Technology and Innovation Report 2025

Introduction

1. The Technology and Innovation Report 2025, titled “Inclusive Artificial Intelligence for Development”, was released by the United Nations Conference on Trade and Development (UNCTAD) in March 2025. It highlights the need to make AI more inclusive to support the development goals of the Global South.
2. The report introduces the Frontier Technologies Readiness Index, which assesses 170 countries on their preparedness to adopt technologies such as AI, blockchain, and the Internet of Things (IoT). It warns of widening technological divides and calls for global cooperation to align innovation with the Sustainable Development Goals (SDGs).

Key Highlights of the report

1. The Frontier Technologies Readiness Index ranks 170 countries based on their capacity to adopt, adapt, and use frontier technologies. The index covers five components:
   1. ICT deployment
   2. Skills and human capital
   3. Research and Development (R&D)
   4. Industrial capacity
   5. Access to finance
2. United States, Sweden, and the UK lead the 2024 Frontier Technologies Readiness Index with top scores (1.00, 0.97, 0.96 respectively)​.
3. Among the top 10 nations, Singapore (5th) and Republic of Korea (7th) are the only non-Western countries, reflecting advanced AI infrastructure and skills base​.
4. China (21st), Russia (33rd), India (36th), Brazil (38th), and South Africa (52nd) are the best-performing developing nations on the index​.
5. AI market value is projected to reach $4.8 trillion by 2033, accounting for 30% of the total frontier technologies market (estimated at $16.4 trillion)​.
6. Private investment in AI remains highly concentrated:
   1. US: $67 billion (70% of global share)
   2. China: $7.8 billion
   3. India: $1.4 billion (10th globally)​
7. The US and China dominate frontier AI development — together hosting most supercomputers, cloud services, and AI companies​.
8. Developing countries face wide gaps:
   1. On average, LDCs’ skills scores are less than half of developing countries and less than one-third of developed countries, reflecting severe disparities in skills readiness for frontier technologies .
   2. ICT and finance are major weaknesses for most Global South economies​.
9. BRICS+ nations like China, Brazil, India, and the Philippines outperform expectations based on GDP per capita — India ranked 76 places above its income-based position​.
10. 100 global companies account for over 40% of R&D investment, most of them headquartered in the US and China. No African or small South Asian economy features in the top 100​.
11. The AI divide is deepening:
    1. Access to AI compute and infrastructure remains concentrated.
    2. Most SMEs in developing countries cannot afford to train their own AI models and must rely on foreign platforms​.

Frontier Technologies Readiness Index Rankings (2024)

(UNCTAD Technology and Innovation Report 2025)

Country	Overall Rank (out of 170)	Remarks
United States	1st	Highest global score: 1.00 (Top in ICT, R&D, and finance)
Sweden	2nd	Score: 0.97; strong across all five pillars
United Kingdom	3rd	Score: 0.96; leading in industrial capacity and digital infrastructure
Singapore	5th	Top non-Western country; advanced in AI policy and smart infrastructure
Republic of Korea	7th	Strong performance in R&D, skills, and manufacturing
China	21st	Leading among developing economies; 2nd in AI investment
Russia	33rd	High industrial and technical base
India	36th	Strong in R&D (3rd) and industrial capacity (10th)
Brazil	38th	High-tech exports and institutional capacity improving
Philippines	41st	expanding digital skills base
South Africa	52nd	Highest-ranked African economy

India’s performance

1. India ranks 36th out of 170 countries in the Frontier Technologies Readiness Index 2024, improving significantly from 48th in 2022. This marks India as one of the fastest-rising developing nations in terms of technology preparedness.
2. India’s scores across the five components of the index are mixed, showing strength in research and industrial capacity, while lagging in ICT and skills:

Component	India’s Rank	Key Insights
a) ICT deployment	99th	Limited broadband access and infrastructure in rural areas
b) Skills and human capital	113th	Need for formal AI/data skilling; modest gains in high-skill jobs
c) Research and Development	3rd	Strong publication base and institutional research capacity
d) Industrial capacity	10th	High-tech manufacturing on the rise
e) Access to finance	70th	Growing startup ecosystem; need for deeper innovation funding

3. Although India has a lower per capita income, it ranks 76 positions above where it would be expected to stand, highlighting its growing strength in research, innovation, and technology readiness.
4. India also has:
   1. Over 13 million developers, second globally after the US.
   2. Strong GitHub activity, including top contributions in Generative AI projects.
   3. Emerging as a global AI innovation hub, backed by government support.
5. India is one of the few developing countries with cloud infrastructure, emerging AI computing capacity, and an expanding base of AI research institutions.
6. Key national initiatives are strengthening India’s AI ecosystem:
   1. IndiaAI Mission (2024): Cabinet-approved programme to build indigenous AI models, scale research, and expand educational outreach, especially in Tier 2 and Tier 3 cities.
   2. AI Centres of Excellence: Established at IIT Hyderabad, IIT Kharagpur, IISc (with Kotak), and NASSCOM. These centres focus on interdisciplinary AI research in healthcare, agriculture, and urban sustainability.
   3. Digital India Bhashini Initiative: Provides AI-powered language solutions for all 22 Scheduled Indian languages, enabling inclusive digital access.
   4. IndiaAI Dataset Platform: Designed to support data-driven AI development by providing quality datasets to developers and startups.
7. UNCTAD advises India to:
   1. Continue building AI and semiconductor infrastructure;
   2. Improve skilling for frontier technologies;
   3. Strengthen innovation funding;
   4. Align AI innovation strategies with the Sustainable Development Goals (SDGs) to ensure inclusive and equitable outcomes.

