Global trade is expected to expand about 4% in 2026 despite an energy shock and slowing economic growth, but the artificial intelligence boom and intensifying competition over strategic industries are concentrating economic gains in a narrow group of companies and economies, according to a new report by the United Nations Conference on Trade and Development (UNCTAD).
The report, Trade and Development Report 2026: The Geoeconomics of Development, projects global economic growth will slow to 2.6% this year from 2.9% in 2025. It says the resilience of international trade masks widening differences between economies, with most developing countries struggling to catch up with developed nations as investment increasingly flows into industries requiring substantial capital, advanced technology and state support.
The findings point to a shift in the forces shaping international commerce. Governments are increasingly using trade restrictions, subsidies, public financing and technology controls to protect strategic industries and secure supply chains, changing the conditions under which companies invest and countries compete for manufacturing and export opportunities.
The shift comes as the conflict in the Middle East disrupts energy and shipping markets, pushing oil prices to around $100 a barrel, according to UNCTAD. Higher fuel costs are feeding into production and distribution expenses, putting pressure on household purchasing power and business margins while complicating efforts by central banks to contain inflation.
For companies, the combination of more expensive inputs, high borrowing costs and uncertainty over trade rules creates a more difficult operating environment. For governments, it raises the cost of supporting domestic industries at a time when many developing economies have limited fiscal room and rising debt-servicing obligations.
AI trade boom concentrates value
Artificial intelligence infrastructure has become a major driver of merchandise trade, particularly through demand for advanced computing equipment used in data centres. But UNCTAD’s examination of the supply chain for Nvidia’s GB200 NVL72 server rack shows that rising trade volumes do not necessarily translate into broad-based economic gains.
Four supplier segments account for 82% of the product’s traced value added: the chip designer Nvidia, Taiwan-based foundry TSMC, memory and storage suppliers, and companies involved in assembly and testing. Nvidia alone accounts for 67% of the total value added traced in the analysis, while the United States, Taiwan, South Korea and China are the main locations of value creation by supplier headquarters.
The report estimates that post-tax profit accounts for 68% of the value added examined, while workers capture less than 15%. Most developing economies have little direct participation in the supply chain beyond raw materials, with their contribution estimated at less than 1% under favourable assumptions, excluding indirect benefits from AI software, services and innovation.
The figures illustrate a central challenge for countries seeking to benefit from the technology boom: participating in global trade is not the same as capturing a substantial share of its profits, skills development or industrial capabilities.
The report says AI-related computing equipment has helped sustain import growth in major economies. In the United States, imports of automatic data-processing machines rose almost 5% year on year in the first half of 2026, nearly offsetting the negative contribution from other imported products, while the corresponding category accounted for about a quarter of the increase in the European Union’s imports from outside the bloc.
However, UNCTAD warns that the concentration of AI hardware production and value creation leaves most developing economies with limited direct exposure to the gains. Its analysis of more than 1,200 AI firms found that less than 3% were located in developing economies outside China, Singapore and Taiwan, with the share falling below 1% when India was also excluded.
Investment follows strategic priorities
The concentration extends beyond artificial intelligence. Developed economies account for around 70% of greenfield investment in strategic sectors such as semiconductors, AI and clean technologies, with critical minerals the main exception, according to the report. Developing economies attract investment in minerals but often struggle to move into processing and higher-value manufacturing.
UNCTAD’s analysis of industrial policy measures also shows how governments have stepped up intervention. Developed economies introduced an annual average of almost 2,500 industrial policy measures from 2022 to 2025, compared with an average of 986 a year between 2008 and 2021. In developing economies, the annual average rose from 784 to 1,562 over the same periods.
The difference is not simply the number of interventions. Wealthier governments generally have greater capacity to finance industrial strategies through grants, state loans, tax incentives and financial-sector policies, allowing them to support firms and attract investment at a scale that poorer countries may struggle to match.
For Africa and Latin America, the report identifies a particular risk: greenfield investment in strategic industries remains concentrated in energy-transition technologies and critical materials. Without greater investment in domestic processing, manufacturing and related capabilities, these economies could remain dependent on exporting raw commodities rather than building more diversified industrial bases.
That has implications for resource-rich African countries seeking to convert demand for minerals used in batteries, electric vehicles and clean-energy infrastructure into jobs, technology transfer and locally retained value. The report’s central message is that mineral endowments alone do not guarantee a stronger position in global value chains.
Aid cuts and capital volatility add pressure
Financing conditions are another constraint. UNCTAD projects official development assistance from members of the Organisation for Economic Co-operation and Development’s Development Assistance Committee will decline by 6.9% in 2026, following reductions of 8.5% in 2024 and 23.3% in 2025. The projected total is $152 billion in constant 2024 dollars, equivalent to 0.23% of donors’ combined gross national income.
At the same time, volatility in portfolio investment flows to emerging-market economies doubled in 2026, according to the report. Greater volatility can complicate financing for governments and companies, while higher global interest rates and borrowing costs put additional pressure on public budgets and external debt repayments.
The combination leaves developing economies facing a difficult financing equation: they need long-term investment to build industrial capacity and compete in new technologies, but external assistance is shrinking and private capital flows are less predictable.
UNCTAD argues that industrial policy should be designed over decades and supported by financial policies that give domestic capital a greater role in productive investment. It says capital-flow management measures can help contain volatility and create more room for domestic finance to support industrial development.
Energy security creates a different investment case
The report also identifies renewable energy as an economic and strategic opportunity. Renewables now undercut the cheapest new fossil-fuel alternative in more than 90% of cases, according to UNCTAD, strengthening the case for investment in the energy transition as a way to reduce exposure to fuel-price shocks as well as emissions.
For economies reliant on imported fuel, energy diversification could reduce their vulnerability to disruptions in international supply routes and limit the transmission of oil-price increases to domestic inflation and production costs. The report notes that fuel-importing developing countries often have less fiscal capacity to absorb such shocks, particularly where debt-service costs already constrain spending.
UNCTAD also points to regional cooperation as a way for developing economies to expand their policy options. India’s agreement to share digital public infrastructure with 23 countries and Brazil’s expansion of its Pix instant-payment system across South America illustrate how domestic capabilities can support wider regional economic integration.
The report does not argue that globalisation is coming to an end. Rather, it describes a world economy in which trade continues to expand but is increasingly shaped by strategic alliances, industrial subsidies, technology controls and the geography of supply chains.
For businesses, this means that government priorities and geopolitical relationships are increasingly linking investment and market access. For developing countries, the challenge is to secure a larger share of value creation rather than rely solely on export growth.
UNCTAD says that industrialisation and integration into global value chains remain important routes to higher incomes, but their benefits are no longer assured in the new geoeconomic environment. The ability to mobilise finance, develop domestic suppliers and move into higher-value production will increasingly determine which economies gain from the next phase of global trade.
