AI in development: leapfrog opportunity or new divide?

AI offers leapfrog potential for developing countries if paired with localized solutions and inclusive policies—but risks widening the digital divide without urgent investments in skills, infrastructure, and adaptation.

The World Bank Group (2026) views AI as a potential leapfrog opportunity for developing countries—but only under specific conditions: widespread adoption of localized, low-resource AI solutions (e.g., 'small AI' for agriculture, education, and health), investment in digital infrastructure and human capital, and policies that address labor-market transitions and skill gaps. It cautions that without these enablers, AI risks deepening the digital divide—evidenced by lower AI exposure (26% in LICs vs. 60% in advanced economies), constrained diffusion, and acute shortages of workers with above-basic digital skills in EMDEs. Productivity gains remain uncertain and uneven, with estimates suggesting significantly smaller task-augmentation potential in EMDEs than in advanced economies.

AI offers leapfrog potential in developing countries but only if infrastructure, skills, and governance gaps are urgently addressed; otherwise, it risks widening the digital divide.

The IMF (2026) views AI as a potential leapfrog opportunity for developing countries—especially in agriculture, healthcare, and education—where targeted AI applications have already demonstrated measurable gains in productivity, service quality, and learning outcomes. However, this opportunity is strictly conditional on overcoming binding constraints: unreliable electricity and internet access, acute shortages of digital and job-relevant skills, and weak governance frameworks for data protection, cybersecurity, and ethical AI use. Without concurrent investments in infrastructure, localized innovation ecosystems, and inclusive AI governance, the risk of deepening the digital divide remains high.

AI offers a conditional leapfrog opportunity for developing countries, but only with context-specific industrial policies that build digital capabilities—otherwise, it risks widening the global technology divide.

UNIDO's 2019 position holds that AI and Fourth Industrial Revolution (4IR) technologies present a conditional leapfrog opportunity for developing countries—but only if grounded, agile, and smarter industrial policies are implemented to build foundational digital capabilities, organizational competences, and robust industrial systems. It warns that without such deliberate capacity-building—especially in digital skills, process standardization, and integration into global value chains—the adoption gap will widen, exacerbating the existing international technology and innovation divide. The organization emphasizes that benefits like the 'digital dividend' are not automatic; they depend on incremental absorption, retrofitting of technologies, and context-specific policy design embedded in local industrial realities. Firms in developed countries already possess greater information capability, resources, and policy support, making proactive intervention essential to avoid deepening disparities.

AI offers leapfrog potential for developing countries only if they first build industrial capabilities; otherwise, it risks widening the digital divide.

UNIDO's 2020 position is that AI and other advanced digital production (ADP) technologies present a potential leapfrog opportunity for developing countries to advance inclusive and sustainable industrial development (ISID) and achieve the SDGs—but only if foundational industrial capabilities are first built. It stresses that without addressing five key challenges—basic capabilities, retrofitting and integration, digital infrastructure, digital capability gaps across firms, and access/affordability—AI adoption risks deepening the digital divide rather than bridging it. Leapfrogging is therefore conditional on deliberate, capability-building national strategies supported by international collaboration, not automatic or technologically determined.

AI offers leapfrog potential for developing countries only if supported by strong institutions, skills investment, and infrastructure—otherwise it widens the digital divide.

UNIDO's 2021 analysis positions AI and digital technologies as a potential leapfrog opportunity for developing countries, but only under strict conditions: robust 'analog complements'—including institutional quality, co-investment in skills development, supportive business environments, up-to-date infrastructure, and supplier networks—must be in place. Without these, digital transformation risks deepening the global divide, as benefits concentrate in industrialized nations and China, while most developing countries remain 'laggards' due to insufficient capital, skilled labour, and regulatory capacity; automation, in particular, threatens traditional labour-intensive development pathways by eroding low-cost advantages and incentivizing reshoring.

UNIDO sees AI as a leapfrog opportunity for industrial development in 2022—but only if developing countries receive targeted support to avoid deepening the digital divide.

UNIDO's 2022 Industrial Development Report positions AI and advanced digital production (ADP) technologies as a potential leapfrog opportunity for industrial development—but only if developing countries can overcome severe structural barriers. It stresses that mastery of ADP technologies is a 'key enabling factor' for industrial development, yet highlights an extreme digital divide: less than 2% of manufacturing firms in Africa, Asia, and Latin America were using Industry 4.0 technologies in 2022, while over 90% of global industrial robots and 90% of related patents were concentrated in industrialized economies and China. Without targeted support for technology access, capacity building, and inclusive governance, UNIDO warns that AI risks entrenching rather than bridging global inequalities.

AI is not a leapfrog opportunity for developing countries; its benefits depend on prior capability building, and without it, AI risks deepening the digital and industrial divide.

