Artificial Intelligence (AI) has emerged as a transformative force in the global economy, positioning itself as a cornerstone of the fourth industrial revolution. From theory to practical solutions, AI has proliferated over the last decade. Defined as a simulation of human intelligence, AI combines technologies like machine learning, natural language processing and robotics to solve business, economic and social problems.

The impact of AI on developing economies can be illustrated through the experiences of regions like India. The 2023 Ernst & Young report evaluated the contribution of generative AI to India's economy at approximately USD 1.2-1.5 trillion in the next seven years, potentially increasing GDP by 5.2%-7.9%. AI is remarkably used in India for fraud detection and risk management in financial services and personalised learning in education. Companies like HDFC Bank use AI algorithms to analyse transaction patterns and detect anomalies, thereby preventing fraud. Likewise, AI-powered platforms like Byju's offer personalised learning experiences for students, adapting to their learning pace and style. This has democratised access to quality education, helping millions of students across the country improve their academic performance.

What sectors in Bangladesh can be impacted by leveraging AI?

According to the World Bank, Bangladesh's average growth rate over the decade was 6.6%, with 5.8% in 2023. PwC estimated AI's total contribution to the global economy at USD 17 trillion by 2030. Given AI's estimated contributions to the Indian economy, AI could potentially generate billions of dollars for the Bangladesh economy.

There are four sectors in Bangladesh where AI can create a critical impact: In healthcare, it can enhance diagnostic accuracy, assist in early disease detection, manage patient data, and personalise treatment plans. For agriculture, AI-driven solutions can improve crop yields, optimise resource management, and contribute to food security. In manufacturing, particularly the RMG sector, which accounts for 80% of export revenue, AI can streamline production processes, enable predictive maintenance, and facilitate smart quality control. AI integration in RMG can optimise supply chains, forecast demand, and enable personalised designs. AI can automate processes, improve fraud detection, offer data-driven trading decisions, and enhance financial inclusion in financial services.

Across these sectors, AI technologies such as machine learning, computer vision, and natural language processing can analyse large datasets, identify patterns, and make data-driven decisions, ultimately increasing efficiency, reducing costs, and driving innovation in Bangladesh's economy.

Prominent Bangladeshi organisations are already at the forefront of AI innovation. For example, Intelligent Machines (IM) is a leading AI company in Bangladesh dedicated to using AI capabilities to solve problems and drive efficiency across various sectors. IM has successfully implemented AI in companies across telecom, financial institutions, and fast-moving consumer goods. Their AI-based services are reported to provide solutions with over 90% accuracy. The results that IM has provided thus far through AI integration are noteworthy. Unilever has achieved a 260% stretch target in 2021 using Fordo, a precision marketing AI product. BAT gained 253% improvements in brand campaign execution accuracy in 2021 using Shobdo, a speech recognition AI product. bKash gained 76% productivity and a 15% monthly onboarding growth rate with the help of Nimonton and Biponon, two retail AI products. IDLC Finance processes CIB reports in under 30 minutes using Dharapat, a FinTech AI product. Finally, Telenor saved 92.5% of the cost in completing 25 million KYCs in Myanmar using Borno and Chotur, two document verification AI products.

What are the challenges in AI implementation, integration and regulation?

The adoption of artificial intelligence in Bangladesh is still in its infancy, both for AI solution providers and their clients. Companies are reluctant to embrace AI solutions, not only due to a lack of infrastructure but also because of a shortage of understanding of these solutions. There may also be a reluctance to embrace AI solutions due to data privacy concerns. Similarly, the local growth of any AI-based service provider hinges on the readiness of consumers to adopt the technology. Finally, data availability is also a concern since, without data synthesising, the precision of AI solutions depends on the amount of relevant data fed to AI bots for machine learning.

Given this scenario, it is challenging for the government to craft policies that properly regulate the use of AI. The dilemma becomes whether the government should allow AI to proliferate for the sake of innovation or whether strong regulations should be in place well beforehand to uphold data privacy. Perhaps the best practice would be to balance innovation and regulation equally.

What are the prospects of AI in Bangladesh?

AI is catalysing change, enhancing productivity and efficiency, fostering innovation, and creating new avenues for growth. By investing in AI education and infrastructure, Bangladesh can position itself as a hub for innovation, attracting investment and talent while unlocking new opportunities for socioeconomic development.

The ICT Division of the Bangladesh government drafted a National AI Policy to address the challenges of AI adoption and implementation. The policy expands to ten sectors: telecommunication, data governance, environment, energy, and climate change. It introduces a robust framework for ethics, data privacy, and security, proposing the establishment of an independent National AI Center of Excellence and a High-Level National AI Advisory Council for facilitating and regulating AI services. The policy also provides detailed implementation plans for government ministries, academia, and private institutions. The objective is continuous monitoring, evaluation, and alignment with global advancements. It also addresses other challenges more thoroughly, offering specific mitigation strategies for data privacy, cybersecurity, and risk management.

Comparing AI's potential impact on Bangladesh with other developing countries like India and Africa reveals similar opportunities for economic evolution. As AI continues to engage with every corner of society, education and awareness of its usage and benefits are paramount. Adopting best practices, investing in infrastructure, and fostering a culture of innovation will be crucial in harnessing AI's benefits.

Rafsan Zia is a Business Consultant at LightCastle.