Developing economies could achieve in ten years what once took a century, according to a new World Bank report. However, this depends on governments acting quickly to fix gaps in power, internet access, skills, and institutions.

The World Bank Group released its World Development Report 2026 on Tuesday. The report focuses on artificial intelligence and its impact on the developing world. It warns that time is limited, and delay could cost these nations a rare opportunity.

Lower Job Risk, Higher Productivity Gains

According to the findings, high-income countries face a much greater risk of job losses from generative AI. Around 14.2% of jobs in wealthy nations could be automated. In contrast, only 4.5% of jobs in low- and middle-income countries face similar risk. This gap works in favor of poorer economies.

At the same time, AI could meaningfully boost productivity in developing economies. The report estimates that 16.2% of jobs there could see real gains. That figure is close to the 18.7% expected in high-income countries. As a result, the biggest promise for developing economies lies in enhancing workers, not replacing them.

‘A Lifeline They Should Seize’

Indermit Gill, Senior Vice President and Chief Economist of the World Bank Group, commented on the findings. He said AI has thrown developing economies a lifeline, and they should seize it. Furthermore, he noted that these nations do not need massive models or expensive data centers to benefit. Instead, small and low-cost AI tools, adapted to local needs, can improve medical care, education, judicial services, and farming for millions of people. Still, he cautioned that countries must move fast, since AI spreads faster than earlier technologies like electricity and the internet.

AI Already at Work in Health, Farming, Governance

This marks the first full assessment of AI’s impact on developing economies from the World Bank. The report shows that AI is already helping people, businesses, and governments in these regions. It is being used to solve problems, analyze data, improve forecasts, and expand services. These tools matter most where skilled professionals, reliable records, and public capacity remain limited. For instance, AI can help doctors diagnose illness, help farmers make better crop decisions, and help businesses run more efficiently. Meanwhile, governments could use AI to strengthen tax collection, social programs, disaster response, health care, and education.

Weakest Growth in Three Decades

Currently, developing economies are experiencing their weakest average growth in thirty years. Therefore, AI could offer a meaningful boost before the decade ends, the report suggests. Even so, this outcome is not guaranteed. A small number of countries and companies currently control the most advanced AI systems. Meanwhile, many developing economies still lack the power, connectivity, data, skills, and institutions needed to use AI effectively. Without action, the report warns, AI could deepen global inequality, concentrate market power, weaken public trust, and create fresh risks to safety and social stability.

A Three-Step Path Forward

To address this, the report lays out a three-step path for nations to follow. First, countries should adopt existing AI tools. Next, they should adapt these tools to local conditions. Finally, over time, they should work toward building their own frontier AI capabilities. This step-by-step approach can help nations avoid wasting resources trying to replicate advanced AI systems too soon.

Gaurav Nayyar, Director of the World Development Report 2026, echoed this urgency. He said the window to act correctly is narrow. He added that AI presents a rare opportunity to solve long-standing problems. In his view, nations that build strong foundations now, in power, connectivity, skills, and institutions, will be best placed to adopt and adapt AI for their people.

Power and Internet Gaps Remain a Barrier

However, none of this progress is possible without basic infrastructure first. In Sub-Saharan Africa, for example, nearly a third of rural schools still lack reliable electricity. Additionally, more than two-thirds lack dependable internet access. To close this gap, the World Bank Group is already working with partners through Mission 300. That initiative aims to bring energy access to 300 million people across Sub-Saharan Africa by 2030. As a result, it lays the groundwork for wider digital and AI inclusion.

Beyond infrastructure, countries also need greater computing power and better access to local data, including content in local languages. This would allow AI tools to be tailored more effectively to local populations and economies. In addition, governments should make it easier for new firms to secure funding, test new ideas, and expand successful projects. While many AI pilot programs are already running, the bigger challenge lies in identifying which ones actually work. For that reason, better evidence, stronger skills, and clearer procurement and evaluation systems will be essential going forward.

Building Public Trust

Finally, building public trust remains just as important as building infrastructure. As AI technology evolves quickly, the report recommends that governments start with voluntary industry standards to guide responsible use. These standards should be supported by international cooperation to avoid conflicting regulations across borders. When voluntary steps are not enough, governments should apply existing laws to address harm directly. Improved public services and better outcomes in schools can help build that trust further. On the other hand, if AI introduces bias into government decisions or damages data privacy, restoring public confidence could prove difficult.

In summary, the report positions developing economies as key beneficiaries of this technological shift, provided the right groundwork is laid in time.

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