Maximizing AI Potential for Economic Growth in Developing Countries: Balancing Innovation and Protection

Artificial Intelligence (AI) has become a crucial catalyst in driving innovation and economic growth globally, and for developing countries,


Artificial Intelligence (AI) has become a crucial catalyst in driving innovation and economic growth globally, and for developing countries, AI offers significant opportunities for accelerated development. This technology can transform various sectors, such as healthcare, education, and agriculture, into more efficient and effective systems. For example, AI improves efficiency and productivity in agriculture through weather analysis and pest detection, and aids in faster and more accurate disease diagnosis in healthcare. In education, AI promises more adaptive and personalized learning systems, while in the public sector, AI can enhance the efficiency of services like traffic management and financial services.

However, the adoption of AI in developing countries also presents unique challenges, including issues related to data privacy and security, digital divide that could widen inequality, limitations in human resources and infrastructure, dependence on external technology, as well as ethical and responsibility concerns. Considering these opportunities and challenges, it is crucial for developing countries to develop a comprehensive strategy for adopting AI, including strong policies for data protection, investments in education and training, infrastructure enhancement, and the development of a local innovation ecosystem that meets the specific needs and conditions of the area. With this approach, AI can be an effective tool for development and economic growth in developing countries, ensuring fair and inclusive benefits for all layers of society.

Comprehensive Policy Development

The development of comprehensive policies is a key step in regulating the use of Artificial Intelligence (AI) in developing countries. These policies should include clear regulations on AI usage, covering data privacy protection and ethical use of AI, while ensuring that innovation continues without compromising individual rights.

For example, India has taken significant steps in developing a comprehensive AI policy. The Indian government launched the “National Strategy for Artificial Intelligence,” aimed at promoting the application of AI in a responsible and ethical manner. This strategy includes developing AI capacity, research and development, and the application of AI in key sectors such as healthcare, education, agriculture, and transportation. India has also emphasized the development of secure data infrastructure to support AI innovations.

Additionally, the Indian government has recognized the importance of data privacy protection. This is reflected in the proposed strict personal data protection legislation, akin to the General Data Protection Regulation (GDPR) in the European Union. This proposal includes provisions on user consent, limitations on cross-border data transfer, and individual rights to access and control their personal data.

These steps demonstrate India’s effort in creating an AI ecosystem that not only promotes innovation and economic growth but also ensures the safety and privacy of its citizens. This serves as an example for other developing countries in developing policies that balance technological innovation with community protection.

Investment in Education and Human Resources

Training In the context of developing countries, enhancing the capacity of human resources (HR) in the field of AI is a crucial step to face the challenges of the digital era. Developing countries, like Indonesia, have shown significant initiatives in this regard. The Indonesian government, for instance, has taken strategic steps by establishing the Artificial Intelligence Research and Innovation Committee (Korika) in 2020. The goal is to coordinate research and innovation in AI at the national level, marking a serious commitment to adopting AI technology.

Digital and AI education has become an integral part of the education system in Indonesia, reflecting the government’s efforts in developing HR capable of competing in the global era. Cooperation with global and local technology companies has been conducted to expand access to learning resources, teacher training, and digital learning platforms. These efforts are not only aimed at the younger generation but also include vocational training for existing workers, honing their skills in modern technology.

Indonesia has also shown its seriousness in the AI era by granting a ‘golden visa’ to Sam Altman, a prominent figure in the world of technology and AI. This move reaffirms Indonesia’s position in attracting global investment and talent in the AI field. This reflects the efforts of developing countries in preparing their HR for the digital economy and shows their commitment to being key players on the global stage, especially in innovation and economic growth driven by AI.

Adequate Technology Infrastructure

The development of a robust technology infrastructure is a fundamental foundation in the application of Artificial Intelligence (AI). This infrastructure includes improving internet networks, developing data centers, and developing cloud computing platforms. Fast and stable internet connectivity is essential to support AI operations, especially in machine learning processes and data analytics. Without reliable data access, AI’s ability to process large amounts of information will be hindered, reducing its effectiveness.

