Developing economies face unique challenges that often hinder technological and economic progress. One of the biggest challenges is the high proportion of young people entering the job market each year, who are often hindered by an inadequate education system. This system fails to provide the skills needed to effectively participate in the modern economy, creating a paradox where labor is abundant but high-quality, competitive jobs that require high skills remain limited.
On the other hand, most developing countries rely heavily on labor-intensive industries such as manufacturing and agriculture, which employ a large number of people. These industries often use cheap labor as their competitive advantage in the global economy. However, the widespread introduction of AI can threaten this economic model by automating jobs that previously required human labor, potentially triggering mass unemployment if not managed wisely. Therefore, development policies must integrate new technology in a way that enhances the capacity of these sectors without significantly reducing the number of jobs.
In this context, developing countries must strive to provide incentives for the development of AI in sectors that can offer solutions to their problems without replacing many existing jobs. This is especially important given that developing countries do not have strong and stable economies like developed countries, which tend to have an aging population and can bear a greater risk of automation. Developing countries should focus on utilizing AI in ways that enhance efficiency and productivity in existing sectors while creating new job opportunities in the process, ensuring that technology transition supports economic growth and social development.
Enhancing Agricultural Efficiency
Farmers in developing countries face various challenges that hinder agricultural productivity and food security. One contributing factor is the relatively small average size of farmland, about 1.56 hectares per farmer, compared to an average of 42.2 hectares per farmer in developed countries, according to World Bank data in 2020. This limitation complicates efforts to improve efficiency and production scale.
Limited access to resources such as water, fertile land, and fertilizers, as well as inadequate infrastructure such as roads and storage facilities, add to the complexity of the problem. These challenges are exacerbated by the impact of climate change, which causes droughts, floods, and other weather disruptions that often damage crops.
Artificial intelligence (AI) offers potential solutions to some of these challenges. AI technology can be used to optimize the use of limited resources, through smart irrigation systems that can adjust water usage based on the needs of plants determined by moisture sensors and weather forecasts. AI can also help in the early detection of pests and diseases, allowing for more precise and measured intervention, thus reducing crop damage and excessive use of pesticides. Using big data from various sources, AI can provide specific recommendations for each plot of land, such as the optimal planting time, the most suitable type of crops, and effective cultivation techniques.
Further, AI can help farmers in developing countries to compete globally and obtain better prices for their products through digital platforms that provide access to wider markets and real-time price information. This system not only enhances transparency in the supply chain but also helps farmers make more informed decisions about when and where to sell their products. With strategic utilization of AI, farmers in developing countries can enhance the productivity and sustainability of their operations despite the limited scale of land and other external challenges.
Improving Access to Healthcare
AI in the healthcare sector offers tremendous transformative potential, especially in supporting disease diagnosis, providing medical advice, and monitoring patients remotely. Platforms like Alodokter in Indonesia illustrate how AI can enhance access and efficiency of healthcare services, particularly in rural and remote areas where medical services are often limited. Given these benefits, governments in developing countries must formulate policies that support the development of telemedicine and AI-based diagnostic tools, as well as implement strong regulations to ensure the quality of care and patient privacy.
With the increasing prevalence of smartphone use and mobile internet access in developing countries, digital health platforms like Alodokter which are accessible via mobile phones offer practical solutions to overcome geographical barriers and inadequate medical infrastructure. This AI-based approach allows patients to receive consultations, initial diagnoses, and health monitoring without the need to visit physical facilities, making it extremely valuable in areas with limited health access. To maximize this technology, policies should focus on improving the availability and reliability of internet networks, as well as developing education programs that teach effective use of mobile health technology.
Meanwhile, disparities in health service coverage remain a major issue in many developing countries, with World Bank data from 2020 showing that only 54% of the population in low-income countries have access to basic health services, compared to almost universal coverage in high-income countries. AI offers scalable and efficient solutions that can help bridge these gaps, providing broader access to essential health services. Policies that support the adoption of AI in healthcare can extend coverage to underserved populations, improve equity in health access, and enhance overall health outcomes in developing countries.
