A new report is making a bold claim: public sector AI could be the single biggest development leapfrog for emerging markets, potentially boosting GDP by up to 4 percent and slashing government deficits by as much as 22 percent by 2035. This isn't just about chatbots for government websites; it's a fundamental reimagining of how governments operate, deliver services, and foster economic growth.
The report, which modeled the economic impact on countries like Brazil, Mexico, and Nigeria, argues that a unique combination of demographic momentum, rapid digital adoption, and fewer legacy systems gives these nations a chance to bypass traditional, slower development paths. The value, it says, comes from three core areas: making government itself more efficient, radically improving public services like healthcare and education, and directly fueling national productivity.
The numbers are attention-grabbing. Beyond the 4 percent GDP uplift, the modeling projects a potential 1.5 percentage point reduction in unemployment and a 2 percent rise in household incomes, all driven by AI adoption within the public sector alone. This is attributed to everything from AI-powered tax collection and fraud detection—like systems already used in Brazil and Estonia—to massive productivity gains. In Malaysia, for example, the report cites a program giving 445,000 public officers GenAI tools, saving each user an average of 3.25 hours per week.
The analysis also points to the rise of "agentic AI" as a force multiplier, with systems capable of working across applications to evaluate procurement proposals or help social workers with administrative loads, as is being tested in Saudi Arabia and Singapore.
A roadmap, not a free-for-all
But potential is not destiny. The report’s core contribution is a strategic framework that moves beyond hype, categorizing countries into four "archetypes" based on their readiness. This isn't a one-size-fits-all solution; it's a tailored roadmap.
Explorers, countries early in their journey, are advised to start with simple, high-impact mobile services that don't require massive infrastructure overhauls, like an AI-powered math tutor delivered via SMS in Nigeria. Infra Ready nations, with strong connectivity but weak governance, should focus on data-heavy projects within specific ministries, such as using geospatial AI to map farms in India, while they build up central policy.
Conversely, Governance Ready countries with strong policies but weaker infrastructure can leverage the cloud to deploy lightweight digital systems, like Kuwait’s fully digital court system. Finally, Leaders like Brazil are positioned to scale complex, cross-agency systems, such as using Gemini on Google Cloud to automate and analyze airport baggage screening in real time.
Underpinning this entire vision is a massive need for new skills. The report dismisses the idea of simply hiring a few data scientists, instead proposing a three-tiered skills model for the entire civil service. This includes basic "AI Learners" (everyone), "AI Implementers" who adapt tools for specific workflows, and "AI Innovators" who build new systems from scratch. It’s a call to treat AI literacy as a core competency for modern governance, citing upskilling programs in Chile and the UAE as early examples.
The ultimate message is a call to action for government leaders. The report argues that success hinges on treating AI and cloud not as a series of isolated, flashy pilot projects, but as foundational capabilities for the state itself. For emerging economies, this isn't just another tech trend; it's a strategic imperative to build more efficient, equitable, and prosperous societies.
