Is AI a catalyst for development?

Artificial intelligence (AI) has the potential to transform lives in developing countries, raising productivity and narrowing human capital gaps. It could help income levels catch up with those in developed countries. AI can be a useful tool for consumers and workers, making it easier to access and interpret information. Jobs may be lost, but new ones will be created. AI can also benefit public services, improving education and healthcare in developing economies. Policymakers and entrepreneurs worldwide are exploring ways to harness AI’s potential, tailoring it to local needs. The benefits of AI can spread quickly through smartphones, which are already prevalent in the emerging world. However, challenges such as connectivity and governance need to be addressed. Investments in AI diffusion can yield significant rewards for developing countries.
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The Economist argues that AI has the potential to revolutionise developing countries by transforming their economies and bridging the gap with developed nations. AI can increase productivity and narrow the disparities in human capital faster than previous transformative technologies. Rather than being passive recipients of AI, people in developing countries can actively shape it to suit their own needs, potentially leading to income levels catching up with those in wealthier nations.

The disruption caused by AI is expected to be smaller in emerging countries due to their fewer white-collar workers. The International Monetary Fund (IMF) estimates that only a fifth to a quarter of workers in developing countries are highly susceptible to job replacement, compared to a third in wealthier nations.

Furthermore, AI can bring transformative benefits to public services in developing economies. These countries have long struggled with a lack of educated and healthy workers. For instance, primary-school teachers in India have double the number of pupils compared to their American counterparts, hindering the quality of education they can provide. In Africa, there is a scarcity of doctors, and properly trained ones are even scarcer. As a result, many children grow up with inadequate education and poor health, limiting their potential in the global job market.

The Economist argues for a positive impact of AI on developing countries based on a few assumptions including that AI will disseminate faster than previous technologies and the use of mobile phones which are already prevalent in many developing countries.

The article argues for bottom-up AI, which would be built on local data and local needs. While it is critical for AI developments, it is not certain that it would work in practice as many developing countries lack basic digital infrastructure.

Several countries are already harnessing the potential of AI. China, with its technological expertise and support from internet giants, ranks second only to the United States in AI capabilities. India’s strong outsourcing industry may face disruptions as generative AI takes on back-office tasks. However, India also has a thriving startup scene, millions of tech developers, and a government that is enthusiastic about leveraging AI to enhance digital infrastructure. Countries in the Gulf, such as the United Arab Emirates and Saudi Arabia, are eager to build an AI industry as they shift away from oil-based economies, buoyed by significant capital reserves and a willingness to attract global talent.

The Economist’s article makes a strong claim on the positive impact of AI on developing countries without the necessary data and evidence. It also leaves open question why, for example, investing in education is not priority in order to get more teachers and doctors instead of using AI.

Source: The Economist