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South African enterprises slow to adopt AI – study

4th July 2019

By: Tasneem Bulbulia

Senior Contributing Editor Online

     

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The technologies making up the Fourth Industrial Revolution (4IR) have yet to be adopted enthusiastically by South African enterprises, a new research study, entitled ‘Fourth Industrial Revolution in South Africa 2019: Enterprise uptake and expectations for emerging technologies’, has found.

The research, conducted by World Wide Worx in partnership with SYSPRO, delved into current and planned uptake of emerging business technologies such as artificial intelligence (AI), robotics, virtual and augmented reality, the Internet of Things (IoT) and blockchain.

“The most surprising finding was the lack of enthusiasm for AI, despite the marketing hype that suggests every large business is embracing it,” said World Wide Worx MD and 4IR research project principal analyst Arthur Goldstuck in a statement issued on Thursday.

“Only 13% of corporate South Africa is currently using AI and, of the rest, only 21% plan to adopt it in the next 12 to 24 months,” he indicated.

A considerable obstacle to adoption, the research revealed, was the cost of skills for implementing AI.

Of those not using it, 43% cited cost as the key reason.

Ironically, as awareness of AI grows in South Africa, conversely, enthusiasm seems to diminish.

“Traditionally, intended uptake of new technologies shot up once education, awareness and knowledge increased,” noted Goldstuck.

“Now, however, we are seeing the flip side of the coin. A year ago, 63% of those not using AI said they planned to use it in the future, and not a single company cited cost as a reason not to do so. A year and much hype later, the market seems to have woken up to the realities of obstacles like skills and cost, and the proportion of those planning to use it has plunged.”

By contrast, robotics – in both hardware and software – has moved to the forefront of corporate strategy.

A technology called Robotic Process Automation (RPA), which automates business processes through software “bots”, has become readily and cheaply available from numerous service providers, resulting in a robotics boom.

“We were astonished when we sifted through the data,” highlighted Goldstuck. “A year ago, only 6% of South African enterprises were using robotics. Then came the RPA explosion. Now the figure stands at 37%.”

The industry sectors that have adopted robotics most enthusiastically also revealed the contrast in use cases between hardware and software-based automation.

The sector with the highest uptake, legal services – at a high 67% – is able to reap massive benefits from automating standard, routine and dull processes such as searches for legal precedents.

On the other hand, the next most active sector in robotics, mining, is focused on hardware automation of both dangerous and routine processes, such as drilling and sorting.

“We’ve predicted for some time that the legal profession would be among the first to use AI and bots to take over and speed up routine tasks,” asserted Goldstuck.

“This poses a challenge to the profession to allocate new roles to recent graduates that are the lifeblood of the industry. While this transition is under way, fewer positions will be available, and we will see a significant shift in skills requirements for entry-level positions. This, of course, is the fundamental challenge of the 4IR.”

The uptake of emerging technologies varies considerably across technology categories and industry sectors.

Virtual and augmented reality is used by a little more than a third of enterprises, but intended use among the rest falls to below 10%.

Blockchain, the technology for distributed ledgers that validates every step in a transaction process, is currently used by fewer than 10% of respondents.

The one standout sector, in which South Africa leads the world, is IoT.

The study revealed near-unanimous use, with 92% of enterprises having adopted IoT. However, this is largely a factor of the ubiquity of vehicle tracking and fleet management technology, which began as telematics, and has evolved into a subcategory of IoT.

“The combination of high use and a strong increase in current and planned use of IoT technology shows corporates are getting returns from existing IoT implementations,” noted Goldstuck. “As the technology becomes cheaper to obtain and operate, smaller companies will have the ability to compete in productivity with much larger corporates.”

This is one of the key benefits of such emerging technologies, the study suggested – once the skills requirements are addressed, they become a commodity that any organisation of any size, from start-up to giant corporation, can leverage equally.

Currently, however, companies are having to make cautious choices, evidenced in the finding that a mere 3.1% of enterprises use a combination of robotics and AI. Of the rest, only 3.6% plan to do so.

“The report reveals quite dramatically the extent to which corporate South Africa seems to have a clear sense of what it needs and doesn’t need from the emerging technologies,” said Goldstuck.

“The 4IR will be cherry-picked, based on what will differentiate a business, rather than representing wholesale take-up of technologies for their own sake.”

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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