• Dr. B. Lakshmana Rao

Economic development in the 21st century increasingly depends on technological innovation and digital transformation capabilities. Artificial Intelligence has emerged as a critical driver of economic growth, productivity enhancement, and structural economic transformation across developed and developing nations. This paper examines the multifaceted role of AI in economic development, analyzing its impact on productivity growth, employment patterns, industrial competitiveness, and national economic strategies. The study explores how AI technologies enable economic diversification, enhance resource allocation efficiency, and create new value-generating sectors while addressing challenges including digital divides, job displacement concerns, and inequality implications. Through examination of national AI strategies, sectoral applications, and development outcomes, this research demonstrates that AI adoption correlates with accelerated economic growth, improved competitiveness, and enhanced innovation capacity. The paper addresses implementation challenges, policy considerations, and strategic frameworks necessary for leveraging AI as an economic development catalyst. Findings indicate that successful AI-driven economic development requires comprehensive policy frameworks, investment in digital infrastructure, and coordinated efforts to address social and economic transition challenges while maximizing the benefits of technological advancement.

Artificial Intelligence, Economic Development, Productivity Growth, Digital Transformation, Innovation Policy

"ROLE OF AI IN ECONOMIC DEVELOPMENT: TRANSFORMING GROWTH PARADIGMS IN THE DIGITAL ERA", International Journal of Emerging Technologies and Innovative Research (www.jetir.org), ISSN:2349-5162, Vol.12, Issue 8, page no.98-105, August-2025, Available :http://www.jetir.org/papers/JETIRHC06012.pdf

"ROLE OF AI IN ECONOMIC DEVELOPMENT: TRANSFORMING GROWTH PARADIGMS IN THE DIGITAL ERA", International Journal of Emerging Technologies and Innovative Research (www.jetir.org | UGC and issn Approved), ISSN:2349-5162, Vol.12, Issue 8, page no. pp98-105, August-2025, Available at : http://www.jetir.org/papers/JETIRHC06012.pdf