The eonomics of sovereign AI: balancing autonomy, innovation, and growth in the Asia-Pacific
A report for the AI Adoption Initiative
Oxford Economics was commissioned by the AI Adoption Initiative to develop a research report that supports policymakers as they navigate a growing dilemma: how to strengthen sovereignty without undermining economic efficiency, innovation, or sustainability.
Artificial intelligence (AI) is increasingly recognised as a general-purpose technology with the potential to lift productivity, strengthen competitiveness, and support long-term economic growth across Asia-Pacific and Japan (APJ). At the same time, governments are placing greater emphasis on sovereignty—seeking to ensure that data, infrastructure, and AI systems remain subject to domestic control, oversight, and values. This shift reflects legitimate economic security and societal concerns, but it also raises important questions about cost, scalability, and the pace of AI adoption.
“AI sovereignty is becoming a defining policy issue across Asia-Pacific,” said Henry Worthington, Managing Director at Oxford Economics. “Our analysis shows that the design of these policies matters: approaches that preserve openness while applying strong assurance can support national sovereignty objectives without sacrificing the economic productivity gains AI is expected to deliver.”
The research utilises bespoke economic modelling to quantify both the direct costs of building domestic AI capacity and the opportunity costs arising from slower diffusion and reduced productivity gains. The analysis is supplemented with in-depth interviews with technical, legal, and sector experts.
“Capturing value from AI’s economic opportunities is one of the most important challenges facing national policymakers, and is the driving force behind the AI Adoption Initiative. The report by Oxford Economics is a valuable contribution to understanding the trade-offs governments face as they try to accelerate adoption of economically useful AI applications while addressing sovereignty concerns.” Kevin Allison, Affiliated Research Fellow, AI Adoption Initiative and President, Minerva Technology Futures
The full report can be accessed at AI Adoption Initiative’s website here.
The experts behind the research
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Anubhav MohantyDirector, Economic Impact
Anubhav Mohanty is a Director in the Economic Impact Consulting team. He has led projects with clients across a range of industries helping them understand how economic trends and Government policy can affect their markets. Experience in the private sector includes work for Snapchat, Meta, Amazon, Visa, Accenture, and Bain, among others.
He has also worked with Governments helping them understand how policy changes can affect the wider economy. Experience in the public sector includes work for the UK Department for Business, Energy and Industrial Strategy (BEIS), the UK Home Office, HMRC, and the Department for Transport.
Anubhav joined Oxford Economics in January 2018 with more than 7 years of experience in econometric analysis. Previously, Anubhav worked as an economist with Compass Lexecon and at PwC.
Anubhav has an MSc in Economics (Distinction) from the London School of Economics (LSE) where he also taught economics as a graduate teaching assistant.
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Ben SkeltonLead Economist
Ben joined Oxford Economics in 2013 and has extensive experience in model building and economic analysis. Recently, he has led analytical work for clients including Hargreaves Lansdown and the Skipton Group.
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Bali Kaur SodhiLead Economist, Economic Consulting, Asia
Senior Economist in the Economic Consulting Division in Asia, managing research and analytical projects on a range of topics, each requiring bespoke economic tools.
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Alex AntoniouSenior Economist, Economic Impact
Alex Antoniou is Senior Economist with Oxford Economics on the Economic Impact Team. Alex joined Oxford Economics in 2022 after completing a master's degree at the London School of Economics. Since then, he has worked as an Economist on a range of projects involving advanced economic and econometric modelling, with a particular focus on digital technology policy and regulation across areas such as AI, cybersecurity, cloud storage and computing, and broadband services. Alex specialises in the use of geospatial techniques and spatial econometrics, which he has applied in a number of studies during his time at Oxford Economics. Before joining the Economic Impact Consulting team, Alex spent two years with the Cities and Regions team, producing quarterly forecasts for cities and regions across Southern and Southeastern Europe.
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