Human development is experiencing an unprecedented slowdown, reaching its lowest point in 35 years, according to the latest report from the United Nations Development Programme (UNDP). The 2025 Human Development Report, titled “A Matter of Choice: People and Possibilities in the Age of Artificial Intelligence,” shows that progress has stalled. This was unexpected since recovery was anticipated after the 2020-2021 crises. This year’s report marks the smallest increase in global human development since 1990.
The Human Development Index (HDI) measures achievements in health, education, and income. As the world faces mounting global pressures, including economic challenges and growing inequality, urgent action is needed to avoid prolonged stagnation and potential setbacks in reaching global development goals.
RISING INEQUALITY AND GLOBAL DEVELOPMENT CHALLENGES
According to the UNDP report, inequality between low HDI and very high HDI countries is growing. This marks the fourth consecutive year of growth. It reverses a long-standing trend of decreasing inequality. Countries with the lowest HDI scores are facing especially severe challenges. These challenges are exacerbated by rising trade tensions. Worsening debt crises and jobless industrialization add to these challenges. These issues compound the difficulties already facing low-income nations, making the path to development even more arduous.
Achim Steiner, UNDP Administrator, expressed concern over the deceleration of global development. He warned that if the slow progress of 2024 becomes the new normal, the goal of reaching high human development by 2030 could slip by decades. This could lead to a more divided, insecure, and vulnerable world.
AI: A POTENTIAL CATALYST FOR CHANGE
Despite the grim development outlook, the report highlights the potential for Artificial Intelligence (AI) to reignite progress. As AI rapidly advances across various sectors, there is a growing belief that it could provide new opportunities for development. The UNDP report calls for a human-centered approach to AI. This approach has the potential to transform development strategies and can also open up new pathways for progress.
A survey conducted for the report reveals that people worldwide are optimistic about AI’s potential, despite concerns over automation. Sixty percent of respondents believe that AI will create new job opportunities, particularly in fields that do not yet exist. Half of those surveyed fear that their jobs could be automated. However, the majority see AI as a tool for increasing productivity. This is especially true in low- and middle-HDI countries.
In fact, 70% of respondents in low- and medium-HDI countries expect AI to increase their productivity. Two-thirds of them anticipate AI’s impact on sectors like education, healthcare, and work within the next year. This positive outlook highlights the potential for AI to reshape development. This is especially true in regions where economic and social progress has been slow.
KEY AREAS FOR ACTION IN HARNESSING AI’S POTENTIAL
The UNDP report outlines three critical areas for action to ensure AI’s potential is realized for global development:
- Collaborative Economy: Building an economy where people work alongside AI rather than compete against it.
- Embedding Human Agency: Ensuring human agency is integrated across the entire AI lifecycle, from design to deployment.
- Modernizing Systems: Updating education and health systems to meet the demands of the 21st century.
While AI democratization is already underway, with one in five survey respondents reporting that they use AI, closing the electricity and internet gaps remains a priority. Ensuring that everyone, especially in developing regions, has access to the tools and technologies that AI provides is essential. Still, access alone will not be enough; how AI complements human capabilities will define its impact on development.
THE URGENCY OF POLICY CHANGE
The choices made today will determine how AI impacts human development in the years to come. Pedro Conceição, Director of UNDP’s Human Development Report Office, emphasized that with the right policies, AI could serve as a bridge to new knowledge. It can also provide skills and opportunities. He argued that AI could empower everyone, from small business owners to farmers. This empowerment could help uplift communities and drive economic growth.
However, for AI to fulfill its potential, it is crucial to implement policies that ensure inclusivity, equity, and human-centered design. As AI continues to evolve, the decisions made now will shape the future of global development.
REGIONAL DISPARITIES
Across regions, the report highlights diverging trajectories:
- The United States, Canada & Western Europe dominate global AI research, infrastructure, and investment. Still, they face challenges around labor impacts. There are also issues related to trust and inclusion. While they lead in innovation, the report highlights disparities in AI uptake, workforce preparedness, and demographic representation.
- All countries in this group maintain very high HDI scores, bolstered by advanced infrastructure and strong public services. The United States, Germany, United Kingdom, and Canada are recognized as leaders in scientific knowledge production. They also lead in AI-related technological capacity.
- The United States received the largest share of global AI investment in 2024—$70.2 billion, followed by China and the EU. It also hosts about half of the world’s data centers, reflecting deep global asymmetries in AI compute power. Most large-scale AI models continue to be developed by organizations in the United States, with Western Europe trailing behind in model production.
- Africa, particularly Sub-Saharan Africa, faces major structural development challenges. AI offers the potential to improve education, health, and agriculture, but severe infrastructure gaps—in electricity, internet, and compute power—pose major barriers to equitable access and use.
- East Asia is a global AI powerhouse, with China playing a central role in AI research, robotics, and data ecosystems. However, the report also flags underinvestment in AI safety, and points to structural divides in talent retention and regulatory preparedness across the region.
- Latin America and the Caribbean face inequality, slow educational gains, and digital disparities.
- Arab States show ambition in digital and AI development, especially in the Gulf, but recovery is slow, amid persistent digital divides, and gender-based constraints. The report highlights both the concentration of investment and production in high-income countries and the uneven accessibility of AI benefits across the region.