Creating South Africa’s Workforce

Creating South Africa’s Workforce

Digital puts one in three jobs at risk

 

Pandora’s Box

The best thing the cave people did was leave the cave. Technology helped them take that step. Today the possibilities created by technology continue to be felt in every sphere of business and life. Its artefacts, from fire to forks to Facebook and machine learning algorithms, have catapulted humanity from Stone Age to phone age to drone age. We can now solve some of the world’s most intractable problems and finally make significant progress in reducing our usage of our planet’s capital for our living expenses, as economists encouraged us to do over 100 years ago. But technology’s ability to release humans from much physical drudgery is also the source of much fear and anxiety.

John Maynard Keynes predicted this day would come in his 1930 lecture “Economic possibilities for our
grandchildren”. He suggested then that mankind will solve its most pressing economic problem, one that we have been steadily solving since we walked this planet, namely ‘the struggle for subsistence’. Machines will help us produce enough for our needs. But we open Pandora’s box because, as Keynes argued then, solving the economic problem is coupled to a second problem, namely ‘technological unemployment’— ‘unemployment due to our discovery of means of economising the use of labour outrunning the pace at which we can find new uses for labour’. We are producing more and more (products and services) with less and less need for intervention.

What options are open to us?

Job transition is not new. In the pursuit of higher productivity at lower cost options, jobs have for many years been shed. In recent times, many manufacturing and standard business process intensive jobs were outsourced to countries where labour was cheaper. Those jobs rarely made it back to home soil but at least labour in outsource recipient countries benefitted from the employment opportunities created there. Today, the same phenomenon occurs. But now, the search for labour arbitrage is no longer between physical geographies; today, jobs are lost to the digital world and will, in all probability, never to be done by humans again.

The loss of jobs creates an even bigger problem. Machines do not consume things. Machines do not buy things.
So, while machines can replace human work, they do not drive purchasing power and consumption or GDP as humans do. Humans work. Humans get paid. Humans spend. Humans consume. Society progresses. Humans don’t work. Don’t get paid, can’t spend or consume (much). Society regresses.

While the steady march of progress inevitably spells more and more machine augmentation, allowing humans to
use their time, energy and creativity differently, we are ill prepared for its consequences. Labour is still a major
economic growth driver. Jobs remain the primary mechanism of distributing income and providing humans with
access to the economy. This is especially true in emerging markets—like South Africa—where poverty remains a
problem, rates of unemployment are high and the social security blanket is thin.

There is an answer Instead of being replaced by machines, humans must learn to collaborate with machines to enhance their own productivity and ingenuity. We must learn to ‘run with the machine’.
JOBS AT RISK IN SOUTH AFRICA 

South Africa has made good headway in terms of adopting digital, however, the growing maturity of its digital economy has yet to translate into significant growth, especially for labour.

While it scores well in terms of digital competitiveness compared to its emerging market peers (Figure 1) and its demographics—50 percent of the population is under 30 years old—are well suited to the demands of a digitally-driven economy (Figure 2), South Africa’s economy remains weak. Population growth has overtaken GDP growth (Figure 3). Labour and income growth are declining (Figure 4) while unemployment (now at 28 percent), and especially youth unemployment (at 36%), is high. Jobless youth make up 75 percent of the unemployed.

Figure 1: South Africa is ahead in terms of adopting digital

Figure 2: Almost 50 percent of the population is under 30 years old

Figure 3: Population growth has overtaken GDP growth

Figure 4: South Africa – household disposable income and unemployment rate

Until now, digital technologies have been deployed to work alongside people and automation has occurred
only in isolated cases. Now, as digital technologies advance, the threat of automation grows. It will eliminate
a broad swath of jobs across the economy, aggravating the risk of unemployment. And, as digital technologies become ever more sophisticated, more waves of job displacement will almost certainly occur. It is a distressing picture.

To quantify the size of the challenge, Accenture commissioned South Africa-specific research. The result: 35 percent of all jobs in South Africa are currently at risk of total automation— i.e. machines can perform 75 percent of the activities that make up these jobs. The threat is significantly higher in South Africa than in more advanced economies such as Germany (24 percent), and second only to Brazil (46 percent) in this study (Figure 5).

Fully understanding the risk

For the study, Accenture Research developed an econometric model using labour data from Statistics South
Africa (Stats SA)4 to gain insights beyond just the job categories at risk. To fully understand the risk, it identified
the share of job activities in each category that can be automated.

Human-like (analytical, leadership, social intelligence, creativity) and machine-like activities (routine work,
transactions, manual work) were allocated across professions and adjusted based on local South African statistics, including type of work, skills and tasks, the recent skills evolution in jobs, degree of work automation, work supply demographics and productive structure.

