The AI revolution will make EM income convergence – or “catch-up growth” – harder as richer economies are better equipped to deploy the technology on a wide scale. It poses a particular headwind to the services-driven economic development path pursued by India and the Philippines. However, it is less of a threat to the more traditional path of manufacturing-led growth, at least for now. And the good news is that some of the applications of AI could help plug development gaps and improve health and educational outcomes in many low-income countries.
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