Artificial intelligence (AI) has the potential to drive significant economic and social progress, but without careful management, it could also widen development gaps between countries, a new report from the United Nations Development Programme (UNDP) warns. Titled The Next Great Divergence: Why AI May Widen Inequality Between Countries, the report highlights that uneven starting points in technology, governance, and skills could lead to a reversal of decades of progress in narrowing global inequalities.
Asia and the Pacific, home to over 55% of the world’s population, is at the center of this AI-driven transformation. The region accounts for more than half of global AI users and is rapidly expanding its innovation footprint, from China’s near 70% share of global AI patents to the emergence of over 3,100 newly funded AI companies across six economies. If managed well, AI could boost annual GDP growth by around two percentage points and raise productivity by up to 5% in sectors like health and finance, with ASEAN economies alone potentially gaining nearly $1 trillion in additional GDP over the next decade.
However, millions of jobs—particularly those held by women and young people—are vulnerable to automation. Women’s employment is nearly twice as exposed, while youth in high-AI-exposure roles face declining opportunities, threatening early-career pathways. Limited infrastructure, skills, computing power, and governance capacity further constrain AI’s benefits while amplifying risks such as algorithmic bias, data exclusion, and increased energy and water demands. Rural and indigenous communities often remain invisible in AI datasets, compounding the risk of inequity.
The report notes, however, that AI can significantly improve governance and public service delivery. Bangkok’s Traffy Fondue platform has processed nearly 600,000 citizen reports to improve municipal responsiveness, Singapore’s Moments of Life service has reduced paperwork for new parents from 120 minutes to 15, and Beijing uses digital twins to support urban planning and flood management. These examples demonstrate AI’s potential to enhance public administration and service efficiency—but only in countries that have invested in regulatory frameworks, digital infrastructure, and inclusive policies.
Currently, few countries have comprehensive AI regulations, and by 2027, more than 40% of global AI-related data breaches may result from misuse of generative AI, underscoring the urgent need for robust governance. UNDP emphasizes that countries that invest in skills, computing power, and governance systems will benefit, while those that lag risk falling behind.
“As a leader in AI, China, in cooperation with other countries, can help inform discussions on global governance mechanisms to ensure AI is leveraged for sustainable development,” said Beate Trankmann, UNDP Resident Representative in China.
The report, accompanied by nine background papers in collaboration with leading Chinese research institutions, aims to guide policymakers on turning the risks of AI into opportunities for shared progress and inclusive development.
