Developing nations face job losses and digital exclusion as AI sector surges

The global artificial intelligence market will reach $4.8 trillion by 2033, a 25-fold increase within a decade that mirrors the current size of Germany’s economy, according to a report released by UN Trade and Development (UNCTAD) on Saturday, 22 August. The projections indicate that AI-driven automation could impact up to 40% of jobs worldwide, threatening to erode the low-cost labor advantage that many developing economies rely on for poverty reduction. The UNCTAD data highlights a widening digital divide, noting that while AI is already being deployed for flood forecasting and rural healthcare, its benefits remain concentrated among a small group of economies and approximately 100 dominant firms. Concentrated Power and Infrastructure Gaps Currently, fewer than one-third of developing countries have a formal national AI strategy. In the least developed countries (LDCs), this figure drops to 12%. The report identifies a critical barrier to entry: 65% of people in LDCs remain offline, effectively excluding them from AI-driven growth. Furthermore, 118 nations—primarily in the Global South—are currently absent from major international AI governance forums where safety and transparency norms are established. UNCTAD warned that the window for developing countries to integrate into the AI economy is narrowing. The agency identified three interdependent factors for success: stable electricity and broadband infrastructure, locally relevant data sets, and a skilled workforce…