The results clearly show that occupations that allocate more time to human-like activities have a lower probability of automation, while workers involved in occupations such as production, office administration, farming, food preparation, construction, mining, transportation, installation and maintenance are at highest risk.

For South Africa, initial findings show that 35 percent of all jobs in South Africa are currently at risk of total automation. By 2025, this will reduce to 20 percent as workforces evolve with new digital demands across
occupations

Figure 5: Jobs with risk of automation by country

 

Which jobs are at risk?

Both white – and blue-collar jobs are at risk (Figure 6).

The more predictable and repetitive the activities that make up the task, the more likely it is to be replicated by machines … and automated. The jobs of clerks, cashiers, tellers, construction-, mining- and maintenance workers all fall into this category.

The more intensive the use of human-like skills to perform a task, the less likely it is to be automated. Jobs with less than 25 percent of risk of automation will comfortably ‘run with the machine’. Hard-to-automate jobs include tasks like influencing people, teaching people, programming, real-time discussions, advising people, negotiating
and cooperating with co-workers.

Figure 6: Top 10 jobs at risk in South Africa

 

Clearly, the threat that automation and the growing sophistication of digital technology (e.g., AI) poses to jobs in
South Africa will add considerable stress on an already pressured economy. But there are also answers and a significant incentive to act now. Digital—a growth multiplier Digital technologies will usher in a new economic era—they overcome the physical limitations of capital and labour, exposing new sources of value and growth, increasing efficiency and driving competitiveness. Without these technologies, companies will lose market share and be left behind, and economies will stagnate. The opportunity for South Africa is considerable.

Accenture Research shows that one major digital technology, artificial intelligence (AI), has the potential to boost labour productivity in countries by up to 40 percent by 2035 as innovative technologies enable people to make better use of their time. By embedding AI and making it a factor of production, this research indicates that South Africa could potentially double the size of its economy five years earlier.

To rise to this challenge, South Africa will need to recalibrate its economy and its workforce for digital, developing
an environment in which humans and machines work together to engage with customers, and create entirely new products, services and markets. This will drive demand and consumption within the economy, boosting growth.

The foundations are in place. With a strong digital economy in the making and the right demographics, South
Africa has the tools to stimulate economic growth and reduce the number of jobs at risk. But, to be effective, the key intervention— increasing the pace at which the workforce acquires the skills essential to maximise the benefits of human-machine collaboration—must start now.

The research indicates that at its current rate of learning, South Africa will shift to ‘running-with-the-machine’ activities (those that that require more human-like skills) slower than other developed countries. However, by reallocating skills and doubling the pace at which its workforce acquires relevant skills, South Africa can reshape work and activities such that the share of jobs at risk of being fully automated reduce from 35 percent (5.7 million jobs) to 14 percent (2.5 million jobs) by 2025 (Figure 5). This intervention equates to reducing the risk of automation for an additional one million jobs.

Figure 7: Doubling the pace of learning will reduce jobs at risk of automation in South Africa from 35 percent to 14 percent by 2015

 

INTRODUCING NEW SKILLS 

Human beings have an amazing capacity to learn new skills and adapt to new environments. This is true not only in early life, but throughout our lives. As the nature of work evolves—i.e., becoming more digital and human, cooperative and collaborative, knowledge and taskbased, flexible and fluid—employees and entrepreneurs will need to adapt their mix of skills and knowledge to embrace new challenges and stay relevant.

In addition to a big data analysis of in-demand skill trends, a review of skill frameworks and a landscape
scan of 1,000 workforce development programmes, Accenture interviewed experts from a wide variety of fields, from neuroscience and corporate learning to education and workforce development. We then used these insights to help identify and categorise both the universal skill families and the underlying cognitive capabilities needed for inclusion in the digital economy. We call the resulting taxonomy ‘New Skills Now,’ and the six skills families that underpin it are: Learn to Earn, Build Tech Know-How, Apply We’Q, Create and Solve, Cultivate a Growth Mindset and Specialise for Work (Figure 8).

Figure 8: The New Skills Now Taxonomy, Accenture

RESPONSIVE, RESPONSIBLE AND RESPONSE-ABLED LEADERSHIP IS CRUCIAL

If our challenge is securing economic growth for South Africans through the provision of access to, and participation in the economy without compromisingglobal competitiveness and the productivity that comes from digital technologies, multi-stakeholder leadership and collaboration is our collective crisis.

