Strategic intervention is needed to avoid developing nations falling into an artificial intelligence (AI) poverty trap.
A research paper, produced in New Zealand, argues while AI offers huge promise for developing nations, without targeted policies and international support, it could deepen poverty and inequality instead of driving growth.
Associate Professor Asha Sundaram, an economist from the University of Auckland said developing countries lacked the necessary infrastructure and skilled labour force to capitalise on AI’s potential.
“The downside is that there isn’t a lot of capacity in some countries in terms of digital infrastructure, internet, mobile phone penetration,” Dr Sundaram said.
“Much of the technology is controlled by firms like Google and OpenAI, raising the risk of over-reliance on foreign tech, potentially stifling local innovation.”
Associate Professor Dennis Wesselbaum, from the University of Otago said without strategic interventions, AI may create an AI-poverty trap and lock developing nations into technological dependence and widening the gap between global economies.
“For developing countries, AI could be a game-changer; boosting productivity, expanding access to essential services, and fostering local innovation – if the right infrastructure and skills are in place,” Dr Wesselbaum said.
He said financial support from developed countries and international bodies like the UN could help cover upfront costs through grants, loans and investment incentives.
Dr Sundaram said in developing AI policies, the international community must learn from the successes and failures of foreign aid.
“Aid has often failed to spur lasting growth in developing countries, partly because it can create dependency, reducing self-reliance and domestic initiatives.”
Read the full paper: Economic development reloaded: the AI revolution in developing nations.