Data centers play a key role in providing large storage and data processing capacity, necessary for large-scale data analysis by AI. Meanwhile, cloud computing provides flexibility and scalability of computing resources, which is important for start-ups and local innovators in developing AI solutions without investing heavily in physical IT infrastructure.

Adequate technology infrastructure is also important in attracting foreign investment. Investors tend to invest capital in countries with mature and reliable technology infrastructure. Therefore, the development of a robust technology infrastructure not only supports local innovation but also attracts foreign investment, which in turn will accelerate economic growth and technological advancement in developing countries.

Multi-Sector Collaboration

Collaboration between the government, industry, academia, and civil society is crucial in developing Artificial Intelligence (AI) in developing countries. The government plays a key role in setting regulations and policies that support AI innovation, ensuring that the development of this technology aligns with local needs and conditions. On the other hand, the industry brings practical experience and financial resources, essential for implementing effective and sustainable AI solutions.

Academicians play an important role in AI research and development, directing their research to solve real societal problems. Collaboration with academics helps improve the quality and relevance of AI research, ensuring that research findings can be practically applied. Additionally, civil society, including NGOs and community organizations, provide perspectives on the social impact of AI, helping ensure that AI development is ethical and responsible.

This collaboration enables developing countries to create a strong and inclusive AI innovation ecosystem, where technology is not only seen as a tool but also as a means to solve local problems and improve the quality of life. Synergy between these sectors is crucial to ensure that AI development is not only technologically advanced but also brings equitable benefits to all layers of society.

Encouraging Local Startup Development

Incubation and funding programs for local startups play a significant role in advancing the application of Artificial Intelligence (AI) in developing countries. Through these programs, local startups can develop innovative AI solutions that not only solve specific local problems but also open up new market opportunities. These solutions can range from AI applications for smart agriculture, helping farmers increase crop yields, to the development of digital healthcare systems that provide more accurate and efficient diagnoses and treatments.

These new market opportunities also create jobs in various sectors. For example, in the technology sector, there will be a need for AI developers, data analysts, and cybersecurity specialists. Outside the technology sector, AI also creates demand for professions such as technicians for the maintenance and operation of AI systems, as well as roles in project management and business development related to AI applications. Additionally, AI can help create more efficient jobs in other sectors, such as healthcare, education, and financial services, by automating routine tasks and allowing professionals in these fields to focus on more strategic and analytical aspects of their work.

Utilizing AI for Sustainable Development

Sustainable development has become a key aspect for developing countries, given the importance of achieving economic and social progress balanced with environmental conservation and social justice. In the current global context, the concepts of Environmental, Social, and Governance (ESG) and the target of net zero carbon have become major trends. The use of AI in supporting these goals plays a crucial role in helping developing countries overcome various environmental and social challenges.

AI not only supports economic growth but also ensures that this growth is inclusive, equitable, and sustainable. For example, in the context of ESG, AI can be used to optimize resource use, reduce waste, and manage the environmental impact of industries. This is highly relevant to the net zero carbon target, where AI can assist in carbon emission management and the development of environmentally friendly technologies.

Additionally, AI also supports social dimensions and good governance, such as in developing healthcare solutions accessible to various layers of society, or in implementing more transparent and accountable corporate governance practices. With this, AI becomes a crucial tool that helps developing countries not only in tackling their economic and social challenges more efficiently and effectively but also in ensuring that their progress aligns with the principles of sustainable development and current global trends such as ESG and net zero carbon targets.


AI offers tremendous potential for developing countries to accelerate economic growth and development. However, to maximize its benefits, a balanced strategy is needed between promoting innovation and protecting the community. Through comprehensive policies, investment in education, infrastructure development, multi-sector collaboration, and support for local innovations, developing countries can create an ecosystem conducive to sustainable economic growth based on AI, while ensuring that the community is protected and actively participates in this digital era.

Tuhu Nugraha
Tuhu Nugraha
Digital Business & Metaverse Expert Principal of Indonesia Applied Economy & Regulatory Network (IADERN)