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

The World Bank has cautioned that developing countries have a limited timeframe to capitalize on the economic opportunities provided by artificial intelligence (AI). According to the World Bank's latest World Development Report, nations that do not act promptly risk exacerbating AI inequality, centralizing market dominance, and eroding faith in governmental institutions.

The organization draws parallels between the current rise of AI and previous transformative technologies like steam power and the internet, which revolutionized the global economy.

Gaurav Nayyar, co-author of the report, emphasized that this presents a "golden opportunity," but warned that without implementing the necessary policies, developing countries risk falling behind. While the cost of establishing AI infrastructure can be substantial, the report suggests that developing nations can leverage affordable tools tailored to their unique circumstances to enhance services such as healthcare, agriculture, and education.

Nayyar called for a pragmatic and strategic approach to AI adoption, rather than an overly optimistic one. He noted that the International Monetary Fund's previous research projected that AI could impact 60% of jobs in advanced economies and approximately 40% of all jobs globally. However, he emphasized that the conversation surrounding AI's impact on the job market in advanced economies typically focuses on potential job displacement, whereas the situation differs significantly for developing countries.

In developing nations, where a larger proportion of the workforce is involved in manual labor rather than cognitive tasks, the potential benefits from AI could be more pronounced, with productivity gains estimated at 16.2% compared to the 18.7% expected in advanced economies. The report outlined three key steps that developing economies should undertake: adopting existing AI tools, adapting them to suit local conditions, and progressing towards the development of frontier AI technologies.

As examples of successful AI integration, the report highlighted the United Arab Emirates (UAE) and Saudi Arabia, both of which have made strides in diversifying their economies through AI. The UAE, for instance, has developed the Falcon AI model, a large language model designed to be trained on vast amounts of data and text to improve user experience. Nayyar pointed out that models trained from scratch on local languages and dialects are currently outperforming other models in processing these languages.

Despite these promising developments, the World Bank cautioned that creating advanced AI models from the ground up may not be a realistic short-term goal for most developing countries. The organization suggests that if nations in sub-Saharan Africa and other regions begin implementing AI across their economies, they could achieve in a decade what would otherwise take a century. Nayyar emphasized that if developing countries take action now, they can establish the necessary foundations to reap the long-term benefits of AI.