To avoid any stakeholder feeling coerced into investing into longer-term shared economic growth while
potentially compromising short-term efficiency gains, a new model of co-operation is needed. Such a model will
involve multiple ecosystem stakeholders and will shift the current paradigm from doing well or doing good to doing well and doing good.

A clear collaborative multi-stakeholder approach is needed.

Government

Government needs to be at the forefront of creating opportunities for its citizens to access digital technologies
across areas such as infrastructure, connectivity, skills, incentives, policy frameworks and regulation. It must also set policy to regulate action across areas where the digital revolution is likely to have the most impact. Key areas will include eCommerce, cybersecurity, digital healthcare, the creation of a digital society (e.g., regulate more stringently the cost of data, which is in enabler), driving the acquisition of digital skills, and service provision.

South Africa talked about The Social Plan14 in the late nineties and early 2000s when retrenchments were rife.
Attempts to implement it were not very successful. Today an opportunity exists to revisit the concept of a Social
Plan and re-design it to take advantage of technology advances, as well as expand it to reach across more than one generation in a family or community.

Corporate South Africa

Large corporates have pivotal roles to play in attaining South Africa’s shared economic future. In addition to
preparing their organisations to take advantage of the benefits of digital technologies, businesses should also work at using technology to enhance growth beyond achieving efficiencies.
Corporates can allay fears of job losses by committing to:

  • Creating job alternatives through reskilling initiatives
  • Communicating transparently and honestly and engaging with employees and other stakeholders
  • Taking all impacted parties along on the journey
Organised Labour

Organised labour needs to accept that digital technologies bring the potential for economic growth and global
competitiveness. The course of the digital revolution cannot be changed but it can be smartly managed.

The United Association of South Africa (UASA) talks about South Africa’s future workforce needing to align its skillset to keep pace with developments. Organised labour plays an important role in preparing the next generation of workers to contribute meaningfully to inclusive growth and economic transformation.

Institutions of Learning

Institutions of learning have to pivot too.

According to Edgar Morin, the French philosopher and sociologist15, we need new systems of learning for both what and how we learn across organisations, governments, non-governmental organisations and institutions of
research and education. Morin argues that the education of the future should be such that ‘we are better able to
grasp realities and problems which are ever more global, transversal, polydisciplinary and planetary’.

Prof. Tshilidzi Marwala, Vice-Chancellor and Principal of the University of Johannesburg talks about multidisciplinary education being the way to go in preparing for the workforce of the future. He states that we will need graduates who are innovative, internationally oriented and have strong problem solving capabilities. Scientists need to have soft skills and social science and humanities students will need to have technical skills.

Industry Associations

Industry associations need to lead the discussions, keep abreast of research, do
research of their own and continue to drive engagement and conversation on
matters of change.

CONCLUSION

Advances in technology have changed the nature of work since time immemorial. In the times of the first Industrial Revolution, things got worse before they got better. In Britain, the Luddites, a group of skilled artisans (textile workers and weavers) destroyed machinery in textile mills as a form of protest against machines taking their jobs. Out of that era came secondary and tertiary education, the minimum wage, bans on child labour and major public health advances, from vaccinations to sanitation. It was both the best of times and the worst of times as Dickens wrote. It’s time to change again.

The adjustments we require in this era will be equally large and will additionally require both economic focus and political attention. We’ve seen the harsh beginnings of this in the United States, with Brexit in Europe, with the ‘Arab Spring’ and, in South Africa, with Marikana and the “fees must fall” protests. Anger about inequality and social and economic exclusion is brewing under the surface.

While Luddites still live among us, we have to resolve the jobs debate in a way that does not impact our competitiveness. Keeping machines at bay would, as University of Oxford professor Luciano Floridi indicates, “damage technological innovation and fail to improve the human condition”.

This period of ‘maladjustment’, where new uses for labour are still somewhat illusory, is temporary.There are many questions. Will there be enough jobs to fill our time? Will working for money be replaced by working for meaning? In the future, will jobs be fewer and work weeks shorter, and will jobs be shared? The answers are already apparent. We will find new jobs. We will not only do things differently, we will do different things. New industries will emerge. But the future trajectory of countries will, by and large, be determined by how they ensure economic access for all to build a consumer class with the purchasing power to spend on the goods and services that businesses produce with the aid of machines.

 

 

Accenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations. Combining unmatched experience and specialised skills across more than 40 industries and all business functions—underpinned by the world’s largest delivery network—Accenture works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders. With more than 435,000 people serving clients in more than 120 countries, Accenture drives innovation to improve the way the world works and lives. Visit us at www.accenture.co.za
Powered by Blockchain: Realizing AI’s Full Potential

Powered by Blockchain: Realizing AI’s Full Potential

Blockchain’s ability to securely expand an AI implementation’s access to data across organizations will drive a whole new set of insights and value.

