White paper finds AI capable of doubling SA’s growth

November 19th, 2018, Published in Articles: PositionIT

While South Africa’s many challenges such as high unemployment and weak economic growth are multifaceted, and requires both public and private sector participation, the appropriate application of modern technologies can be an important part of solving many of these challenges, states the authors of a new whitepaper released by Accenture.

Its authors believe that the application of AI technology cannot only solve many of SA’s challenges, but that it has the potential to double annual growth rates. Transform is, however, urgent if businesses wish to maintain their competitiveness in global digital markets and ensure their sustainability, says Dr Caroline Belrose, MD for Accenture Analytics.

The whitepaper attributes the slow rate of AI adoption to the fact that many local organisations are struggling with legacy technologies, systems, business models and corporate structures, large core workforces and sunk investments in owned infrastructure. Others are just starting their digital journeys, and are coming to terms with the new business models, processes and skills needed in an increasingly digitalised world.

Research presented in the paper shows that businesses that operate in the manufacturing, agriculture, and wholesale and retail and accommodation and food services sectors are poised to benefit most by embedding AI. According to the research findings, the impact of AI on these industries could boost annual gross value added (GVA) growth rates by 1,4, 1,2 and 1,1 percentage points respectively, by 2035.

To pursue an AI agenda in South Africa, the authors argue that policy makers and business leaders must prepare for, and work toward, an AI-enabled future – an understand that AI is not another productivity enhancer but a new and discrete factor of production.

This can be achieved in three ways according to the whitepaper:

  • By creating a new virtual workforce that complements and enhances the skills and ability of existing workers and physical capital;
  • By augmenting labour and capital to boost productivity through enhanced efficiencies and effectiveness;
  • Through AI’s ability to stimulate innovation.

Accenture believes that AI should be applied in a capital-labour hybrid model, where it is able to replicate work activities at greater scale and speed.

Despite the payoffs of AI, the authors caution policy makers and business leaders against underestimating the challenges that lie ahead in integrating AI into the economic, social and business systems of our country. Key to this will be successfully integrating human intelligence with machine intelligence, so that they coexist in a two-way learning relationship. Policy makers will also need to re-evaluate the type of knowledge and skills imparted to future generations.

Belrose says that beyond improved efficiencies, AI has the potential to improve the productivity of people and assets, spur innovation and increase competitiveness across sectors.

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