Artificial intelligence (AI) is rapidly transforming the global economy, reshaping labor markets, and influencing industries across the board. The AI sector is anticipated to grow with a CAGR of 36.6% from 2024 to 2030, driven by countries that are quickly advancing in digital and cognitive sectors. As AI becomes an essential part of economic and societal shifts, the AI Preparedness Index (AIPI) offers a critical framework to gauge each nation’s readiness for integrating AI technologies.
The International Monetary Fund (IMF) recently published its AI Preparedness Index for 2023-24, ranking countries based on their level of readiness across four key metrics: digital infrastructure, human capital, technological innovation, and regulatory frameworks.
What is the AI Preparedness Index (AIPI)?
The AI Preparedness Index (AIPI) is a tool developed to evaluate a nation’s ability to adopt and scale AI technologies effectively. This index assesses four major factors that influence AI integration:
- Digital Infrastructure: Measures the strength and accessibility of digital systems and networks necessary for AI deployment.
- Human Capital: Evaluates the availability of skilled personnel trained in AI-related fields.
- Technological Innovation: Considers a country’s investment in AI research, development, and innovative projects.
- Legal and Regulatory Frameworks: Assesses the policies in place to regulate AI, ensuring responsible and ethical use of these technologies.
By examining these metrics, the AIPI ranks countries on a scale of 0 to 1, with higher scores indicating stronger readiness.
Leading Countries in the AI Preparedness Index 2023-24
According to the 2023 AI Preparedness Index from the IMF, several advanced economies are at the forefront of AI readiness. Here are the top 10 countries leading the charge:
- Singapore – Score: 0.80
- United States
- United Kingdom
- Germany
- France
- Canada
- Australia
- Sweden
- Netherlands
- Finland
Singapore: A Model for AI Preparedness
Singapore, with a score of 0.80, ranks as the most prepared country for AI adoption. The nation’s investment in digital infrastructure and focus on developing AI skills among its workforce has positioned it as a global AI leader. According to LinkedIn data, Singapore also has one of the fastest-growing populations skilled in AI technologies. The government’s commitment to AI policies and innovation continues to drive its impressive position in the index.
United States and United Kingdom: Technological Giants in AI
The United States and United Kingdom follow closely, showcasing their strengths in AI research, technological innovation, and human capital development. Both countries have substantial investments in AI through private and public sectors, as well as a robust legal framework that promotes responsible AI usage. Additionally, leading universities and tech firms in these countries contribute significantly to AI advancements on a global scale.
India’s Position and Progress in AI Preparedness
India ranks 72nd out of 174 countries with a score of 0.49 in the AIPI, reflecting a mix of strengths and areas for improvement in AI preparedness. Despite ranking lower than other advanced economies, India boasts the highest percentage of AI users, with around 45% of respondents reporting they use ChatGPT.
India’s AI ecosystem is on an upward trajectory, housing 338 AI startups that signal a growing interest in AI applications. However, the country still faces challenges in scaling digital infrastructure and addressing gaps in AI-related human capital. Training programs and digital upskilling are becoming crucial as India aims to bolster its AI readiness.
Comparison with Other Emerging Markets
When compared to other emerging economies, India shows promising potential. For instance, Bangladesh ranks 113th with a score of 0.38, while Sri Lanka sits at 92nd with a score of 0.43. China is another emerging market that outperforms its peers, ranking 31st with a score of 0.63. China’s substantial investment in digital and AI infrastructure, paired with its AI research initiatives, has contributed to its elevated ranking.
AI Awareness and Consumer Familiarity with AI Tools
Awareness of AI technologies like ChatGPT varies significantly across regions. In India and the United Arab Emirates, over 90% of consumers are familiar with ChatGPT, while China and Saudi Arabia show high familiarity levels exceeding 80%. This heightened awareness reflects strong consumer interest in AI, especially in regions actively exploring AI’s potential in business and education.
Challenges and Opportunities for Advanced Economies
While advanced economies lead in the AIPI, they face unique challenges in AI adoption. Countries like the United States and Germany need to strengthen regulatory frameworks to address concerns around job displacement, data privacy, and ethical AI use. Ensuring a smooth labor reallocation is vital to protect individuals whose roles may be affected by automation. By balancing AI growth with regulatory oversight, these economies can continue reaping AI’s benefits while minimizing negative societal impacts.
Preparing Emerging Markets for AI Integration
For emerging economies like India and Bangladesh, the focus remains on establishing robust digital infrastructure and promoting AI skills development. Building a workforce skilled in AI and digital technologies is essential to leverage the full benefits of AI integration. Initiatives to improve internet connectivity, foster digital literacy, and support AI innovation hubs can drive future growth in these regions.
By addressing these foundational areas, emerging markets can not only improve their AIPI rankings but also prepare their economies to thrive in an AI-driven world.
The growing impact of AI across sectors and economies has set the stage for a profound transformation. According to projections, the global AI market will expand significantly, achieving a CAGR of 36.6% from 2024 to 2030. This rapid growth underscores the importance of AI preparedness, as countries must adapt to both opportunities and challenges.
Countries with robust digital infrastructure, skilled human capital, and proactive AI policies are better positioned to harness AI’s full potential. However, as AI continues to evolve, the need for international cooperation on regulations and ethics will become increasingly crucial. By fostering collaborative approaches, countries can maximize the benefits of AI while ensuring responsible use.
The AI Preparedness Index 2023-24 offers valuable insights into each country’s readiness to adopt and scale AI technologies. As AI reshapes industries and economies, countries like Singapore, the United States, and the United Kingdom lead the way with strong investments in digital infrastructure, innovation, and legal frameworks. Emerging economies, although facing more challenges, are making strides to develop their AI ecosystems.