World Bank: AI offers lifeline for developing economies with fewer job risks than rich nations

AI offers 'lifeline' for emerging economies, World Bank says

LONDON, Aug 4 (Reuters) - Artificial intelligence could enable developing countries to gain a century's worth of development in a decade if they act quickly on power, connectivity and skills gaps, the World Bank said in a report on Tuesday. Widespread job losses due to AI are also less of a threat to emerging economies, the report found, adding that developing economies have more to gain and less to fear than richer nations. "AI has thrown developing economies a lifeline, and they ⁠should seize it," Indermit Gill, the World Bank's chief economist, said in a statement accompanying the report. Companies worldwide are spending billions to harness an anticipated AI revolution, while governments are scrambling to ensure their nations reap the benefits. For many companies and countries, the challenge will be to build power-hungry data centres and find the energy generation to support them. But Gill said emerging economies do not need vast resources or bespoke large language models to benefit. "By adapting small, low-cost AI tools to local conditions, they can bring better medical care, education, judicial services and agricultural extension within reach of millions," Gill said. Health workers may be able ⁠to use AI to speed diagnoses, teachers to improve lesson plans and farmers to determine what to plant and when. The International Monetary Fund has said that AI could boost Sub-Saharan Africa's economy by about 4% over the next decade under the right circumstances. FEWER JOBS AT RISK, BUT STAKES ARE HIGH Generative AI is three times more likely to threaten jobs ⁠in rich countries, where 14.2% are at risk, than in low- and middle-income countries, where 4.5% of jobs are exposed, the report found. The share of jobs expected to benefit from meaningful productivity gains is also similar: 16.2% in developing ⁠economies and 18.7% in high-income countries. The report said governments must improve electricity and internet access, boost digital skills and expand access to smartphones and computing devices. It warned, however, that AI could bring "greater income inequality, ⁠stealthier misinformation, and political repression." But the cost of missing out would be severe, according to the World Bank. "Today's developing economies missed the first Industrial Revolution and spent the next two centuries paying the price," Gill said. "They cannot afford to miss this one." Reporting by Libby George; Editing by Paul Simao Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * Artificial Intelligence Libby George Thomson Reuters Libby George is a London-based journalist on the Reuters emerging markets team. She was part of a team named as Pulitzer finalists in 2023, and who won the Selden Ring Award for International Investigative Reporting, for a series of stories revealing abuses by Nigeria's military. After launching her career as a political journalist in Washington, D.C., she joined Reuters in 2015 covering oil, and from 2019-2023, she was senior correspondent and acting bureau chief based in Lagos, Nigeria.

Developing countries have 'less to fear' from AI than rich nations

Developing economies stand to benefit more from AI boosting their workers' output in the years ahead than they will lose in jobs being replaced by the technology, the World Bank said. The biggest multilateral lender to middle-income and poorer nations said that "AI is more likely to lend their workers a hand than put them out of work", in a report on Tuesday that predicted that a wave of cheaper AI tools could revive flagging growth across the developing world. "As a rule, developing economies today have more to gain -- and less to fear -- from AI than richer ones . . . less than a tenth of their jobs are susceptible to AI automation, compared with more than a third in high-income economies," said Indermit Gill, the bank's chief economist. The bank's report sets a strikingly optimistic tone. Other experts have warned AI could leave many emerging economies even further behind rich countries, as fledgling middle-class knowledge workers will be replaced by bots and their governments will lose the race for data centres and chips. "When we started the report, we were actually a lot less optimistic . . . our view of things was really coloured by the debates in developed economies" on job losses, Gill said. But he added it soon became clear that AI was bringing efficiency gains such as more accurate medical imaging, faster clearance of court case backlogs and better weather forecasts in countries from India to Kenya, despite challenges such as less access to computing power and reliable electricity. While economy-wide gains in productivity from AI are still difficult to measure, "there is a huge upside for doing things that would otherwise have taken decades, maybe even a century" in terms of having enough skilled workers for these tasks, Gill said. Investor bets on these countries largely reflect a view that AI will favour a few high-tech emerging markets that benefit from chip demand, while hitting countries that supply cheap skilled labour for global services such as call centres. An index of India's big listed IT outsourcing companies has, for example, fallen 18 per cent this year, while Korea's chipmaker-dominated stock market has surged 51 per cent. The trend has reversed in the past month as investor doubts about the speed of the AI investment boom have increased, with the Indian gauge up 12 per cent while the Korean market has fallen by about a fifth. The World Bank's report said there was evidence that AI use had, meanwhile, been spreading rapidly across small businesses in emerging markets. On average, about a fifth of firms with more than five employees surveyed in India, Jordan, Kenya, Mexico, Nigeria and Thailand had recently used AI chatbots in operations, versus a third in the US, it said. The report warns that advanced countries are still set to see the biggest productivity gains based on their current higher rates of AI adoption, unless developing countries can catch up, such as by adapting models. In an optimistic scenario based on current adoption trends, AI will raise the average maximum long-run growth of developing nations from 4.1 per cent to 4.9 per cent this decade, the report said, but boost it from 1.2 per cent to 3.6 per cent for richer countries. The rise of so-called "small" models, which run on fewer parameters needing less memory, means that "AI can help solve important problems involving narrow tasks even when local computing power is limited, electricity is unreliable and internet service is dodgy", Gill argued. The bank warned that efforts by governments to spend big on "AI sovereignty", investing heavily in data centres and chip production in a race to develop the best AI models, could be a "development trap" given the risk they do not pay off. For smaller economies at every level of income, "it's really hard to close the gap with the US and China . . . adaptation has to be the mainstay", Gill said.

