"AI Is a Blessing for Workers in Developing Countries," World Bank Says... "The Biggest Winners Will Be Advanced Economies"

[Financial News]  

Artificial intelligence (AI) is expected to deliver greater benefits to developing economies than job losses, the World Bank (WB) said on the 4th local time.
While workers in advanced economies fear being replaced by AI, developing countries may instead see stronger job security as AI boosts labor productivity.

According to the Financial Times (FT), the WB said in a report released that day that in developing countries, "AI is more likely to help workers than push them out of the workplace." It added that growth across developing economies could be revived by low-cost AI tools.
WB Chief Economist Indermit Gill said, "In principle, developing countries today have less to fear from AI and more to gain than richer nations," adding, "Less than 10% of their jobs are vulnerable to AI automation." He also noted, "By contrast, more than one-third of jobs in high-income economies are vulnerable to AI automation."
The WB report, which supports economic growth financing for developing countries, was unusually optimistic. It stood in sharp contrast to the pessimistic views of many experts who say AI will widen the economic gap between advanced and developing economies. Most experts expect middle-class knowledge workers in developing countries to be replaced by AI, while those countries lose out in the race for data centers and semiconductors because of limited funding.

Gill said that in terms of job losses, "We were much less optimistic when we first started preparing the report," adding, "Our own perspective was also influenced by the debate in advanced economies."
He said that pessimism has eased quickly and that he has become convinced AI will contribute to the economy by improving efficiency. He pointed out that AI can improve the accuracy of medical imaging in developing countries, speed up the resolution of court delays, and enable more accurate weather forecasts from India to Kenya. Those gains more than offset the drawbacks of limited access to computing resources and unstable power supplies.
Gill said it is still difficult to measure the economy-wide productivity gains AI will bring, but it is clearly positive that AI can quickly tackle tasks that developing-country experts would have taken "decades, perhaps a century" to solve.

The WB said advanced economies will be the biggest beneficiaries of the AI boom, but developing countries will also share in the gains.
About 20% of surveyed firms in developing countries, including India, Jordan, the Republic of Kenya, Mexico, Nigeria and Thailand, said they are using AI. In the United States, the figure is above 30%.
That is why advanced economies are expected to be the biggest winners from the AI boom.
Still, in an optimistic scenario that takes current AI adoption trends into account, developing countries are expected to raise economic growth to 4.9% by 2030, up from 4.1%, thanks to AI.
Advanced economies, the biggest beneficiaries of AI, are projected to see growth rise sharply from 1.2% to 3.6%.
Gill noted that developing countries with limited computing resources can use AI through so-called "small" models, which have fewer variables and therefore require less memory. Unlike "large" models, which can solve massive problems, small models can still handle more localized tasks.
Meanwhile, the WB warned that massive investments by advanced economies in expanding large-scale data centers and semiconductor production in pursuit of "AI sovereignty" could trap them in a "development trap" if the returns do not materialize.


[email protected] Song Kyung-jae Reporter