Artificial Intelligence in Developing Economies: Unpacking Business Innovations, Prospects, and Challenges

Artificial Intelligence (AI) stands as a revolutionary, disruptive and transformative technology with the capacity to significantly enhance business operations globally. In emerging economies, AI integration presents a dual landscape of vast opportunities and substantial challenges. This conference paper offers a comprehensive review of AI applications, prospects, and challenges in the manufacturing, agriculture, retail, financial services, healthcare, and mining key sectors within developing countries. By examining detailed case studies from Brazil, Chile, India, Ghana, Kenya, Nigeria, and South Africa, we highlight the notable benefits of AI. The research methodology involves an extensive literature review, analysis of case studies, surveys, and expert interviews. Findings indicate that AI can lead to significant improvements in business operations, such as increased productivity, innovation, cost savings, better decision-making, and competitiveness. However, challenges such as data privacy, security concerns, ethical considerations, and potential job displacement are particularly acute in developing economies. Additionally, high initial investment costs, limited access to advanced technology, inadequate digital infrastructure, and complex regulatory environments hinder widespread AI adoption. Despite these obstacles, the potential for AI to expand in predictive analytics, automation, and personalized services is promising, suggesting significant economic and social benefits. Addressing issues such as poor data quality, a shortage of skilled talent, and cultural resistance to change is crucial for effective AI deployment. This review emphasizes the need for strategic investments, robust policy frameworks, and capacity-building initiatives to fully harness AI's potential in emerging economies. Collaboration among policymakers, business leaders, and researchers is essential to overcome these challenges and leverage AI’s capabilities to drive sustainable development, enhance competitiveness, and improve quality of life.