Sustainable Economic Development in the Age of AI: Challenges, Opportunities, and the Role of AI in Governance and Decision-Making

Abstract

Artificial Intelligence (AI) has emerged as one of the most transformative technologies of the 21st century, with implications for both economic growth and governance. As economies strive for sustainability, AI provides unprecedented opportunities to optimize resources, promote green innovation, and enhance inclusivity. At the same time, AI poses challenges related to inequality, job displacement, and ethical risks. This paper examines the dual dimensions of AI: as a driver of sustainable economic development and as a tool for governance and decision-making. Using a qualitative approach supported by secondary data, the study identifies opportunities such as smart agriculture, energy efficiency, and financial inclusion, while also recognizing challenges such as privacy risks, algorithmic bias, and widening digital divides. The findings highlight that AI can significantly accelerate the achievement of Sustainable Development Goals (SDGs) if accompanied by robust governance frameworks, accountability mechanisms, and human-centered design. The discussion concludes that balancing innovation with equity, ethics, and inclusivity is vital for ensuring long-term sustainable development in the AI era.