African businesses ahead in deploying 4IR technologies
PwC study finds that Southern African firms were consistently ahead of those in Europe and the Middle East in their deployment of technologies such as artificial intelligence
Private businesses in Africa are deploying fourth industrial revolution (4IR) technologies faster than their counterparts in more developed markets, a move that could help the continent finally catch up with the rest of the world or even overtake some developed markets in the long term.
A survey conducted by auditing and consulting firm PwC on digitalisation among private businesses showed that southern African ones in particular were consistently ahead of those in Europe and the Middle East in their deployment of technologies such as artificial intelligence, augmented reality and the use of robotics and drones.
There were also more businesses on the continent that planned to allocate more than 5% of their overall investment budgets to digital technologies compared with peers elsewhere. Gert Allen, entrepreneurial and private business leader at PwC Africa, said the pace at which private businesses, who made up about 90% of companies on the continent, were investing in digital technologies gave Africa an opportunity to be ahead for a change.
“There are two elements to this. It's an opportunity to catch up. But the other side is that we are in competition with some of our overseas counterparts. And you have an opportunity now to actually bypass them by embracing these new technologies whereas they still sit with the old technologies,” said Allen.
The survey, carried out at close to 3,000 businesses, included Africa for the first time, but it only looked at digitalisation among unlisted firms in retail, industrials and manufacturing. Seventy out of the 90 southern Africa participants surveyed were SA businesses.
The fact that sectors such as manufacturing and retail, which absorbed large numbers of the labour force in the past, were moving ahead of some developed markets in embracing 4IR technologies brought a sense of urgency to the need to upskill the continent's workforce, said Allen.
In SA, President Cyril Ramaphosa appointed a commission in April to look at how the country can take advantage of the opportunities presented by the digital industrial revolution. However, SA still has a large unskilled workforce. An earlier PwC report on the skills gap in Africa found that 87% of SA businesses were most concerned about the lack of skills in the country.
“That is why it is so important that we must get our educational system in African sorted out so that people can be skilled up to take on those [4IR] jobs,” said Allen.
Allen said more businesses were likely to embrace digitalisation because they can now produce goods and services at a lower cost than their European counterparts, for instance, who embraced industrialisation decades ago and now sit with older technologies.
“At a time of uncertainty in the economic outlook for Africa, thanks in part to global headwinds, this picture provides significant encouragement because the right approach to digital is sure to yield dividends in the longer term,” said Allen.