AI Boom Risks Widening Asia-Pacific Growth Gaps: ADB Report Highlights Deepening Readiness Divides

The Asian Development Bank (ADB) warns that generative AI will likely widen economic growth disparities across Asia-Pacific due to uneven readiness levels.

Advanced economies such as Singapore, Japan, and South Korea lead with superior infrastructure and skills, while developing nations like India and the Philippines lag behind.

Stark Disparities in AI Preparedness

On the AI Preparedness Index, advanced Asia averages 0.19 in infrastructure compared to below 0.11 for many developing countries including Cambodia and Myanmar.

Human capital scores stand at 0.17 for advanced regions versus 0.13 in developing ones, evidenced by surging AI skill demands in leaders like Singapore.

Gaps persist in innovation ecosystems averaging 0.17 and regulatory frameworks at 0.20 for advanced economies against 0.11-0.12 in developing peers.

Economic Impacts and Future Projections

AI-driven productivity gains in developing Asia are projected at 0.2% to 6.9%, far lower than in advanced economies due to sectoral and readiness constraints.

By 2030, GDP growth could increase by 0.6 to 2.1 percentage points in advanced Asia and 0.2 to 1.8 in developing Asia, easing slightly by 2040.

Labor markets face uneven effects, with services boosting jobs in advanced economies but risking net declines in less-prepared developing regions.

Historical Context and Policy Path Forward

Since generative AI's rise with tools like ChatGPT in 2022, Asia's digital divides—rooted in uneven early-2000s infrastructure builds—have intensified.

To counter widening gaps, investments in digital infrastructure, education, and innovation are essential for developing economies.

Workforce reskilling, social protections, and AI value chain integration can mitigate displacement while enabling catch-up growth up to 0.4 percentage points.