative AI, compared with 14.2 percent in high-income countries.

At the same time, AI could meaningfully boost productivity in 16.2 percent of jobs in developing nations, which is not far below the estimated 18.7 percent for high-income countries.

While the labor market in developing economies is less concentrated in occupations that are most exposed to generative AI, the figures suggest that workers and businesses could still use the technology to improve performance.

The World Bank described the report as "the first comprehensive assessment" of the implications of AI for developing economies, offering a perspective that has often been overlooked in academic and policy discussions focused largely on developed nations.

"AI has thrown developing economies a lifeline, and they should seize it," said Indermit Gill, senior vice-president and chief economist at the World Bank Group in a news release.

Weakest average growth

Developing economies are currently experiencing their weakest average growth performance in three decades, the World Bank said, adding that AI could be particularly valuable in cases where shortages of skilled manpower and institutional capacity have hindered development.

According to the report, AI tools can help doctors diagnose illnesses, support teachers in adapting teaching methods, guide farmers in making planting decisions, provide advice to small businesses, and enable banks to assess borrowers without conventional credit histories.

Governments could use AI to improve tax collection, social programs, healthcare services, education curriculums and disaster response, thereby extending limited public-sector capacity across larger populations, the report also said.

Gill noted that developing economies do not require large AI models or big data centers to reap the benefits of the technology. "By adapting small, low-cost AI tools to local conditions, they can bring better medical care, education, judicial services and agricultural extension within the reach of millions," he said.

The World Bank cautioned that "such optimism should not be unbridled", indicating countries that could benefit most from AI are often the least prepared to embrace the technology.

Harnessing the power of AI calls for a dependable foundation involving a stable electricity supply, affordable high-speed internet, capable institutions and skilled workers, but many developing economies have yet to achieve universal access even to electricity and the internet, it said.

The report shows that developing economies account for just 5 percent of high-performance computing capacity and 12 percent of secure internet servers. In sub-Saharan Africa, for example, almost one-third of rural schools still lack a stable electricity supply, and more than two-thirds lack dependable internet connections.

While AI could significantly boost performance globally before the end of the decade, the opportunity is not guaranteed for all, the World Bank said. It added that the most advanced AI systems are being developed by a small number of countries and companies, while many developing economies still lack the basic infrastructure needed to effectively use AI.

Although adopting existing generative AI tools is less expensive, imported systems may perform poorly when applied to languages, cultures and public services inadequately represented in their training data. For example, more than 2,000 languages spoken in Africa are neglected in major language models, according to the report's concept note.

Another concern, the report said, is that governments that lack the expertise or data needed to embrace these systems could become dependent on a small number of AI solution vendors, and those dominant vendors could shape standards and regulatory frameworks in those countries.

Three-step strategy

The World Bank called on developing economies to follow a three-step strategy — adopting available AI tools, adapting them to local conditions and advancing toward frontier development over time.

This approach would allow governments to initially focus on practical, lower-cost applications, rather than making expensive attempts to reproduce the most advanced models before basic foundations are in place, it said.

Gaurav Nayyar, director of the World Development Report 2026, warned that the window to get it right is narrow. "Developing countries that build the foundations now — power, connectivity, skills and institutions — will be positioned to adopt and adapt AI for their people," he said.