Artificial Intelligence (AI) could change the world more than any other advancement since the Industrial Revolution; fundamentally reinventing how businesses compete, grow, and succeed. However, each AI system, and each algorithm within, is dependent upon training and acting upon trustworthy data to which it has access; typically limited to the organization implementing it. Simultaneously, blockchain is redefining business processes and systems of record, enabling secure and confident access to shared data between organizations and increased trust and confidence in the data. Together, AI and blockchain will enable organizations to exceed their current boundaries and gain access to significant amounts of trapped value.

Blockchain: the perfect partner for AI data
As surely as steam powered the Industrial Revolution, the ample flow of accurate data will drive artificial intelligence systems.

Leading business innovators recognize data’s central role inharnessing AI’s value, though many feel constrained by the relatively meager flows of trusted information they can currently draw upon to feed their systems. That’s why the leading technology firms have invested billions to acquire data-focused companies and their capabilities. The power of AI depends on the access to, magnitude, and quality of the data it can process.

So, while AI redefines the systems of business engagement, blockchain is recalibrating the systems of record. Together, they will remap organizational boundaries, moving them from siloed verticals with complex processes to operate efficiently across horizontals, and, in the process, releasing large amounts of currently trapped value.

Meeting the challenge; capturing the opportunity

AI systems are dramatically changing the nature of services and experiences for consumers. The current phase of the scaled use of AI has focused on the value and services individual organizations can deliver to people. This “internal application focus” results from the natural commercial emphasis of individual businesses attempting to drive profit and growth. Companies usually start with what they can do and control and the data they store in their systems. Rarely can a single organization comprehensively meet a consumer’s holistic needs, and most current AI implementation efforts reflect that limitation.

Take the example of a family relocating to a new home; one of the most basic aspects of life. Basic, yes, but simple? Not really. A myriad of organizations will focus on that single objective, including banks, insurance companies, realtors, inspectors, movers, retail firms (purchases for the new house), new school systems, utility companies, postal systems, the department of motor vehicles, tax authorities, and more. Today, virtually none of these organizations share access to the same information, and consequently, the family’s data remains fragmented and perhaps  inaccurately replicated across different players. To sort things out, the family must message data back and forth with each organization. As all these entities begin to implement AI systems, they will focus mainly on their own data or information they have permission to access and that could limit AI’s effectiveness.

Now imagine a world where, through a blockchain-based system, every party involved in the move could see the data and information pertaining to the end-to-end relocation process with appropriate permissions granted by the stakeholders— in this instance, the family. Organizations could access just the data they need, and because the information reflects blockchain’s enhanced trust levels, parties no longer need to engage in messaging and reconciliation. As organizations widely implement these kinds of models, the possibilities for AI systems will grow significantly.

In this situation, AI could become a type of consumer advocate service. A family would “own” and control their data since they alone would have full access to it. As a result, they would act as the conduit to drive that data into an AI system, which then makes recommendations and optimizes the data for their benefit.

AI systems will evaluate and optimize the elements of the moving experience across the end-to-end process, making links and connections that simply can’t be done today without severely overtaxing current fragmented data sets. For instance, an AI system could potentially access data related to the operational data for a house, including its historical utility/energy use, its insurance claim history, maintenance schedule, weather data, and combine this with the family’s behavior patterns, including hobbies and entertainment options, and use this and other information to calculate an accurate home maintenance cost profile. It could then design a service and insurance plan custom-tailored to the family’s needs.

In the future, wider access to data across an ecosystem and the advances in automated business logic via smart contracts could enable new and greater access for AI machines to traverse business ecosystems and deliver more comprehensive solutions to customers.

 

AI’s promise: for starters, doubling today’s economic growth rates

Artificial intelligence could double annual economic growth rates in 2035, according to an analysis of 12 developed economies by Accenture Research. It will change the nature of work, creating new, human-led relationships with machines that should increase labor productivity by up to 40 percent. And that’s just the beginning.

By helping people work smarter, AI could boost average profitability by as much as 38 percent, producing a bounty of up to US$14 trillion across 16 industries by 2035. The information and communication industry alone could deliver an extra US$4.7 trillion in gross value added in that year.

Combining multiple technologies in unique ways, artificial intelligence enables leaders to harness new entrepreneurial savvy that can rapidly sense and comprehend opportunities or threats, act on that information, and ultimately learn from the experience.