Enhancing Educational Quality
AI in education offers revolutionary potential to address the challenges faced by the education systems in developing countries, including disparities in teacher quality and educational facilities. For example, Kant Academy has adopted AI technology that customizes learning content to the individual needs of each student. This platform automatically analyzes student responses to learning materials and tests, providing real-time feedback that helps students overcome learning difficulties and strengthen their understanding.
AI technology at Kant Academy also automates administrative tasks such as grading and reporting, freeing teachers to focus on teaching and direct interaction with students. With AI support, teachers gain access to in-depth analytical data about class performance and learning trends, which can be used to refine teaching methods and generally improve the quality of education. This is particularly valuable in developing countries where there is often a shortage of qualified educators and adequate educational facilities.
Education policies that support the implementation of AI should ensure that this technology is affordable and accessible to all layers of society, especially in underserved areas. This includes providing adequate resources and training for teachers, as well as building strong technological infrastructure in educational settings. Thus, AI not only plays a role in improving the quality of education but also becomes key in creating educational equity, allowing students from various backgrounds to access high-quality learning that might previously have been out of their reach.
Enhancing Public Service Efficiency
AI plays a crucial role in simplifying public administration in various countries, not just in the context of processing insurance claims and visa applications, but also in other aspects of public service. The use of AI to automate administrative processes not only frees public servants to focus on more complex tasks but also enhances the efficiency and quality of services provided to the public.
For instance, in Singapore, the government has integrated AI into their e-Government system to expedite the process of licensing and public services. Platforms like SingPass allow citizens to access various government services with a single login, where AI is used to secure data and speed up identity verification and applications. This reduces waiting times and improves public service user satisfaction.
In Estonia, AI has been implemented in the ‘e-Residency’ system that allows non-citizens to establish and manage businesses online from Estonia. This system uses AI to manage application processes and verifications, providing an efficient and transparent way to facilitate international trade and investment.
In the context of government policy, it is important to ensure that the expansion of AI use in public services not only improves efficiency but also transparency and accountability. This can be achieved by developing a strong regulatory framework that governs data collection, use, and sharing, and ensuring that there is adequate human oversight in decision-making influenced by AI. Governments should also encourage public participation in the policymaking process related to AI, to ensure that the use of this technology aligns with societal values and needs.
Encouraging Innovation in the Informal Sector
AI has become a key catalyst for efficiency and growth in the informal sector, which is crucial for the economies of many developing countries. Small businesses can leverage this technology not only to simplify operations but also to expand their market reach. For example, platforms like Jumia in Africa have integrated AI solutions to assist small and medium enterprises (SMEs) in managing inventory, processing transactions, and understanding customer behavior.
Often referred to as the “Amazon of Africa,” Jumia uses AI to provide personalized recommendations to users based on browsing and purchasing history, which enhances sales conversion and customer satisfaction. Moreover, AI also plays a crucial role in Jumia’s payment and financial management systems. The integration of AI in cashier systems allows for detailed and real-time transaction records, greatly assisting SMEs in gaining access to modern financial systems.
With more regular and verified transaction records, SMEs can more easily qualify for loans and obtain capital at lower costs. Financial institutions can use this data to better assess creditworthiness and reduce risk, which in turn lowers the cost of loans for SMEs. Government policies should support these initiatives by providing access to AI technology, necessary training for SMEs, and financial incentives that facilitate the adoption of this technology, thus helping integrate more SMEs into the formal economy and boosting overall economic growth.
Conclusion
For AI to be a catalyst for growth in developing countries, it must be implemented ethically and inclusively. This means designing systems that consider inclusiveness and non-discrimination and protect privacy and data security. With careful planning and implementation, AI can be a powerful tool for advancing development and improving lives without displacing existing jobs. To this end, policy frameworks must incentivize sectors that directly address local challenges and integrate AI solutions in ways that complement the human workforce, ensuring a future where technology and tradition can coexist harmoniously.
