AI and Bangladesh: A Turning Point for Development

Artificial intelligence is often discussed as the next phase of technological progress, a tool that will make economies significantly more productive and governments more efficient. Yet for countries like Bangladesh, AI represents not only technological modernization, but a shift in how economic value itself is created.

For decades, developing economies have relied on a relatively predictable pathway to growth: Integrating into global markets through labour-intensive production and gradually moving up the value chain. Artificial intelligence raises the possibility that this pathway is changing shape while countries like Bangladesh are still climbing it.

A Development Model Built on Labour

Bangladesh’s economic success over the past four decades has depended primarily on export-led industrialization, anchored by the garments sector, which transformed a largely agrarian economy into one of the world’s fastest-growing manufacturing hubs. The underlying logic was clear: abundant labour allowed Bangladesh to compete globally despite limited capital and technological capability.

Over time, rising productivity, urbanization, and integration into global supply chains created the foundations for broader development. Bangladesh’s growth trajectory mirrors that of many late-industrializing economies -- from South Korea and Taiwan to China and Vietnam -- where labour-intensive exports provided the foundation for industrial upgrading.

Today, policymakers are actively preparing for the next phase of transformation. The draft National Artificial Intelligence Policy 2024 and the broader vision of “Smart Bangladesh” position AI as a driver of innovation, improved governance, and economic modernisation. The policy emphasises ethical deployment, institutional coordination, and the integration of AI across sectors ranging from agriculture to public administration.

In this vision, artificial intelligence appears primarily as an accelerator -- a technology that can help Bangladesh advance along an already successful development trajectory.

When Technology Changes the Rules

Yet AI may not merely accelerate development; it may instead alter the conditions under which development itself becomes possible. Unlike earlier industrial technologies, artificial intelligence targets not only physical labour but routine cognitive work -- the planning, analysis, and coordination tasks that increasingly underpin modern economies.

As production and services become more software-driven, economic advantage may depend less on labour cost and more on access to computing power, digital infrastructure, data ecosystems, and skilled human capital.

Countries that already possess these capabilities may see productivity rise rapidly, while late industrializers face an even steeper path to catching up.

For Bangladesh, the risks are unlikely to appear as sudden industrial disruption. RMG factories will not disappear overnight, and labour will remain central to the economy for years to come. The challenge is subtler: A gradual erosion of the advantages that enabled rapid growth.

If global production relies less on large workforces and more on technological capability, labour abundance alone may become less sufficient as a source of competitive advantage. At the same time, unequal access to skills development, language capabilities, and digital infrastructure may widen internal divides, allowing those able to collaborate effectively with AI systems to advance faster than others.

Perhaps most importantly, Bangladesh risks entering an AI-driven global economy primarily as a user of externally developed intelligence -- relying on tools and platforms created elsewhere while capturing only a small share of the value they generate, potentially placing new pressures on the trade balance.

Adapting to a New Technological Landscape

Some developing countries are already experimenting with new approaches to adapt to the changing technological landscape. Rwanda has pursued targeted applications such as AI-supported medical logistics and autonomous drone delivery systems, focusing on solving specific governance challenges rather than competing across the entire AI value chain.

Indonesia, meanwhile, has emphasised strengthening local-language digital ecosystems to ensure broader participation in emerging AI technologies. These examples suggest that adaptation does not require technological dominance, but strategic alignment between national priorities and technological adoption.

The question for Bangladesh is therefore not simply how quickly to adopt artificial intelligence, but how to adapt development strategy to a changing technological environment.

One priority lies in human capability. As knowledge becomes instantly accessible through AI systems, education must place greater emphasis on reasoning, judgement, and problem-solving rather than fact memorisation and exam outcome optimisation strategies. In an economy where thinking itself can be partially automated, the ability to critically evaluate and apply knowledge becomes an even more central economic skill.

Language capability also becomes critical: Ensuring that Bangla-language AI ecosystems develop alongside English-language tools will determine whether technological gains are broadly shared or concentrated among a narrower segment of society.

A second priority is participation in the global AI economy itself. Competing in artificial intelligence does not require building frontier models (such as ChatGPT, Claude, etc) or semiconductor fabrication plants, activities increasingly concentrated within a small number of technologically advanced economies. Countries can also occupy specific layers of the AI technological stack -- from data ecosystems to specialised industrial applications.

Bangladesh’s experience in large-scale manufacturing, climate adaptation, and digital services could form the basis for applied AI expertise aligned with national strengths. Participation, rather than technological dominance, is the realistic goal.

AI also offers a significant opportunity to strengthen state capacity. Governments are, at their core, information-processing institutions, responsible for managing complex systems ranging from taxation and urban planning to disaster response.

Thoughtful use of AI could tackle corruption, improve public service delivery, enhance tax revenue administration, and support climate resilience planning -- all areas where improved governance would directly contribute to development outcomes in Bangladesh.

Artificial intelligence will not determine Bangladesh’s future on its own. Like previous technological revolutions, its consequences will depend on how societies respond. The country’s development story has long been defined by its ability to adapt to global economic shifts with pragmatism and resilience.

The challenge now is to recognize that AI may be changing the rules of development itself.

If Bangladesh treats artificial intelligence simply as another digital tool, it risks falling behind in a world where advantage increasingly rests on capability and commodified intelligence rather than labour alone.

But if it uses this moment to rethink education, governance, and global economic participation, AI could become a catalyst for a new stage of development for the country.

Mubashshira Rahman is an independent researcher, analyst, and writer. She has worked in policy research in Bangladesh and the UK, and currently resides in the UAE.