World Bank warns developing countries to embrace AI or be left behind

Washington (United States) (AFP) - The World Bank on Tuesday called on developing countries to embrace artificial intelligence technology tools to deliver better governance outcomes, warning that they risked being left behind if they failed to do so. "AI has thrown developing economies a lifeline, and they should seize it," Indermit Gill, chief economist of the World Bank Group, said as the organization launched its annual World Development Report. "They do not need large models or big data centers to reap its benefits," he added, advocating for the adaptation of lower-cost AI tools to local conditions to deliver results in the health, education, justice and agricultural sectors. Advanced AI models -- largely developed in the United States and China -- offer the ability to quickly analyze data and automate many tasks that otherwise take skilled humans longer to do. These AI models, however, require huge data centers and large amounts of complex computing power, using massive amounts of electricity and water -- with implications for climate change. "Developing economies today are in the midst of their weakest average growth performance in three decades," said a World Bank statement accompanying the report. "AI could significantly boost that performance before the end of the 2020s while delivering tangible benefits to people." The report calls for countries to use AI to "help extend otherwise costly medical, legal, educational, and agricultural services to underserved billions -- doing in a decade what might otherwise take a century." Shock after shock Lower-income countries have struggled through the 2020s, hit by a series of successive shocks that saw the World Bank earlier this year dub it a "lost decade" for their economic growth. The Bank has lowered its 2026 global growth forecast to its lowest level since the pandemic, with the economic fallout of the Iran war battering countries around the world. The shock has hit low-income and developing countries hardest, with Asia the worst-affected region. The Bank's new report advocates for developing countries to start working with localized AI tools and solutions now, and to invest in electricity generation and distribution; expand access to computing power; and improve the availability of local data. "The window to get this right is narrow," said Gaurav Nayyar, director of the report. "AI presents a once-in-a-lifetime opportunity to solve problems that have resisted solutions for generations," he added. For the 6.8 billion people -- 83 percent of humanity -- who live in low-income and developing countries, AI tools will need to be adapted to meet their needs. The report shares examples of AI applications in governance, such as to increase diabetes screening volumes in Bangladesh, or in reducing costs for Indian farmers through advanced weather forecasts. The solutions, the report stresses, will need to meet people where they are. "For example, AI solutions will need to be delivered through voice calls on basic mobile phones for those who cannot read or afford smartphones," it says. "Simply importing an AI model does not mean it will work well locally." Stark warning The report calls for policymakers to also build public trust as they expand AI use. "Improved public services and better learning outcomes in schools will reinforce trust -- but if AI embeds bias in government decisions or erodes data privacy, that trust will be difficult to recover," said the statement. The report delivers a stark warning, too: "AI could widen gaps between countries, increase inequality within them, concentrate market power, weaken trust in public institutions, and create new risks for safety, rights, and social cohesion." And while risks to employment in developing countries are low at the moment, it warns that in the long run AI tools could cut off economic mobility by eliminating many of the middle-class jobs that enable it. The report was written with the aid of several of the world's most advanced AI tools, including offerings from OpenAI, DeepSeek, Google and Anthropic, according to a disclosure.

