Corporate SA believes skilling for AI is too expensive
Despite a strong push by the government and some industry players for South Africa to start embracing the Fourth Industrial Revolution (4IR), excitement in the labour and corporate sector has been subdued.
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Many unions believe that automation and artificial intelligence (AI) will lead to large-scale unemployment. And a study released by technology research organisation World Wide Worx, in collaboration with enterprise resource planner SYSPRO, indicates that South African enterprises are not enthusiastic about the digital revolution because of costs.
The Fourth Industrial Revolution in South Africa 2019: Enterprise Uptake and Expectations for Emerging Technologies study, focuses on current and planned uptake of emerging business technologies. They include AI, robotics, virtual and augmented reality, the Internet of Things, and blockchain.
“The most surprising finding was the lack of enthusiasm for artificial intelligence, despite the marketing hype that suggests every large business is embracing it,” says Arthur Goldstuck, managing director of World Wide Worx and principal analyst on the research project. “Only 13% of corporate South Africa is currently using AI and, of the rest, 21% plan to adopt it in the next 12 to 24 months.”
The research reveals that one of the main obstacles to adoption is the cost of skills for implementing AI. Of the businesses who are not using technologies, 43% of them cited cost as the key reason.
“Ironically, as awareness of AI grows in South Africa, enthusiasm seems to diminish. Traditionally, intended uptake of new technologies shot up once education, awareness and knowledge increased,” says 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. But a year later, and despite the establishment of the Presidential Commission on 4IR and independent initiatives such as 4IRSA, which aims to get South African stakeholders on the same page on 4IR through research and engagement, the picture is very different.
Goldstruck believes that the market has woken up to the realities of obstacles like skills and cost. This puts it at loggerheads with labour which has been clear that it will only play ball if its members are upskilled so that they are not replaced by robots, This demand is supported by other stakeholders such as government and civil society, which both agree that 4IR cannot result in growing the gaping inequality gap in the country.
The study confirms that employees and graduates entering the workforce should be rightly concerned. It shows that instead of investing in skills, 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,” says 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 reveal the contrast in use between hardware-and software-based automation. The sector with the highest uptake – legal services at 67% – is reaping massive benefits from automating “standard, routine and dull processes” like searches for legal precedents. But in mining, the next sector that is most active in robotics, the focus is on hardware automation of both dangerous and routine processes, like 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,” says 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 underway, 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 Fourth Industrial Revolution.”
The research shows that the uptake of emerging technologies varies dramatically across technology categories and sectors. Virtual and augmented reality is used by a little more than a third of enterprises. But intended usage among the rest falls to below 10%. Blockchain, the technology for distributed ledgers that validate every step in a transaction process, is currently used by fewer than 10% of respondents.
Goldstruck says South Africa’s one stand-out sector, where the country leads the world, is the Internet of Things (IoT). The study reveals near-unanimous usage, with 92% of enterprises have adopted IoT. But it says this is largely a factor of the ubiquity of vehicle tracking and fleet management technology, which began as telematics, and has evolved into a sub-category of IoT.
“The combination of high usage and a strong increase in current and planned usage of IoT technology shows corporates are getting returns from existing IoT implementations,” says Goldstuck.
“As the technology becomes cheaper to obtain and operate, smaller companies will have the ability to compete in productivity with much larger corporates.”
He says this is one of the key benefits of such emerging technologies. The study suggests that once skills requirements are addressed, they become a commodity that any organisation of any size, from start-up to giant corporation, can leverage equally. But for now, companies are making cautious choices. Only 3.1% of the respondents use a combination of robotics and AI. Of the rest, a mere 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,” says Goldstuck.
“The Fourth Industrial Revolution will be cherry-picked, based on what will differentiate a business, rather than representing wholesale take-up of technologies for their own sake.”