South African businesses face a challenging question: Are they ready to embrace AI and implement the Presidential Commission on the Fourth Industrial Revolution (PC4IR) recommendations by 2030? The technological landscape is ever evolving, making it difficult to answer. However, this is a critical juncture for South African businesses, as they have a unique opportunity to leverage the transformative power of artificial intelligence (AI) as it becomes more mainstream. It is essential to reflect on past technological revolutions and seize the opportunities presented by AI to propel our economy into the future.
Over time, technological advancement has reshaped industries and created unprecedented wealth. For instance, Walmart’s partnership with IBM in the 1970s and the rise of personal computing giants like Microsoft, Apple, HP, and Dell in the 1980s brought forth new paradigms of wealth creation. Unfortunately, South Africa did not fully take advantage of these opportunities due to political instability at the time. However, the dominance of computer operating systems in the 1990s and the dot-com bubble of the 2000s demonstrated the transformative potential of technology. During this period, South Africans such as Elon Musk from Pretoria and Mark Shuttleworth from Welkom created PayPal and Thawte, respectively, making billions of rands, and taking advantage of the era. More recently, personal computing and mobile technology have empowered individuals to challenge traditional business models, paving the way for independent endeavours in various sectors.
As we enter the era of mainstream AI, the landscape of opportunity is undergoing yet another seismic shift. With AI becoming increasingly integrated into business operations, there is boundless potential for wealth creation and innovation, especially for Small, Medium, and Micro Enterprises (SMMEs). The PC4IR has recognised this potential and outlined a comprehensive set of recommendations in 2020 to guide South Africa’s transition into the digital age. These recommendations emphasise the importance of investing in human capital, establishing AI institutes, securing data for innovation, and fostering an environment conducive to the growth of future industries.
Although we have observed some of these recommendations being implemented, the pace has been slow. The question that arises is whether South African businesses are ready to embrace AI and put into effect the PC4IR recommendations by 2030. The answer lies in our ability to recognise the urgency of the situation and proactively adapt to the changing landscape. Early adoption of AI presents a unique opportunity for businesses to gain a competitive edge and drive digital transformation. By leveraging AI technologies, organisations can streamline operations, enhance decision-making processes, and unlock new avenues for growth.
AI adoption has the potential to empower Township SMMEs, which form the backbone of our economy. The Township informal market is estimated to be over R600 billion by GG Alcock, these businesses often face significant barriers to growth, such as limited access to resources and technology. While formal South African SMEs contribute nearly 98.5% of the number of formal firms in the economy, they only account for 28% of the jobs, which should be around 60 to 70% based on international trends. By embracing AI, Township SMMEs can overcome these challenges and unlock new opportunities for innovation and expansion. AI can help optimise supply chain management, enhance customer engagement through personalised experiences, and revolutionise the way Township SMMEs operate and compete in the digital marketplace.
However, the journey towards AI adoption is not without challenges. Businesses must navigate issues such as data privacy, ethical considerations, and the digital divide to ensure that AI benefits are accessible to all. Collaboration and partnerships will be essential in driving AI innovation and fostering a culture of continuous learning and adaptation. To compensate for the immigration of skilled labour, more analysts may need to be developed. These analysts should be at parallel processing according to Cognadev’s Cognitive Process Profile (CPP), enabling them to understand the detail and intricacies of operating SMMEs while understanding the strategy management of a senior executive with an international MBA qualification.
In conclusion, South African businesses are at a crossroads, and they need to decide readiness to embrace AI and implement the PC4IR recommendations by 2030. Past technological revolutions have shown that those who seize the opportunities presented by digital transformation and innovation will benefit immensely. Although there are still challenges to overcome, such as the slow pace of implementation and the need to address barriers to adoption, the promise of AI-driven innovation and growth is undeniable. Additionally, AI has the potential to help Township SMMEs thrive in the digital economy, which highlights the inclusive nature of its impact. However, to fully realise this potential, collaboration, innovation, and investment in human capital are essential. As we navigate this digital frontier, we should seize the opportunity to shape a future where AI catalyses prosperity and equitable growth, ensuring that no business is left behind in the journey towards a digitally empowered South Africa.
About the Author
Lisema is a professional non-executive director, author, podcast host, founder and managing director of an organisation dedicated to analyst training, mentorship, and development. His background combines sales effectiveness, financial analysis, and strategy execution, making him adept at parallel processing — understanding both intricate details and overarching company strategies. He is busy with PhD proposal to expand his dissertation: Digital Spaza-shops and the Digitalisation of SMMEs’ in South Africa.
