Artificial intelligence is accelerating a structural shift in Emerging Markets and Developing Economies, moving growth away from labor-intensive manufacturing toward productivity-led sectors with education identified as the most critical investment driver.
The report, titled “AI-Led Growth and Jobs in Emerging Markets and Developing Economies (EMDEs),” was published during the FII PRIORITY Miami 2026 conference. It was authored by Dr. Jeffrey D. Sachs in collaboration with the Center for Sustainable Development at Columbia University as part of the Institute’s ongoing AI research series.
According to the report, AI is fundamentally altering the development framework that has historically driven economic growth in emerging economies.
It noted that reliance on low-cost labor and manufacturing is declining as AI accelerates efficiency across sectors such as agriculture, mining, commodity-based manufacturing, green energy, and modern services.
The study identified five key structural shifts shaping future growth across EMDEs.
First, the report stated that AI is redefining traditional development models. Labor-intensive manufacturing, once considered the backbone of industrialization, is no longer the primary pathway to economic advancement. Instead, AI-enabled productivity gains are expected to drive growth across both primary and service sectors.
Second, the report highlighted a divergence between growth and employment drivers. While capital-intensive industries are likely to contribute more significantly to GDP expansion, job creation will increasingly come from service-oriented sectors such as construction, healthcare, education, tourism, and public administration. This shift suggests a structural imbalance between output generation and employment distribution.
Third, the report emphasized that education represents the highest-return investment in the AI era. While AI technologies can enhance teaching and learning outcomes, the report stressed that sustained investment in education systems, teacher training, and access to quality learning remains critical to unlocking long-term economic gains.
Fourth, the study identified the creative economy as a major future driver of employment and exports. Sectors such as film, music, fashion, and design were highlighted as labor-intensive and globally tradable industries that stand to benefit significantly from AI-driven tools and platforms.
Fifth, the report underscored the role of public policy in determining whether AI-driven growth will be inclusive. It stated that governments must adopt coordinated strategies across education, fiscal policy, urban development, service delivery, and natural resource management to ensure that productivity gains translate into shared prosperity.
The report also pointed to significant opportunities in Latin America, particularly in green energy and creative industries, describing the region as well-positioned to leverage AI for long-term growth.
The findings reinforce the growing consensus among policymakers and investors that AI will not only redefine productivity but also reshape labor markets and economic priorities across emerging economies with education emerging as the central pillar of sustainable development.