AI offer lifeline to developing economies in an era of weak growth – World Bank

Artificial intelligence (AI) holds the potential to revolutionize developing economies, offering a lifeline to propel them forward within a decade, according to the World Bank Group's World Development Report 2026. The report reveals that AI could boost productivity for up to 16.2% of jobs in developing economies, compared to 14.2% in high-income nations where 4.5% of jobs face automation risk from generative AI. While AI is not a replacement for workers, it can significantly enhance their capabilities.

Gill, Senior Vice President and Chief Economist at the World Bank Group, emphasizes that developing countries should swiftly capitalize on this opportunity. The key to unlocking AI's potential lies in addressing gaps in power, connectivity, skills, and institutional quality. By adopting low-cost AI tools tailored to local conditions, countries can improve medical care, education, judicial services, and agricultural extension for millions.

However, AI's rapid spread necessitates urgent action. Developing economies currently lag behind in growth, experiencing their weakest performance in decades. Without deliberate measures, AI could exacerbate inequality, concentrate market power, undermine trust in institutions, and introduce new safety and rights risks. The World Bank Group advocates for a three-step approach: adopt available AI tools, adapt them to local needs, and progressively advance toward frontier AI development.

To realize this potential, developing countries must first invest in essential infrastructure. In Sub-Saharan Africa, nearly one-third of rural schools lack reliable electricity, and over two-thirds suffer from inadequate internet connectivity. The World Bank Group is collaborating with partners to provide energy access to 300 million people across the region by 2030, forming a foundation for broader digital and AI inclusion.

Governments should also facilitate investment in new firms, facilitate testing ideas, and streamline the scaling of successful initiatives.

The challenge now is to identify AI pilots that yield positive results, necessitating stronger evidence, enhanced skills, and clearer evaluation frameworks. Building public trust in AI is equally vital. As AI rapidly evolves, governments should initially adhere to voluntary industry standards, backed by international cooperation to prevent regulatory fragmentation.

If voluntary measures prove insufficient, governments should enforce existing laws to mitigate any potential harms. By prioritizing improved public services and enhanced learning outcomes in schools, AI can augment trust, while avoiding biases in government decisions or privacy infringements that could erode that trust.