Artificial Intelligence Adoption, Labour Productivity, and Inclusive Economic Growth: Evidence from Developing Countries

Abstract

Artificial intelligence (AI) is reshaping economic development, yet evidence remains limited on whether its adoption promotes inclusive growth in developing countries. This study examines the relationships among AI adoption, labour productivity, and inclusive economic growth, with particular attention to the mediating role of labour productivity. Using cross-sectional secondary data from 42 developing countries, the study applies descriptive statistics, Pearson correlations, ordinary least squares regression, and mediation analysis. The results show that AI adoption is positively and significantly associated with labour productivity and inclusive economic growth. Labour productivity is also positively related to inclusive economic growth and partially mediates the association between AI adoption and inclusive growth. These findings indicate that AI can contribute to shared prosperity through productivity improvements while also operating through other channels, such as enhanced public service delivery, improved market information, and expanded digital employment opportunities. However, productivity gains alone do not ensure equitable outcomes, particularly where digital access, institutional capacity, workforce skills, and labour protections remain weak. The study contributes cross-country quantitative evidence to the technology and development literature by integrating AI adoption, labour productivity, and inclusive growth within a unified empirical framework focused on developing economies. It concludes that governments should complement AI investment with digital infrastructure, workforce reskilling, inclusive labour-market regulation, social protection, and redistributive policies so that technological gains are broadly shared. Given the cross-sectional design, the findings should be interpreted as associations rather than definitive causal effects.

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