Islamabad, Oct 22,2026: Artificial intelligence is emerging as a potential new driver of economic growth in developing countries, offering opportunities to improve workforce productivity, strengthen public services and overcome shortages of specialised skills, even as differences in digital infrastructure and technological readiness threaten to limit its benefits.
According to the World Bank’s World Development Report 2026, approximately 16.2% of jobs in developing economies could see meaningful productivity gains from AI, compared with 18.7% in high-income countries. This narrow gap suggests that the technology’s potential benefits extend well beyond advanced economies.
The report estimates that 4.5% of jobs in low- and middle-income countries face potential automation risks, compared with 14.2% in high-income economies. The findings highlight the different ways AI could affect labour markets, with productivity enhancement representing an important opportunity for developing countries.
The findings come as developing economies face a challenging growth outlook. UN Trade and Development projects their combined economic expansion at approximately 4% in 2026, down from 4.7% in 2025, while global growth is forecast at 2.6%. Separately, IMF estimates suggest AI could eventually increase annual global productivity growth by as much as 0.8 percentage points.
Prof Dr Muhammad Usman Ghani Khan, Director of the National Centre of Artificial Intelligence at UET Lahore, told Wealth Pakistan that the greatest opportunity for developing economies lay in using AI to enhance the productivity of existing workers rather than treating the technology primarily as a replacement for labour.
“For countries where capital and specialised expertise are limited, AI can help people perform tasks faster, make better decisions and access knowledge that previously required expensive professional support. That creates the possibility of productivity gains without waiting decades to build the same institutional capacity as advanced economies,” he said.
Khan said the potential benefits were particularly significant for countries facing shortages of skilled professionals, limited institutional resources and constraints on investment in modern technologies.
He identified agriculture, healthcare, education, manufacturing, financial services and public administration as sectors where AI applications could generate substantial productivity improvements if adapted to local languages, economic conditions and operational requirements.
In agriculture, AI-based advisory systems could help farmers access information and improve decision-making, while healthcare institutions could use the technology to support administrative processes and improve the delivery of services.
Similarly, educational institutions, manufacturers and financial service providers could benefit from AI applications designed to improve efficiency, strengthen analytical capabilities and reduce repetitive workloads.
Khan emphasised that the economic value of AI would depend on its practical integration into productive activities rather than the widespread availability of individual digital tools.
“Using a chatbot is not the same as achieving an economic productivity gain. The real transformation happens when AI becomes part of a factory process, hospital workflow, farm advisory system, financial operation or government service and measurably reduces time, cost or error,” he said.
The growing interest in AI-driven productivity comes as developing economies seek new sources of growth amid pressure on traditional economic drivers, including investment, exports and industrial expansion.
The World Bank’s findings suggest that AI could help countries improve the efficiency of existing workers and institutions, potentially allowing businesses to expand output and improve service delivery without proportionate increases in labour or capital requirements.
However, evidence indicates that the productivity effects of AI remain uneven across sectors, occupations and organisations.
An International Labour Organization (ILO) review found that AI applications yielded task-level productivity gains ranging from approximately 10% to 70% across select settings.
The review also noted that improvements in individual tasks had not consistently translated into higher productivity across entire firms or national economies, highlighting the importance of organisational readiness and effective implementation.
Experts believe this distinction is particularly important for developing countries, where limitations in digital infrastructure, workforce skills and institutional capacity could prevent businesses from fully benefiting from emerging technologies.
For Pakistan, the global expansion of AI presents opportunities to improve industrial productivity, strengthen public services and develop new technology-based economic activities.
The government has committed to investing $1 billion in artificial intelligence by 2030, including the development of sovereign computing infrastructure and research capabilities.
Its stated objectives also include training one million non-IT professionals in AI-related skills and providing 1,000 fully funded doctoral scholarships in artificial intelligence.
Seven AI hubs are being established under the National AI Advancement Initiative, with 20,000 training opportunities planned to support skills development and wider adoption of emerging technologies.
According to the government, the National Centre of Artificial Intelligence and its network of laboratories have already developed more than 220 AI products and designs across different sectors.
These initiatives reflect Pakistan’s efforts to strengthen its technological capabilities and create the foundations for wider AI adoption in economic and public-sector activities.
However, translating investment commitments and training programmes into measurable productivity improvements will require stronger links between research institutions, industry and public-sector organisations.
Khan said developing economies should focus on practical applications of artificial intelligence rather than immediately attempting to compete with advanced economies in developing the largest and most sophisticated AI models.
He argued that countries with limited financial and technological resources could achieve meaningful economic benefits by adapting available AI systems to local requirements and integrating them into existing industries.
“The advantage will come from solving local problems at scale. If developing countries can combine affordable AI with skilled people, reliable data and sector specific applications, productivity gains can spread far beyond the technology industry itself,” he said.
He emphasised that the greatest opportunities would emerge where AI applications addressed specific operational challenges, improved decision-making and helped businesses and institutions use their existing resources more efficiently.
For Pakistan, this could involve strengthening collaboration between universities, research centres and businesses to develop applications suited to domestic industrial and economic needs.
The availability of skilled professionals, reliable digital infrastructure and relevant data would also play an important role in determining how widely these technologies could be adopted.
At the international level, differences in access to electricity, internet connectivity, computing resources and advanced technical skills could influence how the economic benefits of AI are distributed.
Countries with stronger digital infrastructure and more developed innovation systems may be better positioned to adopt AI rapidly, while economies facing infrastructure and skills constraints could struggle to achieve comparable results.
This raises the possibility that AI could widen existing productivity differences between advanced and developing economies if technological adoption remains concentrated in countries with greater resources.
Nevertheless, the World Bank’s estimates indicate that developing economies have substantial opportunities to benefit from AI applications, particularly where the technology complements existing workers and improves the efficiency of economic activities.
For Pakistan and other developing countries, experts believe the priority should be to convert growing access to AI into practical improvements in manufacturing, agriculture, services and public administration.
The long-term economic benefits will depend not simply on the availability of artificial intelligence tools but on how effectively countries invest in human capital, strengthen digital infrastructure and integrate technology into productive activity.
