SA falls behind global counterparts in blockchain, AI

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An overwhelming majority of South African organisations are lagging behind in the adoption of blockchain, artificial intelligence (AI) and virtual reality technologies, which play a crucial role in the fourth industrial revolution (4IR). 

This is according to a new research study titled: “Fourth Industrial Revolution in SA 2019: Enterprise uptake and expectations for emerging technologies”, conducted by World Wide Worx in partnership with software provider Syspro.

The research found local firms are slow to embrace technologies which are expected to pave the way for the 4IR.Only 13% of corporate SA has deployed AI solutions, while 9% use blockchain platforms. A mere 3.1% of enterprises use a combination of robotics and AI, while virtual and augmented reality is used by just over a third of organisations.

The research delved into the current and planned uptake of emerging business technologies, such as AI, robotics, virtual and augmented reality, the Internet of things (IOT) and blockchain.

Findings are based on telephonic interviews with 400 enterprises, representative of corporate SA, with an emphasis on manufacturing.

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

“Only 13% of corporate SA is currently using AI and 21% plan to adopt it in the next 12 to 24 months.”

A significant obstacle to adoption, the research reveals, is 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 SA, enthusiasm seems to diminish.

The current use of blockchain is up from a mere 3% in 2018. Around 17% of respondents said they plan to use the distributed ledger technology in future, down from 40% in 2018.

“We attribute the low blockchain use largely to lack of a viable business case,” notes Goldstuck.

Traditionally, uptake of new technologies shot up once education, awareness and knowledge increased. Now, however, there is a flip side of the coin, he points out.

“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.”

However, the Dell Digital Transformation Index ranks SA among the top 10 countries that are home to firms leading the digital business maturity level by implementing innovative systems that give businesses a competitive-edge.

The report ranks SA ninth out of 41 countries with a digital maturity score of 50, while the US ranked sixth with a score of 52; Australia is ranked 13th, China 16th and the UK 19th.

Boom in robotics, IOT

Robotics adoption in both hardware and software moved to the forefront of corporate strategy, while IOT deployments (92%) have become the one stand-out sector, in which SA leads the rest of the world, according to the Fourth Industrial Revolution in SA 2019 report.

Robotic process automation (RPA) 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 study reveals near-unanimous usage of IOT, largely due to 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. As the technology becomes cheaper to obtain and operate, smaller companies will have the ability to compete in productivity with much larger corporates.”

The sector with the highest uptake in robotics is the legal services – at a high of 67%, while the next most active sector in robotics is mining.

“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,” asserts 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.”

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