Bangladesh is gearing up for an AI-driven economy, but the current state of technology in the country raises concerns. According to the Economic Census of 2024, only 2.44 percent of manufacturing establishments in Bangladesh utilize computers or information technology in their production processes. The budget for the fiscal year 2026-27 envisions the establishment of specialized AI, machine learning, and big data laboratories, with plans to integrate AI into public services, education, health, and agriculture sectors. Before fully embracing this futuristic vision, critical questions need to be addressed regarding who will harness AI for increased productivity and how these benefits will be distributed across society.
In Bangladesh’s previous economic transformation, success was driven by a large labor force connecting to global production, notably through the ready-made garments industry. The current challenge is distinct, with a significant gap between the increasing working-age population and job creation in the economy. Many new entrants to the workforce have been absorbed into low-productivity agricultural jobs. To drive economic growth, Bangladesh not only requires more employment opportunities but also a focus on enhancing productivity for both workers and businesses.
The integration of AI impacts both sides of the productivity equation, introducing new capabilities while diminishing the advantage of traditional low-cost labor. Automation technologies reduce the reliance on cheap labor for investment decisions, potentially altering the dynamics of industrial relocation. Furthermore, advancements in AI are lowering the cost of accessing valuable knowledge, making it more accessible to a wider range of businesses in Bangladesh.
However, despite the availability of cheaper knowledge, the distribution of productivity remains uneven across sectors and firms in Bangladesh. Research indicates that the most productive firms in the country are significantly more efficient than others, accounting for a substantial portion of exports and formal employment. The challenge lies in ensuring that AI adoption benefits not only the already productive firms but also smaller businesses, which may struggle to keep pace with technological advancements.
For Bangladesh to effectively leverage AI, a focus on inclusive development is crucial. Smaller firms need support in applying existing AI tools to practical business challenges and sharing successful strategies. Collaboration between universities, industry associations, and government entities is essential to facilitate the adoption of AI in various business functions. The government’s emphasis on democratizing economic opportunities in the FY2026-27 budget underscores the importance of inclusive growth that benefits all segments of society.
Ultimately, the success of Bangladesh’s AI transition hinges on its ability to broaden economic opportunities and create better jobs for all. While the potential of AI is vast, the key question remains: will AI contribute to a more inclusive and competitive economy, or will it exacerbate existing inequalities? The path forward lies in ensuring that AI adoption enhances the capabilities of all stakeholders, setting the stage for sustainable economic growth and shared prosperity.
