How Ready Is Your Economy?

No one knows how big AI will get, but there’s little doubt it will have a have a significant influence on the future of economic development. IDC says worldwide spending on AI will more than double, to $632 billion, by 2028. Acting on the potential of this evolving technology should be an economic priority in every region around the world.?

BCG’s new AI Maturity Matrix, which assessed 73 global economies in a new report and an interactive dashboard , can help governments navigate the economic challenges and opportunities offered by both traditional and generative AI. The matrix provides a broad view of global adoption: the vast majority of economies are gradually adopting AI, but there is a small, influential group of AI pioneers that are leading the way.??

Understanding Exposure and Readiness?

In our research, we investigated each economy’s level of exposure to AI by sector, defining exposure as the potential for AI to have an impact negatively or positively: job displacement because of automation on the one side, for example, and new employment opportunities on the other.??

Job impact, though, is only one dimension of exposure. As AI improves productivity through automation-optimized processes, entire businesses—and even economies—can benefit. Small businesses, meanwhile, could struggle to compete with larger businesses in this area, potentially leading to a negative impact on entire sectors.?

Along with exposure, we also analyzed each economy’s readiness for AI—that is, its ability to effectively implement and integrate the technology. ??

Here’s what we learned:?

Six sectors have the most exposure to AI-driven changes: information and communication, high-tech goods, retail, financial services, public services, and motor vehicle manufacturing.??

AI can create positive ripple effects throughout an economy, driving a shift in GDP. Experimentation and deployment in one industry can spur growth in adjacent sectors and allow new uses of the technology to take hold.??

Only five economies are categorized as AI pioneers: Canada, Mainland China, Singapore, the UK, and the US. These five are leading the way in skills, R&D, ecosystems, and investments. But they are the minority. Most aren’t supporting enough research or investment, hampering startups and homegrown solutions. ?

Ambition is not enough. Many governments have communicated AI strategies and even created AI ministries, but they need to go further and take concrete actions, such as forming test beds for R&D.??

Exposure to AI is inevitable, but high exposure isn’t necessarily bad news. In fact, some of the most exposed are also the most prepared.??

Policymakers’ Next Steps?

The AI Maturity Matrix reveals that more than 70% of economies score below the halfway mark in categories such as ecosystem participation, skills, and R&D, with broad repercussions for competition, growth, investment, and workforces.?

Our research identified different archetypes of AI economic development and potential—and a set of initiatives for each archetype:?

• AI Emergents. These economies are at the beginning stages of their AI journey. They can work on creating a foundation that will drive adoption, including international investment and sources of talent and training.?
• AI Practitioners and Contenders. These are the economies that can specialize in niche AI markets and explore the ways in which different sectors can use the technology for efficiency or new lines of revenue. They also need to establish flexible rules for experimentation and address emerging ethical questions.???
• AI Pioneers. Those in the lead can go even further by integrating themselves more deeply into the global tech supply chain. They can also continue to design and implement groundbreaking regulations and standards related to AI.???

AI and its development will pose challenges and opportunities for societies far into the future. BCG’s AI Maturity Matrix gives policymakers a practical framework to navigate the evolving AI landscape and harness its potential to strengthen economies and enhance societal well-being.??

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