The economic opportunity of AI in Caucasus and Central Asia

Generative AI will boost global economic growth in the coming decade, and has the potential to increase productivity and boost the competitiveness of the Caucasus and Central Asia (CCA) countries. It could provide a technological leap forward, but it requires more digital skills and investment in innovation.

An Implement Consulting Group study commissioned by Google has estimated generative AI’s GDP contribution and implications for jobs in CCA. Capturing the full potential of generative AI, however, depends on a number of drivers of AI adoption – from fast, reliable, global connectivity to the availability of skilled AI practitioners.

Key findings of the study include:

• Economic Opportunity: Generative AI could boost CCA’s annual GDP by 2% in around ten years if widespread adoption is achieved. In a leapfrog scenario, the region adopts AI at pace with advanced emerging markets which could raise this contribution to 4%.
  The gains come from three sources, including productivity increases from people working with generative AI, freed-up time from generative AI’s automation potential and the re-employment of time in other value-creating activities.
• Job implications: In CCA, 48% of jobs are expected to work together with generative AI, 48% of jobs are likely to remain unaffected by generative AI, and only 4% of jobs are deemed highly exposed to generative AI, leading to some job closures. However, new jobs in the AI-powered economy are expected to replace those lost to automation, resulting in unchanged employment levels.
• AI readiness: The Caucasus and Central Asia face challenges across all aspects of the AI preparedness index. Insufficient high-speed connectivity with global reach, combined with strict data localisation laws that limit access to cloud infrastructure and best-in-class AI models, hinder AI adoption in the Caucasus and Central Asia. To capture the benefits of AI, the Caucasus and Central Asia need to enhance connectivity, invest in skills, and establish clear rules that foster innovation and widespread adoption.