Use cases: blockchain makes AI better—faster
The combination of AI and blockchain is fueling the onset of the “Fourth Industrial Revolution“ by reinventing economics and information exchange.

As the following examples demonstrate, from healthcare to government and beyond, the potent combination of AI and blockchain is slowly but surely transforming industries and institutions worldwide.

1 Smart energy, smart buildings

Green-friendly AI and blockchain solutions can help reduce energy waste and optimize energy trading. For example, an AI system with access to a host of city-wide data sources through blockchain could be used to maintain a building, such as overseeing energy use by considering factors like the presence and number of residents, seasons, and even traffic information. To supply the energy, distributed blockchain technology will
ensure transparent and cost-effective transactions between producers and consumers, while machine learning algorithms that can hone in on transactions to estimate pricing. What’s more, blockchain combined with AI could significantly expeditereal estate-related transaction processes, which can otherwise go through too many channels before a contract is approved.

2 Public science
The “file-drawer problem” in academia occurs when researchers don’t publish “non-result” experiments. Because no record of them exists, duplicate experiments and a lack of knowledge follow, trampling scientific discourse. To resolve this problem, research institutions could store and access an index to academic research, making this experimental data available across the ecosystem. By adding data analytics to the combined data, scientists would have a much richer data set to pull from than would be feasible within a single institution. Then they could begin to identify elements and patterns, such as how many times teams have tried the same experiment or determine the probable outcome of a certain experiment, with greater certainty.

Hossein Kakavand, CEO of Luther Systems, asserts that AI will also play a bigger role in public science once “smart contracts” transacted using blockchain technology require smarter “nodes” that function semi autonomously. Smart contract simulate contractual agreements and can have wide-ranging applications—in public science and elsewhere—when academicsembrace the blockchain for knowledge transfer.

3 Supply Chain

The advancement of free trade has created increasingly complex global value chains. As goods move across production and supply networks, they cross through multiple jurisdictions, connect both advanced and emerging economies, involve multiple players and are subject to different laws and standards. This all requires a great deal of coordination, which not only adds to the complexity, it adds to the costs of these goods. The Global Alliance for Trade Facilitation, for example, estimates that roughly seven percent of the global value of trade is absorbed in documentation costs alone.

Blockchain-based digital identity promises to make the supply chain leaner, simpler, and more cost-effective. Digital identity for all actors, goods, and places in a supply chain, establishes provenance and a means of trackability throughout all touchpoints in the supply chain. Through creating digital representations of real-world assets, and tracking the relevant data of those assets as a single, shared source of information, major efficiencies and product improvements can be realized. Rather than valuable data being collected in siloes across myriad stakeholders, including manufacturer, distributor, wholesaler and retailer, data could be shared across relevant stakeholders.

Through adding artificial intelligence to the platform, that data can be fed through a variety of algorithms to improve the supply chain further. Consider the 3 A’s progression of AI, as it evolves from being an assistant to an advisor to an agent, applied to a shipment of apples. As an assistant, the AI can enhance accessing the data through a chatbot interface – one can ask and receive answers to specific questions like ‘Where are the apples now?’ or ‘What temperature are they being stored?’ As the technology and application becomes more sophisticated, the AI can be an advisor and proactively alert the employee of potential issues. If the AI has detected a high likelihood of storms, it can advise rerouting the shipping freight or if the weather is projected to spike, it can recommend additional cooling. And as the AI learns and demonstrates a high level of aptitude, it can become an agent by acting upon its recommendations, rerouting or adjusting the temperature itself.

4 Smart Devices 

As the Internet of Things progresses and our lives are integrated with smart devices, a combination of blockchain
and AI will be used to decide how these devices act, interact, and transact. Sensors will be widely prevalent to
learn and ingest real world information, with AI used to train and improve the devices understanding and actions made from the data. When a refrigerator is out of milk and needs to communicate to a corresponding device its desire to purchase milk, a blockchain platform will facilitate this interaction. And just as consumers today use reviews on websites to evaluate the quality and trustworthiness of a site, AI will be able to look through each device’s history of transactions (hosted and secured on the blockchain) to determine which devices to trust, and even characteristics such as which agent most often delivers the milk quickest.

5 Identity

Accenture is a founding member of the ID2020 Alliance, a UN-affiliated public/private partnership committed to applying the latest in innovative technologies to provide verifiable digital identities to the 1.1 billion individuals that currently cannot prove who they are with any certainty. This and similar applications of blockchain technology for identity can be combined with AI to monitor the environmental conditions in a refugee camp or community health information and produce insights to guide care and support. As AI can more quickly digest and analyze this data, more accurate and timely decisions can be made to support the at-risk groups.

