The next poverty trap may be digital

 

ARTIFICIAL intelligence (AI) is widely regarded as the next industrial revolution. Much attention has focused on whether AI will replace jobs, create new industries or transform economies. Yet a more fundamental question deserves equal attention: who will be left behind?

As AI becomes increasingly integrated into workplaces, schools and everyday life, access to AI capabilities may become one of the defining factors shaping future inequality.

Consider two graduates entering the workforce with similar qualifications, academic performance and motivation. One knows how to use AI tools to improve productivity, analyse information, automate routine tasks and support decision-making. The other does not.

Several years later, the gap between them may have little to do with intelligence or ambition, but everything to do with their ability to work alongside emerging technologies.

History suggests that every major technological revolution creates both winners and losers.

The Industrial Revolution rewarded those who adapted to mechanised production, while the digital revolution created opportunities for those with access to computers, the internet and digital skills. Those without such access often struggled to keep pace.

The AI revolution may follow a similar path.

Unlike previous digital divides, however, the challenge is no longer simply about internet access. Malaysia has made considerable progress in expanding digital connectivity.

According to the Department of Statistics Malaysia (DOSM), internet usage among individuals aged 15 and above exceeded 97% in 2024, reflecting the country’s significant digital progress.

The next divide may instead be determined by who knows how to use AI effectively.

Workers who can harness AI are likely to complete tasks more efficiently, acquire new skills faster and make better-informed decisions.

Businesses that integrate AI into their operations may become more competitive, while employees who understand how to work with intelligent technologies are likely to become increasingly valuable.

This shift is already underway. A survey by Ernst & Young (EY) Malaysia found that 93% of Malaysian employees are already using generative AI at work.

Among them, 81% reported significant time savings, while 76% experienced higher productivity. AI is no longer a technology of the future. It has become part of everyday work.

Those who fail to develop these capabilities risk falling behind, particularly young people entering the labour market.

As routine tasks become increasingly automated, employers are placing greater value on workers who can analyse information, solve complex problems, communicate effectively and collaborate with AI technologies.

The implications extend beyond employment. Students with access to AI-assisted learning tools may enjoy educational advantages over those without similar resources.

Small businesses that adopt AI solutions may outperform competitors that lack the knowledge or capacity to do so. Communities with stronger digital ecosystems may also attract greater investment and better economic opportunities.

Over time, these differences can widen existing inequalities.

Research by the International Monetary Fund estimates that AI will affect nearly 40% of jobs worldwide, with advanced economies facing even greater levels of exposure.

The IMF also warns that, without appropriate policies, AI could widen inequality by disproportionately benefiting those who already possess higher levels of education, skills and digital access.

The issue is particularly relevant for Malaysia. Research by the Institute of Strategic and International Studies (ISIS) Malaysia estimates that around 4.2 million workers, representing 28% of the labour force, are highly exposed to generative AI.

(Image: Eraspace)

When workers with medium-high exposure are included, nearly half of Malaysia’s workforce could see a significant share of their jobs transformed by AI.

These developments challenge traditional understandings of poverty and vulnerability.

For decades, poverty reduction has focused on improving incomes, education and living standards. These priorities remain essential. However, future inequality may increasingly depend on whether individuals possess the digital capabilities needed to benefit from technological change.

This idea echoes Nobel laureate Amartya Sen’s Capability Approach, which argues that development is not simply about possessing resources but having the capability to use them to improve one’s quality of life.

In the AI era, access to technology alone will not be enough. People must also possess the knowledge, skills and confidence to use it effectively.

As Malaysia prepares to implement the Thirteenth Malaysia Plan (RMK-13), digital inclusion should extend beyond expanding internet access.

Greater emphasis should be placed on AI literacy, digital skills training, lifelong learning and ensuring that opportunities created by AI are accessible to all, particularly rural communities, lower-income households, informal workers and small businesses.

AI should not be viewed as a threat. It has enormous potential to improve productivity, expand access to knowledge and strengthen economic growth.

Malaysia is already positioning AI as a strategic growth sector, with more than 280 AI-related companies operating nationwide and ambitions to further expand the ecosystem.

The challenge is to ensure that these benefits are shared broadly rather than concentrated among those who are already advantaged.

Malaysia has made significant progress in reducing poverty, but inequality continues to evolve.

In the decades ahead, the defining divide may no longer be between those who are rich and poor, but between those who can harness artificial intelligence and those who cannot. If left unaddressed, the next poverty trap may well be digital. 

The author, Dr Nik Zirwatul Fatihah is a Research Fellow Post Doctorate at the Ungku Aziz Centre for Development Studies (UAC), Universiti Malaya.

The views expressed are solely of the author and do not necessarily reflect those of  MMKtT.

- Focus Malaysia.