The Role of Artificial Intelligence and Connector Economies in a Fragmented World

Recent economic research discusses how geoeconomic fragmentation affects the diffusion of artificial intelligence technologies among countries and the strategic position of economies that maintain their global connections.

Artificial Intelligence and the Global Economy

How the economic potential of artificial intelligence can be sustained in a fragmented global economy and translated into productivity gains has recently become a focal point for economists.

While the widespread adoption of technology is critical for macroeconomic gains, economies that establish diversified ties among geopolitical blocs assume an important bridging role.

Gains Beyond the Technology Frontier

Multi-country trade and production models used in the research show that the economic benefits of artificial intelligence are not limited to frontier countries developing the technology, but can spread to a broader geography.

Even countries that do not develop their own in-house models find the opportunity to benefit from this process through the import of hardware, software, and services, as well as AI-powered inputs.

Risks Posed by Fragmentation

Geoeconomic fragmentation trends can undermine technology diffusion through trade barriers such as tariffs, export controls, and restrictions placed on data flows.

Additionally, the reduction of cooperation and information flow is among the factors that negatively affect the pace of innovation on a global scale.

Strategic Power of Connector Economies

For economies outside the artificial intelligence frontier, global fragmentation does not mean inevitable passivity, and strategic moves can compensate for losses.

Assuming the role of a connector economy, increasing AI readiness, and strengthening local capacity offer effective strategies to maintain access to global innovation.