Challenges and opportunities

1. Global challenges and opportunities

1. Global AI investment remains highly concentrated: Just two countries—the US and China—account for over 80% of private AI investment. This leaves developing nations underfunded and dependent on foreign AI infrastructure​.
2. Technological inequality is widening: A small group of firms in developed countries dominate data, compute, and cloud access. The top 100 firms alone account for 40% of global corporate R&D spending, mostly based in the Global North​.
3. AI threatens labour stability: Up to 40% of jobs globally are at risk due to automation. The lack of universal reskilling programs raises concerns of worsening inequality and job displacement in low-income economies .
4. SMEs and low-income countries face a “compute divide”: Training large-scale AI models requires expensive infrastructure—currently accessible only to a few countries and firms. This could lock out innovation from the Global South​.
5. Ethical and regulatory concerns are growing: The lack of global standards around AI ethics raises risks of biased algorithms, data misuse, and social inequality. UNCTAD urges governance frameworks that prioritize human rights, sustainability, and transparency.
6. Institutional gaps in AI planning: Fewer than one-third of developing countries have adopted national AI strategies, indicating a broader lack of preparedness to govern frontier technologies

2. India-specific challenges

1. Weak digital infrastructure: India ranks 99th in ICT deployment, reflecting gaps in internet speed, rural access, and affordability of digital services.
2. Severe skills gap in emerging technologies: With a 113th rank in skills, India struggles to provide adequate training in AI, data science, and robotics—particularly in non-metro regions.
3. Limited domestic AI investment: India ranks 10th in global AI investment, but its 2023 figure of $1.4 billion lags far behind the US ($67B) and China ($7.8B). Early-stage startups face barriers to funding and computing access.

Way forward

1. Global direction

1. Establish global AI governance anchored in equity: UNCTAD calls for a multi-stakeholder AI framework, modelled on ESG principles, to ensure that AI development promotes human rights, fairness, and sustainability.
2. Invest in shared AI infrastructure for the Global South: The report urges the creation of global compute and cloud facilities to enable equitable access to AI development resources.
3. Strengthen South–South cooperation: Developing countries are encouraged to engage in AI knowledge exchange, talent collaboration, and policy support, reducing overdependence on high-income economies.
4. Ensure responsible data ecosystems: Robust, privacy-compliant, and secure data infrastructures are essential for ethical AI training and inclusive algorithm development.
5. Adopt a whole-of-government approach: UNCTAD highlights the need for cross-ministerial coordination to align AI policy with national strategies in education, labour, industry, and digital governance.

2. India’s strategic priorities

1. Scale sovereign AI and cloud infrastructure: India should accelerate the development of domestic AI compute capacity and public digital platforms to support startups, researchers, and SMEs.
2. Decentralize AI skilling and R&D: Expand Centres of Excellence and skilling hubs in Tier-2 and Tier-3 cities to foster inclusive innovation ecosystems.
3. Promote open-source, multilingual AI tools: Strengthen platforms like Bhashini and the IndiaAI Dataset Platform to ensure affordable, culturally relevant AI solutions in Indian languages.
4. Align AI innovation with SDGs: Prioritize AI deployment in healthcare, agriculture, climate resilience, and education, linking India’s tech strategy to national and global development goals.

Conclusion

1. The UNCTAD Technology and Innovation Report 2025 reinforces a critical global imperative: Artificial Intelligence must be shaped as a force for inclusive development, not widening inequality. As frontier technologies redefine economies and societies, both global cooperation and national innovation strategies must align with human-centric values and sustainable goals.
2. For India and the Global South, the path forward lies in building sovereign infrastructure, investing in local talent, and scaling open, multilingual, and affordable AI systems. With the right frameworks, frontier technologies can become engines of equity, empowerment, and economic resilience in the decades ahead.

Appendix: About UNCTAD The United Nations Conference on Trade and Development (UNCTAD) is a permanent UN body established in 1964 by the United Nations General Assembly. Headquartered in Geneva, Switzerland, it comprises 195 member states and serves as the UN’s principal body for trade, investment, and development issues affecting the Global South. 1. Objectives UNCTAD’s primary goal is to help developing countries integrate more equitably into the global economy. It promotes fair trade, inclusive innovation, and sustainable development. 2. Core Functions Research and policy analysis on global economic trends and trade-related issues Intergovernmental dialogue to build consensus on development-friendly trade policy Technical assistance and capacity building for developing countries Publication of flagship reports, including: Trade and Development Report World Investment Report Technology and Innovation Report 3. Key Contributions Generalized System of Preferences (GSP): Boosted developing countries’ exports Global System of Trade Preferences (GSTP): Enabled South–South trade cooperation Common Fund for Commodities: Financial support for commodity-dependent economies 4. Role in Frontier Technologies Through its Technology and Innovation Report, UNCTAD assesses countries’ readiness to adopt AI, blockchain, IoT, and other emerging technologies. It emphasizes inclusive innovation, digital literacy, and equitable access to infrastructure in the Global South.