AI offers 'lifeline' for emerging economies, World Bank says

Artificial intelligence can accelerate developing nations' progress by a century within ten years. Emerging economies face fewer job threats from AI compared to wealthier countries. These nations have more to gain and less to fear from the AI revolution. However, governments must address power, connectivity, and skills to seize this opportunity. Missing this technological shift carries severe economic consequences for developing economies. Artificial intelligence could enable developing countries to gain a century's worth of development in a decade if they act quickly on power, connectivity and skills gaps, the World Bank said in a report on Tuesday. Widespread job losses due to AI are also less of a threat to emerging economies, the report found, adding that developing economies have more to gain and less ⁠to fear ⁠than richer nations. "AI has thrown developing economies a lifeline, and they should seize it," Indermit Gill, the World Bank's chief economist, said in a statement accompanying the report. Companies worldwide are spending billions to harness an anticipated AI revolution, while governments are scrambling to ensure their nations reap the benefits. For many companies and countries, the challenge will be to build power-hungry data centres and find the energy generation to support them. But ⁠Gill said emerging economies do not need vast resources or bespoke large language models to benefit. "By adapting small, low-cost AI tools to local conditions, they can ⁠bring better medical care, education, judicial services and agricultural extension within reach of millions," Gill said. Health workers may be able to use AI to speed diagnoses, teachers to improve lesson plans and farmers to determine what to plant and when. The International Monetary Fund has said that AI could boost Sub-Saharan Africa's economy by about 4% over the next decade under the right circumstances. FEWER JOBS AT RISK, BUT STAKES ARE HIGH Generative AI is three times more likely to threaten jobs in rich countries, where 14.2% are at risk, than in low- and middle-income countries, where 4.5% of jobs are exposed, the report found. The share of jobs expected ⁠to benefit from meaningful productivity gains is also similar: 16.2% in developing economies and 18.7% in high-income countries. The report said governments must improve electricity and internet access, boost digital skills and expand access to smartphones and computing devices. It warned, however, that AI could bring "greater income inequality, stealthier misinformation, and political repression." But the cost of missing out would be severe, according to the World Bank. "Today's developing economies missed the first Industrial Revolution and spent the next two centuries paying the price," Gill said. "They cannot afford to miss this one."

Developing Economies Have More to Gain and Less to Lose From AI, Says World Bank

The use of relatively simple AI tools can help developing economies overcome a shortage of expert knowledge to boost economic growth, although they risk becoming dependent on the U.S. or China if they don't tread carefully, the World Bank said Tuesday. In what it billed as a "first comprehensive assessment" of the potential impact of AI on the lives of 6.8 billion people who live in developing economies, the bank concluded that many fewer jobs are vulnerable to AI-enabled automation than in rich countries, while many more can be made more productive. "As a rule, developing economies today have more to gain--and less to fear--from AI than richer ones," wrote Indermit Gill, the World Bank's chief economist. The race to develop frontier AI is transforming the U.S. economy as hundreds of billions of dollars are spent on building data centers. The World Bank said that is not a path that most developing economies can follow, but AI-driven tools can nonetheless have a transformative impact on their prospects by removing a long-standing obstacle to growth. "Many developing countries face shortages of highly skilled workers," the bank said. "AI can help by enabling less experienced workers to perform more advanced cognitive tasks, allowing some work to be shifted away from scarce specialists and making existing workers more productive." Some developing economies face the threat of big job losses as AI tools are deployed, particularly those that have relied on the outsourcing of business processes, such as call centers and back-office services. "AI could close off a promising route to middle-class employment in many developing economies, threatening call-center work and entry-level jobs in software, finance, and business services," Gill wrote. However, the World Bank calculates that while 14.2% of jobs in rich countries can be automated using generative AI, that is a threat faced by just 4.5% of jobs in developing economies, while many more can be made more productive. "Still agrarian and reliant on small enterprises, poorer economies are less likely to suffer large-scale job losses: AI is more likely to lend their workers a hand than put them out of work," the World Bank said. Many developing economies lack the infrastructure to support the kind of AI activity that is increasingly driving the U.S. economy, including the ability to generate the vast amounts of electricity needed to power data centers. But the bank said that many simple AI tools can be deployed with beneficial results even in apparently unpromising environments. "No need for massive investments in data centers or large language models," wrote Gill. "AI can help solve important problems involving narrow tasks even when local computing power is limited, electricity is unreliable, and internet service is dodgy." For now, rich countries stand to benefit most from the spread of AI. If AI adoption continues on its current trend, the bank calculates that the productivity benefits are set to be more than three times larger in rich economies than in their developing counterparts. But the bank said that gap can be closed. To do that, developing economies will need to expand access to computing power and improve the availability of local data, including in local languages. "AI needs to be customized to the local context because it learns from the data upon which it is trained," the bank said. The development of AI has so far been dominated by the U.S. and China. That leaves developing countries that embrace the new technology at risk of becoming overly reliant on either of the two economic giants. "The world's most advanced AI systems are controlled by a small number of companies, mainly in the United States and China," the bank said. "This means developing countries could become dependent on technology they do not control." That threat to economic independence could deter leaders from supporting the widespread deployment of AI at the risk of missing out on its economic benefits. But the World Bank sees ways of avoiding excessive dependence on one or the other of the two rivals without having to spend the large sums required to replicate the AI supply chain. "A more practical way to reduce dependence on a single country is to buy models, cloud services, and other AI tools from many countries--and make sure they can work together and be swapped out without requiring the entire system to be rebuilt," Gill wrote.