Abu dhabi: Emerging markets are facing both unprecedented opportunities and significant challenges due to the rapid advancement of artificial intelligence (AI), according to Qatar National Bank (QNB). The institution emphasized the critical need for these markets to capitalize on AI potential to avoid being left behind in the evolving global economy.
According to Emirates News Agency, QNB's latest commentary, published through Qatar News Agency (QNA), underscores the urgency for emerging economies to take decisive actions in three key areas: enhancing digital infrastructure, developing robust data ecosystems, and investing in skill development. The report suggests that those economies that proactively strengthen these pillars will be better equipped to leverage AI as a catalyst for growth. Conversely, nations that fail to act may find themselves increasingly distanced from the technological forefront, with AI becoming a pivotal factor in economic disparity.
The transformative power of AI is evident, with global market projections by UN Trade and Development (UNCTAD) indicating a twenty-five-fold expansion to approximately USD 4.8 trillion by 2033. While advanced economies are poised to reap substantial productivity benefits, the implications for emerging markets are more nuanced. AI presents a potent avenue to accelerate development, enhance public services, and upgrade industrial capabilities. However, it also threatens to dismantle long-standing competitive advantages and exacerbate the wealth gap, especially in countries reliant on low-cost manual labor.
QNB further elaborated on the potential for AI to boost productivity and fuel development in regions hampered by skilled labor shortages and uneven institutional frameworks. AI-enabled technologies can extend the reach of limited expertise. Nevertheless, the technology also poses a threat by disrupting labor markets and the traditional economic models of emerging economies. The shift from labor arbitrage, dependent on inexpensive human labor, to algorithm arbitrage, reliant on cost-effective AI solutions, marks a significant economic transition.
The International Monetary Fund (IMF) has estimated that up to 40% of jobs in emerging markets are vulnerable to AI integration, particularly in sectors dominated by routine manual tasks. The report highlights that generative AI and AI agents are increasingly capable of handling cognitive tasks, data processing, and billing more efficiently than overseas staff. This impact is already evident in India's vast IT outsourcing industry, valued at USD 300 billion.
Source: Emirates News Agency