Artificial intelligence offers emerging markets an unprecedented opportunity to leapfrog traditional development barriers, but a new World Bank report highlights that success hinges on cultivating local AI ecosystems rather than merely importing AI models.
- Emerging markets must develop full AI ecosystems, not just deploy models.
- Investment needed in digital infrastructure, skills, and adaptable AI tools.
- Strategic collaboration essential to overcome market and competitive challenges.
What happened
The World Bank Group released a report stressing that artificial intelligence (AI) is transitioning into a general-purpose technology capable of reshaping productivity and economic growth worldwide. For countries like India, the report highlights that AI’s benefits will depend on more than just importing existing models; instead, countries need to develop sustainable, local AI ecosystems.
The report details that these ecosystems require a combination of strong digital infrastructure, skilled talent, adaptive AI building blocks, and collaborative networks among governments, businesses, and entrepreneurs. Additionally, vertical AI solutions tailored for specific sectors such as fintech and agritech are crucial for realizing AI's full potential in emerging economies.
Why it matters
Emerging markets face unique opportunities and challenges in AI adoption. While AI can help overcome longstanding issues in healthcare, education, and financial services by leveraging defined tasks and large datasets, the current development of AI remains concentrated in a handful of high-income economies. Without robust local ecosystems, emerging markets risk falling behind as global AI capabilities rapidly evolve.
Building comprehensive AI ecosystems facilitates short- to long-term economic gains, ranging from immediate productivity improvements to broader structural benefits such as job creation, enhanced skills, stronger institutions, and the development of new industries. These outcomes could transform economies by integrating AI more deeply and sustainably into their local context.
What to watch next
Stakeholders in India and other emerging markets should watch for government and private sector initiatives that focus on strengthening digital infrastructure, expanding AI education and research, and cultivating open-source AI tools to lower costs and increase adaptability. Early validation of product-market fit and local adaptation of AI applications will also be key areas of focus.
Collaborative efforts across policymakers, investors, AI developers, and communities will be critical to address challenges such as fragmented markets and the dominance of a few global AI players. Monitoring how these players engage with open AI platforms and contribute to local innovation ecosystems will provide insight into how AI can drive inclusive and sustainable growth in emerging markets.