AI unlocks $15.7 Trillion opportunity, but hurdles await Africa

The transformative potential of artificial intelligence (AI) is hard to overstate, with a projected $15.7 trillion contribution to the global economy by 2030, according to PwC estimates. This staggering figure underscores AI’s role as the biggest commercial opportunity in today’s rapidly evolving business landscape.

In South Africa, major corporations and smaller businesses alike are recognizing AI’s capacity to enhance productivity, elevate customer experiences, and propel growth. However, as detailed in a study by IBM’s Institute for Business Value, local organisations confront numerous obstacles in their quest to modernise and embrace generative AI technologies.

The Barriers

South African businesses grapple with a multitude of challenges, shared by their regional counterparts, including market and regulatory factors, workforce readiness, skills gaps, and ethical and governance concerns. For many local firms, particularly small and medium enterprises (SMEs), navigating these hurdles can be a daunting endeavour.  

Overcoming the Obstacles

The key to unlocking AI’s full potential lies in a robust strategy aligned with specific business goals. “It is critical that CEOs in Africa establish and implement clear and consistent standards concerning the utilisation of AI across all strategic focus areas,” I said. “This will determine the level of investment and, ultimately, an organisation’s success in a rapidly advancing digital economy.”

Collaborative partnerships are critical for filling gaps in skill sets, developing robust data strategies, and guiding the organisational change necessary for successful AI adoption, especially for SMEs.

Umbono Cloud Services exemplifies the power of such partnerships, leveraging IBM’s watsonx and IBM Discovery to build a natural language intelligent assistant capable of assisting businesses with customer service, online purchasing, booking appointments, and more.

Ethics, Governance, and Trust  

As AI adoption accelerates, prioritising ethics, governance, and trust is paramount to ensure the deployment of responsible AI. IBM’s research indicates that investments in AI ethics are growing, projected to reach nearly 9% of AI spending by 2025, up from 3% in 2018.

“Integrating AI in business operations has become a business imperative,” I noted. “But all of these benefits fall away if AI is not implemented responsibly or lacks trust.”

To aid organisations in applying AI responsibly and preparing for forthcoming global regulations, IBM released watsonx.governance last year – an integrated platform to help businesses manage AI at an enterprise scale and adhere to a broad range of AI regulations.

Addressing the Skills Gap

The rising demand for automation across sectors underscores the pressing need to address the AI skills gap. Over the next three years, an estimated 40% of the organisational workforce will require reskilling in AI and automation. 

IBM has committed to democratising AI education, aiming to train two million learners, with a focus on underrepresented communities, in AI over the same period. This initiative will be achieved through collaborations with university partners to deliver AI training and generative AI coursework via IBM SkillsBuild, which offers enhanced access to AI education and in-demand technical roles.

The Future of AI  

As nations worldwide prioritise AI as a strategic asset, South African businesses must stay abreast of emerging trends, such as the rise of enterprise AI, increased use of open-source AI models, the rapid expansion of APIs, and a heightened focus on AI safety and ethics. Embracing these developments will be crucial for maintaining competitiveness and relevance in a digital-first global economy.  

While the journey to AI adoption in South Africa is riddled with challenges, the potential rewards are immense. By embracing a strategic approach, fostering collaboration, prioritising ethics and governance, addressing the skills gap, and staying attuned to emerging trends, local organisations can harness AI’s transformative power to drive sustainable growth, foster innovation, and propel the country toward a brighter future.

By Ria Pinto, General Manager and Technology Leader, IBM South Africa

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