Will AI Widen Global Inequality?

Technological advancement empowered by digitalization transforms the nature of work in ways humans could never have expected. Despite having existed for only a few years, advanced artificial intelligence is in a position to take over jobs, influence economies and shift entire markets. For better or worse, AI will have a global impact. What does that mean?

The Current State of Inequalities Between Countries

Global inequality is an unequal distribution of opportunities, might or resources among the world’s population. It shapes the well-being and outlook of more than 8 billion people. Sources of inequality center around culture, economics, politics and society.

People feel the effects of some imbalances daily — those impacting living standards, wealth or decision-making power. It shapes their well-being, sense of patriotism and view of other regions.

A nation’s borders, trade routes, labor force and natural resource deposits influence the health of its economy and citizens. For centuries, location has played the most prominent role in shaping global inequalities. The emergence of AI is changing the game. Whether countries prosper may now depend on how developed their digital infrastructure is.

Data from the International Monetary Fund already proves some countries are more prepared for AI than others. According to its AI preparedness index, North America scores 0.74 out of 1.0. Europe follows closely behind at 0.63, with Asia and the Pacific trailing at 0.52. Sub-Saharan Africa rates just 0.34.

These figures are more relevant than people may realize — they could determine which region benefits from emerging global inequalities.

A Close-Up Into AI’s Effect on Global Inequality

Inequities within a country can compound, creating a far-reaching ripple effect. The workforce is usually a good measure of this phenomenon. Taking an up-close look at it can reveal the gender, racial and income disparities that influence global inequality.

The public’s consensus is that increased AI adoption will lead to fewer jobs. In 2023, around 75% of adults in the United States believed as much.

The workforce will become a massive contributor as AI becomes more prevalent. Advanced algorithms can handle repetitive, task-oriented work, automating jobs without the need to recruit or hire humans.

Already, AI is displacing workers. While the World Economic Forum predicts it will eventually create new jobs, it ignores a crucial fact — those roles will not be accessible to low-skilled, low-income workers.

An advanced AI can work without breaks and identify hidden patterns in datasets, enabling it to outperform humans. It doesn’t even need a salary or benefits in exchange. To compete with this, workers must do things an algorithm can’t, like thinking critically, negotiating or possessing emotional intelligence.

People who spend most of their lives in blue-collar roles won’t be able to easily transition to safe zones like middle management, meaning AI adoption will disproportionately affect historically disadvantaged communities.

As AI shifts the nature of labor, factories full of people will suddenly find themselves out of work. As a result, their spending power will decrease. Many will turn to government assistance to get by. Developing countries may struggle to recover from such an economic blow.

Viewing Its Influence From a Big-Picture Perspective

Here’s how AI could impact the inequalities between countries.

Economic Inequalities

The World Bank created income classifications based on nations’ gross national income per capita. According to its data, high-income continents include Europe, North America and Australia. South America and Asia have a mix of lower and upper-middle incomes. Africa is the only predominantly low-income continent.

Africa relies on labor. That approach makes sense since it is home to over 1.2 billion people — nearly one-fifth of the global population — and has a low GNI per capita. Unfortunately, AI is driving a shift toward capital. The countries with more to invest will benefit the most.

Wealthier nations will use AI as a springboard to advance critical sectors like manufacturing, finance and defense. Penetrating these markets will become increasingly challenging for developing countries, widening the inequality gap. Moreover, automation reduces the need for low-wage foreign workers, further harming economies.

Meanwhile, the increased use of data centers to run resource-intensive algorithms will cause damage. Wealthy regions will contribute the most to climate change but suffer the least. Extreme weather and greenhouse gas emissions will disproportionately affect poor, developing nations, exacerbating inequity.

Cultural Inequalities

What happens when AI becomes a household staple, not merely a business tool? Consumer-facing applications could promote racial, gender and income inequalities within countries, reinforcing biases and contributing to division.

In an extreme situation, it could encourage the development of modern caste systems — fixed social hierarchies that divide people into groups based on where they are born, who they are born to or where they work.

In this scenario, the world’s definition of a “civilized” and “modern” nation would quickly shift, creating a split between those with or without a robust digital infrastructure.

Eventually, policymakers in wealthy regions will move to regulate AI while others play catch-up. The creation of new rules, regulations and standards would help propel some into a new digital age, leaving developing nations further and further behind.

Malicious Intentions Could Exacerbate the Issue

If the world embraces algorithm-based automation, those in charge of leading AI systems will have tremendous power. The more investments there are, the more wealth will be concentrated between various multinational tech companies.

In this future, tech giants could use their money, influence and market domination to influence politics, culture or social norms.

What happens when a corrupt chief executive officer takes over? They could deploy a swarm of AI chatbots to spread misinformation, direct policy creation or shape public opinion.

Their interference does not have to be intentional — placing an algorithm in a decision-making role could facilitate inequality in assistance programs, health care or job placement programs. Machine learning models would pick up on and amplify human biases.

Even in the best-case scenario, AI will displace many in the workforce. Robotics mainly affected factory and warehouse workers. AI is different. It can replace creatives, office workers and project managers. According to a study from McKinsey & Company, it’s possible to automate an estimated 45% of all workplace duties.

People who cannot compete with AI will have fewer job prospects. In this employer’s market, corrupt business owners could exploit their desperation by paying them as little as possible while treating them poorly.

AI Does Not Have to Contribute to Global Inequality

The doom-and-gloom outlook that AI will foster division, create class divides and encourage corruption is not a guarantee — it is a timely warning. The power to shape the world’s future and close inequity gaps between nations is in the hands of the people. With careful planning, robust governance programs and strategic deployment, the world can benefit without worry.