Developing countries have an opportunity to compress what once took a century of economic progress into just 10 years by embracing artificial intelligence (AI), according to a new report by the World Bank Group. However, the global lender warns that realizing this ambition will depend on how quickly governments address critical infrastructure, digital access, and skills gaps.
The World Bank made this known in its World Development Report 2026: The Promise of Artificial Intelligence, released on Tuesday. The report highlights AI as a transformative technology capable of improving productivity, strengthening public services, and driving economic growth across low- and middle-income countries.
According to the report, AI has the potential to boost productivity in 16.2 percent of jobs in developing economies, a figure that comes close to the 18.7 percent projected for high-income countries. While advanced economies are expected to benefit significantly from AI, they also face a much greater risk of job automation.
The report notes that only 4.5 percent of jobs in low- and middle-income countries are at risk of automation by generative AI, compared with 14.2 percent in high-income economies. This suggests that AI is more likely to complement workers in developing nations rather than replace them.
World Bank Chief Economist, Indermit Gill, said developing countries do not necessarily need expensive AI infrastructure such as massive data centres or large language models to harness the technology's benefits. Instead, he explained that adapting affordable AI solutions could transform essential sectors including healthcare, education, agriculture, and the justice system.
He emphasized the urgency of taking action, stating:
“AI is spreading faster and is more context-specific than earlier general-purpose technologies like electricity and the internet.”
The report further explains that AI is already helping governments, businesses, and individuals solve complex problems, process information more efficiently, improve forecasting, and deliver services more effectively. These advantages are particularly valuable in countries where shortages of skilled professionals, weak record-keeping systems, and limited institutional capacity have long constrained development.
Among the practical applications identified by the World Bank are AI-powered tools that assist farmers in making better crop decisions, improve medical diagnosis, enhance business productivity, strengthen tax administration, support social welfare programmes, improve disaster response, and expand access to quality healthcare and education.
The report comes at a time when many developing economies are experiencing their weakest average growth rates in three decades. Against this backdrop, the World Bank believes AI could significantly lift economic performance before the end of the decade if countries move decisively to adopt the technology.
Despite the optimism, the institution cautions that the opportunity is far from guaranteed. It notes that most advanced AI systems are currently being developed by a small number of countries and technology companies, while many developing nations continue to struggle with unreliable electricity, poor internet connectivity, limited computing capacity, inadequate data resources, shortages of digital skills, and weak institutions.
Director of the World Development Report 2026, Gaurav Nayyar, stressed the importance of laying the right foundation for long-term success.
“Developing countries that build the foundations now—power, connectivity, skills, and institutions—will be positioned to adopt and adapt AI for their people.”
The World Bank also highlighted its ongoing collaboration with development partners to expand electricity access for millions of people across Africa. It urged governments to increase investment in computing infrastructure and improve the availability of locally relevant data, including information in indigenous languages, to ensure AI technologies better reflect local realities and serve citizens more effectively.
Beyond infrastructure, the report stresses the importance of creating an environment that encourages innovation and entrepreneurship. It argues that governments should support emerging technology companies by making it easier to attract investment, experiment with new ideas, and expand successful AI solutions.
Offering practical guidance to policymakers, the report concludes:
“Many AI pilots are already underway, but the bigger challenge is knowing which ones deliver results. Governments should make it easier for new firms to attract investment, test ideas, and scale what works.”
The World Bank maintains that with the right policies, investments, and institutions, artificial intelligence can become a powerful tool for inclusive growth, helping developing economies improve public services, raise productivity, and accelerate economic transformation over the coming decade.