The writers are officials at Invest Bhutan within the ministry of industry, commerce and employment

Back in 1999, Bhutan became the last country in Asia to introduce television and the internet. Fast-forward to today, and it is one of the most wired countries in the world with fibre optics and 5G coverage nationwide.

The Himalayan nation of fewer than one million people is taking incremental but bold steps to build up its machine learning and artificial intelligence sectors. For ICT companies looking for a foothold in the region, Bhutan offers a sustainable and fast-growing digital economy to tap into. And there is already one Silicon Valley company paving the way.

Diligent, curious, analytical

iMerit Bhutan is a testament to advancements in the country’s digital infrastructure and government support mechanisms such as fiscal incentives. The local company, which was established by its Californian parent in 2019, specialises in data annotation for AI solutions serving clients globally, working in everything from autonomous vehicles and satellite imagery to medical research, ecommerce, and fintech.

From its base in Thimphu TechPark, the company is making advancements in generative AI through its proprietary Ango Hub Deep Reasoning Lab, where so-called AI fine-tuning is enabled with human oversight. What has helped iMerit Bhutan advance with this lab is the strength of the country’s talent pool, which is proficient in English and offers the key skills suited for data annotation.

Arpan Subba, the company’s local project manager, describes the country’s young talents as combining “diligence, curiosity and analytical thinking [which] makes them invaluable contributors to AI-driven initiatives”.

In six years, the company has grown to 140 employees, all of whom are Bhutanese nationals. Some 65 per cent of them are women, which exemplifies Bhutanese values of diversity and inclusivity. The firm’s focus on empowering the local workforce has set a new benchmark for AI-driven enterprises in Bhutan and paved the way for others to follow suit.

Ethical branding

Bhutan’s sustainability credentials are a selling point in attracting AI investors. These considerations play an increasing role in many international businesses’ outsourcing and investment decisions, to meet evolving consumer demands and expectations for environmental and social responsibility.

Bhutan is recognised as the world’s first carbon-negative country. This low carbon footprint ensures that digital operations create minimal environmental damage, making Bhutan a sustainable investment choice for data annotation companies and a setting in which to showcase their environmental and social integrity.

The commitment to a green and inclusive economy aligns with the country’s famed national philosophy of Gross National Happiness, or GNH. This measure, which is used in place of gross domestic product as an indication of national progress, is centred around sustainability, wellbeing and cultural preservation. A new industrial development roadmap envisions building a green, inclusive and sustainable industrial ecosystem that drives long-term economic transformation while remaining deeply rooted in GNH principles.

Another factor making Bhutan fertile soil for AI ventures is its strategic location next to India. Sharing a border with Asia’s growing tech hub, supported by its population of 1.4bn and whose digital economy is forecast to account for one-fifth of its GDP by 2029, provides significant opportunities for Bhutan’s digital economy.

Fledgling future

Of course, Bhutan’s offering for the AI industry still has room to improve. More must be done to link investors with the local talent pool. There’s also a case for higher salaries to keep talent within the country and slow the growing trend of its workforce moving abroad.

Internet instability and high costs are some of the hurdles faced by iMerit Bhutan as a result of a digital economy still in its infancy. Yet the arrival of Starlink last December has improved internet access, reliability and affordability.

Under its latest five-year plan, the government has allocated the equivalent of $114mn for digital transformation, including strengthening cyber security and R&D. The GovTech Agency plans to equip 400,000 Bhutanese with essential digital skills by 2029, while institutions like the Gyalpozhing College for Information Technology and De-suung Skilling Program are poised to expand the talent pools catering to firms like iMerit Bhutan.

The Californian company’s journey demonstrates that Bhutan is ready and eager to partner with forward-looking investors committed to ethical innovation and inclusive growth.

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