UNIDO's 2023 position is that AI and digital technologies present neither a guaranteed leapfrog opportunity nor an inevitable new divide for developing countries; rather, their developmental impact depends critically on prior investment in foundational capabilities—including infrastructure, regulation, human capital, innovation systems, and industrial policy. Without deliberate, context-sensitive capability building—especially in manufacturing—developing countries risk exacerbating structural inequalities and widening development gaps, as technological adoption remains concentrated among a small group of frontrunner and follower nations. UNIDO explicitly rejects the notion of leapfrogging, emphasizing that meaningful deployment of AI-related technologies requires gradual, non-linear learning and cannot bypass fundamental stages of industrial and technological maturation.

AI is a leapfrog opportunity for developing countries only if they actively build AI capabilities and enforce technology-transfer conditions; otherwise, it widens the digital and industrial divide.

UNIDO's 2024 position is that AI presents a high-risk, high-reward inflection point for developing countries: it *could* enable leapfrogging in industrial development—but only if deliberate, coordinated action is taken to build domestic AI capabilities, strengthen innovation ecosystems, and implement conditional industrial policies (e.g., requiring technology transfer from MNCs). Without such interventions, AI will deepen the digital and technological divide by reinforcing dependency—where developing countries remain passive consumers of imported AI technologies rather than active producers or innovators, exacerbating trade deficits and eroding learning opportunities. UNIDO emphasizes that bridging this gap requires targeted investments across all three pillars of AI readiness—government capacity, technology sector development, and data infrastructure—with special attention to SMEs’ absorptive capacity and regulatory frameworks.

AI offers leapfrog potential for developing countries, but only with infrastructure, skills, finance, governance, and international cooperation—otherwise it widens the divide.

UNIDO (2025) views AI in development as a genuine leapfrog opportunity for developing countries—but only under specific enabling conditions: substantial investment in digital and energy infrastructure, targeted skills development for workers, affordable finance for MSMEs, supportive AI governance frameworks addressing ethics and equity, and international cooperation on technology transfer and open standards. Without these, AI risks deepening the digital and industrial divide, especially given stark disparities in internet access, analogue production dominance in LDCs, and structural constraints like unreliable power and high import tariffs on digital technologies.

AI offers leapfrog potential for developing countries but risks widening the digital divide without proactive industrial policies to overcome infrastructure, skills, and institutional barriers.

UNIDO's 2026 position is that AI presents a genuine leapfrog opportunity for developing countries to enhance productivity, innovation, and SDG progress—especially in standardized manufacturing and across value chains—but only if structural barriers (digital infrastructure deficits, skills shortages, financial constraints, dependence on foreign tech providers, and weak industrial policy frameworks) are actively mitigated through targeted, coordinated industrial policies. Without such interventions, AI risks deepening the digital divide by reinforcing techno-economic dependencies, concentrating capabilities among advanced economies and dominant firms, accelerating premature deindustrialization, and undermining employment generation in the Global South. UNIDO emphasizes that not all AI applications require advanced capabilities—basic sensor-based monitoring or chatbots offer accessible entry points—yet adoption remains extremely limited outside large, internationally connected firms in developing countries.

AI offers leapfrog potential for developing Asia—but only if digital infrastructure, human capital, innovation ecosystems, and trade integration gaps are urgently addressed; otherwise, it widens the digital divide.

The ADB's 2026 analysis positions AI in developing Asia and the Pacific as a potential leapfrog opportunity—but only under specific, currently unmet conditions: robust digital infrastructure, high-quality human capital with AI-complementary skills, strong innovation ecosystems enabling local adaptation (not just technology transfer), and deeper integration into AI-related global value chains. Without these, AI risks exacerbating the digital divide, as evidenced by persistent gaps in AI preparedness (AIPI), low firm adoption, constrained productivity gains, and uneven job market demand for AI skills across economies. The ADB emphasizes that leapfrogging is not automatic; it requires targeted investments and policy interventions to overcome binding constraints in computing capacity, connectivity, data infrastructure, and institutional quality.

AI offers leapfrog potential for development only if paired with strong governance, inclusive infrastructure, and policies to bridge the urban-rural digital divide.

The EBRD's 2021 reports acknowledge AI's potential to enhance productivity and support development but emphasize that realizing a 'leapfrog' opportunity for developing countries hinges critically on robust governance, regulatory frameworks, and inclusive digital infrastructure. Without adequate AI regulation—such as human oversight, transparency, data privacy safeguards, and prohibitions on harmful applications—AI risks exacerbating inequalities and deepening the digital divide. The reports highlight persistent infrastructure gaps, especially the urban-rural digital divide in EBRD regions, which undermine equitable AI adoption and suggest that technological advancement alone cannot overcome structural disparities without targeted public intervention and investment in digital inclusion.