6 Healthcare

In healthcare, AI is revolutionizing diagnosis and treatment planning at scale. Early progress has been made with AI systems to improve cancer treatments, as well as Google’s DeepMind building capabilities to diagnose eye diseases through analyzing medical images. Smart, personalized medicine can improve health outcomes, but people are wary about sharing such personal data. For a standard hospital visit, data is likely collected by the primary care physician, the hospital, and labs where tests are processed, and that data could be lost, entered incorrectly, or be subject to hacking. By enabling secure and controlled shared access to health data through blockchain systems, patients can reclaim ownership of their data and allow access to it on a case-by-case basis. This would allow patients to benefit from AI-enabled personal care, while knowing their data is protected and encrypted.

Blockchain: redefining trust

Blockchain is a new type of database system that maintains and records data so that multiple stakeholders can confidently and securely share access to the same data and information. As such, it is changing the nature of boundaries between organizations.

Since the invention of modern databases in the 1950s, thegoverning business model concerning them has centered on trust. For example, Party A needs to have confidence that Party B (or anyone else) hasn’t unilaterally changed any data. Consequently, companies traditionally build data systems they can fully control and operate using a “messaging” based business model. In this case, Party A sends its view of the world in a “message” to Party B, and vice versa. Only when both parties can reconcile those views will they complete the business transaction. Blockchain is changing that concept of trust in data.

Through blockchain and other types of Distributed LedgerTechnologies (DLT), companies can now access a common shared data set that they and other stakeholders know they can trust.This new definition of trust emerges from several key blockchain concepts:

Provenance: Each participant with appropriate access can view the full history of a data element—from its inception through each stage of its lifecycle—including who introduced it to the system, all pertinent events and the key parties involved.

Tamper-evident: Thanks to sophisticated math and software rules, data is extremely difficult to manipulate without everyone knowing. As a result, participants can prove to themselves that the data has not been tampered with.

Control: Participants have the ability to specify access permissions at a data element level vs. to a traditional database, data table, or row level; allowing a significant increase granularity of control.

Security: Protection and control can be implemented at the data element level instead of the database or data table levels, making it much more difficult to penetrate.

Successfully melding AI and blockchain

Two new digital technologies could create synergies unlike anything the business world has ever seen, but tapping into that power could be challenging.

Companies that recognize the power of this combination will have to manage coordinated technology implementations and more complex transformations. To navigate the challenges ahead, leaders will need to think through several key decisions.

Dealing with privacy issues. AI thrives on oceans of data, and blockchain can expand that access and ensure information’s trustworthiness, but privacy concerns could scuttle initiatives before they’re even launched. For example, one experiment focused on AI and blockchain technologies has already created controversy by using patient data without consent. What’s more, the EU’s data privacy rules, which took effect in 2018, threaten
massive fines for organizations that violate them. Working with regulators and governments to demonstrate the value AI-plus-blockchain can deliver to individuals and society at large should be a mandate.

Thinking outside of the (corporate) box. AI needs comprehensive levels of data to function optimally, but most companies restrict the amount of information available due to trust issues. While blockchain offers a way to enhance trust and security, enabling shared access to data and securing this information appropriately require significant amounts of effort and resources. That puts a premium on understanding the value at stake in AI plays and creating a workable strategy to obtain it. Two new digital technologies could create synergies unlike anything the business world has ever seen, but tapping into that power could be challenging.

Preparing for a mega-mindset shift. Most leading companies are already hard at work digitalizing their organizations, introducing things like cloud concepts and big data analytics. This “stretching” of formerly static processes, policies and procedures can certainly help prepare organizations for the transition to human-led AI, but to achieve its fullest potential, companies must investigate and plan how to integrate it and blockchain effectively and embed these technologies into your overall corporate strategy to “pivot to the new”.

Pivoting to the new is a way of framing the digital age that demands companies exist in a constant state of change. That means a new approach to organizational change that enables companies to:

  1. Transform the core business to drive up investment capacity
  2. Grow the core business to sustain the fuel for growth
  3. Scale new business to identity and scale growth areas at pace

It’s a deliberate approach that can yield big results.

Conclusion

Blockchain helps deliver upon the promise of AI by providing new levels of data access, trust, and security.
Several organizations are already experimenting with this combination of technologies, but initiatives largely remain in the pioneering mode. As confidence increases and companies zero in on trapped value pools, the growth of AI-plus-blockchain plays will likely explode. In this environment, leaders need to stake an early claim to the talent, resources and capabilities their companies will need to succeed in this fast-moving new business world.

