South African CEOs navigate generative AI challenges

South African CEOs are swiftly embracing generative AI solutions, aiming to boost operational efficiency and innovation, according to a recent IBM study. However, this rapid adoption is not without its challenges, as leaders grapple with workforce concerns and regulatory constraints.

The study, conducted by the IBM Institute for Business Value, surveyed 3,000 CEOs globally, including those from South Africa. It revealed that 64% of respondents believe the success of generative AI implementation hinges more on people’s adoption than on the technology itself. Despite this recognition, 57% of South African CEOs admit to pushing their organisations to adopt generative AI at a pace that makes some employees uncomfortable.

Ria Pinto, General Manager and Technology Leader at IBM South Africa, emphasised the importance of understanding the impact of new technologies on workforce culture. “As more businesses digitise their business models, it is critical to understand the impact of new technologies on the workforce culture and upskill employees to grow their confidence, ensuring the company stays competitive in an ever-evolving market,” Pinto said.

The study uncovered a noteworthy disconnect between workforce readiness and organisational action. While nearly two-thirds (65%) of surveyed South African CEOs believe their teams possess the necessary skills and knowledge to incorporate generative AI, more than half (57%) have not yet assessed the technology’s impact on their employees. This gap is particularly concerning given that 53% of local CEOs report hiring for generative AI roles that did not exist last year, and 43% anticipate reducing or redeploying their workforce due to generative AI within the next 12 months.

Regulatory constraints emerged as a significant barrier to innovation, with more than half (51%) of CEOs identifying this as their primary challenge. This underscores the need for a balanced approach that addresses both technological advancement and regulatory compliance.

The study also highlighted the strain on workforces as organisations rush to adopt generative AI. While 57% of local CEOs believe their recruiting and retention efforts are delivering the necessary skills and expertise, more than half (51%) are already struggling to fill key technology roles. Furthermore, CEOs estimate that 36% of their workforce will require retraining and reskilling over the next three years.

Despite these challenges, South African CEOs remain focused on innovation and growth. Nearly half (49%) ranked product and service innovation as their highest priority for the next three years, surpassing the global average of 37%. Additionally, 43% of CEOs prioritise forecast accuracy to understand sales volumes, reflecting a data-driven approach to decision-making.

As South African organisations navigate the complex landscape of generative AI adoption, balancing innovation with workforce concerns and regulatory compliance will be crucial. The ability to upskill employees, fill critical technology roles, and adapt to evolving regulatory frameworks will likely determine which companies emerge as leaders in this new era of AI-driven business transformation.

Read next: South African Workers Ready to Reskill for GenAI Era