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

By Paul Hannon

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.

Write to Paul Hannon at paul.hannon@wsj.com

(END) Dow Jones Newswires

August 04, 2026 09:14 ET (13:14 GMT)