 

 

Accenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations. Combining unmatched experience and specialized skills across more than 40 industries and all business functions—underpinned by the world’s largest delivery network—Accenture works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders. With 449,000 people serving clients in more than 120 countries, Accenture drives innovation to improve the way the world works and lives. Visit us at www.accenture.com
Tackling Climate Change Using 4IR Technology

Tackling Climate Change Using 4IR Technology

By Matjie Lillian Maboya

 

The recent tornado in KwaZulu Natal and the 2012-2018 drought in Cape Town are just some of the natural disasters that have made it to mainstream media, showing that climate change is undeniable. The impacts of climate change have been felt worldwide and there have been multiple climate strikes and provocative talks by the likes of Greta Thunberg that bring to light just how little progress we are currently making to combat it. Parallel to this raging stream has been the advent of the fourth industrial revolution (4IR) which has gained momentum and carries the immense potential to transform our lives and amplify our efforts to address climate change. There are already multitudes of people using advanced technology to galvanise people to act on the ground in making the planet greener such as Mr Beast who launched a sophisticated tree planting campaign that saw more than 20 million trees planted worldwide. Indeed, the possibilities arising from the confluence of climate change and 4IR are plentiful, and so are the potential setbacks in addressing socioeconomic inequality.

The sheer power of tools brought by the 4IR such as big data and greater computing power enables us to integrate different forms of data that previously seemed irrelevant or disconnected. For example, in our attempts to reduce plastic waste that has a negative impact on the environment, we can draw data from plastic bag manufacturing companies, grocery stores that sell plastic bags and plastic recycling centres to understand consumer behaviour on the life cycle of a plastic bag. Processing such data on one platform can enable us to pick up trends about the location and frequency with which a consumer buys plastic bags and when we can potentially send him/her/them a timely reminder to take reusable bags from home on a day they are most likely to go grocery shopping such as on their payday. Combining existing climate data with greater computing power and statistical analysis enables us to draw nuances through the wide range of data sources such as in this example, making it possible to serve consumers better and also engage them in tangible ways to mitigate and adapt to climate change.

Similarly, the technology can be used to hold manufacturers to account and to also wring them into tangible actions to protect the environment. While the 4IR will transform our lives in many ways, some still will remain the same for a long time. For example, while the manufacturing of electric automobiles is on the rise, the cars continue to use rubber tyres which are often not recycled or properly disposed of. The use of 4IR technology such as the internet of things can allow for car manufacturers to add microchips to track the tyres so they can be located and collected when they reach the end of their usability period. Such measures will help to reduce pollution and conserve energy through recycling.

But, 4IR technologies are not the saving grace for all climate-related issues. While they allow for advanced disaster management systems through real-time tracking of weather systems, there are limitations. For example,  IBM has recently launched faster weather forecast systems that cover the globe and has thus been a leader in this endeavour. However, in cities that are under resourced even with these warnings, the city might not have adequate resources to evacuate people in time. Unfortunately, most of our cities are not built to withstand climate change-related disasters. Flooding events are one such example that highlights areas with poor drainage and although 4IR can give us early warnings about storms, there is still significant work to be done on a municipal infrastructure development level to build and maintain drainage systems that are more resilient to water-related disasters.

For example, “Greenhouse gas emissions” and “artificial intelligence” can hardly be translated into most South African languages. This already limits the potential for more people to get involved with shaping the conversations and shifting the necessary levers to spearhead change in both fields. Moreover, technologies such as cloud computing, 3D/4D printing and machine learning all require electrical and computing infrastructure which most of the world still does not have access to. This means that the 4IR directly benefits those who are privileged enough to access these resources, leaving behind masses of those who cannot access them. Similarly, knowledge of climate change and its negative impacts are split along socio-economic lines whereby; those in low-income groups are hardest hit by environmental depletion and natural disasters, while wealthier individuals are more knowledgeable and better capacitated to adapt to climate change. 4IR technology can be a way to bridge this knowledge gap through the deployment of technology that can run faster dissemination of bite-sized information packets about each climate-related disaster in a more affordable manner than mainstream media. It starts with the small decisions such as, who gets to sit on the panels about 4IR and climate change, to the nature of the end-user for which these technologies are designed to serve. Advanced robotics and machine learning will ultimately take in the biases of the people who design them. If these people are not the world’s majority, then we will continue to build a world based on ‘the exception’ while passing it as the ‘norm’.

