Growing AI market to stir global economy

There is no doubt that artificial intelligence (AI) will significantly change the global economy in the near future due to the fast-growing competition among nations that tap its benefits. Advanced countries are well ahead in the competition thanks to their cutting-edge knowledge and technology, whereas developing nations are struggling to catch up. The net result is that there exist a wide gap between the two in regards to AI, which will leave a far-reaching impact on millions of people in the coming days. It is also likely that millions of jobs will vanish, creating severe social tension and chaos in the world. However, there is a big potential to explore diversified opportunities due to the proliferation of AI.

UN Trade and Development (UNCTAD) made these observations in its Technology and Innovation Report 2025, released in the first week of this month.  The theme of the latest report is Inclusive Artificial Intelligence for Development, which stresses strategic investments, inclusive governance, and global cooperation to ensure that the benefits of AI are shared equally by all rather than reinforcing current discriminations.

It is to be noted that AI is one of the key frontier technologies and is generally defined as the capability of a machine to engage in cognitive activities typically performed by the human brain. AI implementations focusing on narrow tasks are widely available and used, for example, in recommending online purchases, for virtual assistants in smartphones and for detecting spam or credit card fraud. New implementations of AI are based on machine learning and harness big data.

Again, frontier technologies are defined as new and rapidly developing technologies that take advantage of digitalisation and connectivity. These are emerging at the intersection of radical scientific breakthroughs and real-world implementation. UNCTAD report mentioned 16 more frontier technologies besides AI. These are the Internet of Things (IoT), Big data, Blockchain, 5G, Metaverse, 3D printing, Robotics, Drone technology, Solar photovoltaics (Solar PV), Concentrated solar power, Biofuels, Biogas and biomass, wind energy, Green hydrogen, electric vehicles, Nanotechnology, and Gene editing. These technologies are changing our lives, communication, innovation, creation, and business. Moreover, these are helping to address some of the most pressing global issues we face.

UNCTAD report mentioned that AI is expected to reach US$4.8 trillion in market value within a decade, by 2033, to be precise. At present, the share of AI in the leading frontier technologies market is only seven per cent, while the Internet of Things grabs 36 per cent. Due to rapid growth, by 2033 the share of AI may reach 29 per cent. The UN agency report, however, pointed out that access to AI infrastructure and expertise remains concentrated in a few economies. For instance, only 100 firms, mainly in the United States (US) and China, account for 40 per cent of global corporate research and development (R&D) spending. "Leading tech giants, such as Apple, Nvidia and Microsoft, each have a market value of around $3 trillion, rivalling the gross domestic product (GDP) of the whole African continent," it added. Thus, the report cautioned that market dominance, at both national and corporate levels, is likely to widen technological divides, leaving many developing nations at risk of missing out on the benefits of AI.

Another big risk the fast-growing AI market poses is the loss of jobs. UNCTAD report estimated that AI could impact 40 per cent of jobs worldwide as the 'benefits of AI-driven automation often favour capital over labour.' This may widen inequality and reduce the competitive advantage of low-cost labour in developing economies, cautioned the report. At the same time, the report expressed optimism that  AI is not just about replacing jobs; it can create new industries and empower workers. To use AI to enhance employment opportunities rather than eliminate those, the UN agency stressed investing in reskilling, upskilling and workforce adaptation. In this connection, it is critical to formulate effective AI policies in the countries, so they can focus on infrastructure, data and skills.

So far, most AI policies have been formulated by developed countries. The UNCTAD report showed that at the end of 2023, around two-thirds of developed countries had a national AI strategy, and only six of the 89 national AI strategies were from LDCs. Bangladesh and Sierra Leone took the lead in 2019 to formulate AI policies and were joined by four other LDCs in 2023.

Another critical aspect is global AI governance, which will play a significant role in determining the status of different nations in the world of AI. As AI regulation and ethical frameworks take shape, UNCTAD strongly recommends that developing nations join the initiative. This is crucial to ensure that AI serves global progress, not just the interests of a few. The report argues that stronger international cooperation is necessary to create a global AI framework prioritising equity, transparency, and shared benefits.

The analyses of the pros and cons of AI globally in the near future by UNCTAD will definitely serve as a valuable guideline for developing nations like Bangladesh. Though the country has taken a number of steps in digital transformation and is also trying to move ahead in terms of AI, a lot of work is needed in this connection. The Digital Bangladesh initiative, launched one and half decades ago, successfully pushed digital transformation in various sectors. The country's potential is also reflected in the frontier technologies readiness index, as revealed in the UNCTAD report.

In 2024, Bangladesh ranked 112th among 170 nations in the frontier technologies readiness index overall, jumping from 121st in the previous index. The index has five key components, and ranking in those areas can provide more details of readiness.

The country's position is significantly low in ICT and skills rankings, 140th and 132, respectively, reflecting the bad governance, flawed planning and wrong investments that drove the Digital Bangladesh initiative from its optimal paths to a large extent. The country's position is slightly better in industry and finance rankings, 108th and 90th, respectively. In the research and development (R&D) ranking, Bangladesh stood 61st, showing that the country has developed a research repository, although it is still unable to translate the research outcomes into action significantly. To put it another way, Bangladesh has developed a good research base to tap into the future AI market and contribute to the global AI policy-making discourse and governance. Now, a long-term realistic plan is required to continue the advancement in research and draw adequate investment from home and abroad.  Securing jobs is also critical for the country, as AI-driven displacement is unavoidable.

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