 

Build Pervasive Cyber Resilience Now – Securing South Africa’s Future Enterprise Today

Build Pervasive Cyber Resilience Now – Securing South Africa’s Future Enterprise Today

Securing South Africa’s Future Enterprise Today
WHEN EVERYTHING IS DIGITAL, EVERYTHING IS AT RISK

 

Around the world, companies are betting on a wholesale shift to tech-enabled business and operating models that promise to deliver bottom-line savings and top-line growth.

The connected, intelligent, and autonomous enterprise also comes with additional cyber risk. All that sensitive data, connectivity, and automation multiply the opportunities for hackers by expanding the “surface area” exposed to cyber attack. And, because digital systems are so embedded in daily operations, the potential damage from even a single security incident is magnified.

The threat is so significant that if cybercrime was a nation, it would be the 27th biggest in terms of GDP, and cost the global economy close to $450 billion a year. In South Africa, the threat of cybercrime is frightening. Consider this:

  • South Africa reportedly has the third-highest number of cybercrime victims worldwide, losing over R2 billion a year to cyber attacks—the worst in Africa.
  • 70 percent of South Africans have fallen victim to cybercrime and other risky behaviour, compared to 50 percent globally.
  • 47 percent of South African smartphone users have experienced mobile cybercrime in the past 12 months, compared to 38 percent globally.

We have seen the massive impact that data leaks from unsecure websites can have on major organisations and how easily insurers can fall victim to cybercrime. And let’s not forget the infamous WikiLeaks group that hacked into South African banks and released the uncensored Competition Commission report in 2009.

South African businesses today are not only challenged by a fragile socio-political environment, they’re also starting to fall prey to sophisticated attacks that can cripple them. Often, the reputational damage alone—including waning customer loyalty—can impose significant indirect costs on the enterprise.

In a recent Accenture survey of over 1,400 C-suite executives from around the world, including more than a hundred from South Africa, respondents agreed that new technologies would raise cyber risk. Nearly 90 percent of executives in South Africa have adopted or plan to adopt technologies such as cloud and the Internet of Things (IoT). Seventy-four percent of executives agreed or strongly agreed that cyber risks will grow substantially in the next few years as a result of business becoming more connected, intelligent and autonomous.

CONNECTED

ALWAYS ON, ALWAYS VULNERABLE 

The future business relies on 24/7 connectivity to carry out internal processes, work with partners, and reach customers. Companies are linked electronically across value chains and supply chains with a growing universe of suppliers, partners, distributors, customers, and other external parties—increasingly over wireless networks and over long distances. In addition, with the rise of the Internet of Things, companies are also using digital connections to retrieve data and manage equipment in the physical world.

In the global survey, 77 percent of respondents cited the IoT as the technology that will increase cyber risk moderately or significantly. In South Africa, even more respondents—85 percent—cited the IoT as a potential source of cyber risk. Companies are installing IoT technology to control factory machines and manage physical environments—for example, turning off the lights and heat in a meeting room when sensors detect that it is unoccupied. The IoT is also being used extensively in supply chains to increase operational efficiencies, manage and track assets and monitor vital processes.

Cloud computing—using remote computing and storage facilities and services— was cited by 70 percent of respondents as posing a growing risk. Increasingly, companies rely on cloud setups to gain greater flexibility in IT operations and to access specialised services, such as AI analysis. Cloud computing is also used behind the scenes in many smartphone apps to do the data crunching that a phone can’t do, creating another potential vulnerability in the Bring Your Own Device (BYOD) or virtual work environment, which was cited by 67 percent of companies in South Africa as another potential cyber risk.

Top executives in South Africa are also highly concerned about the potential dangers of sharing data with third parties. In our survey, nearly 60 percent of respondents said they expect data exchanges with strategic partners and other third parties to raise cyber risk, and 90 percent of C-suite leaders anticipate that the number of third parties and strategic partners in their ecosystems will increase in the next three years.

Companies also expect to make and sell many more connected consumer devices— everything from connected cars and “smart” appliances to wearable health monitors and even Internet-enabled pacemakers. These products introduce potentially catastrophic cyber risks—expanding the risk from monetary and reputational loss
to possible loss of life and physical disruptions. Nearly 90 percent of South African executives recognise that smart products and connected devices would raise cyber risks for their companies.

INTELLIGENT 

MORE DATA BRINGS MORE RISK TO PRIVACY AND IP

Intelligent systems use a combination of advanced technologies, such as artificial intelligence (AI), and large data sets to take on tasks once performed by humans, and to do things that humans cannot easily do—like finding hidden patterns in massive files of social media data that point to changes in consumer preferences.

Using AI and machine learning, companies can extract ideas for new ways to boost sales—a tweak in pricing, a design refresh, or a custom offer for specific shoppers. Behind the scenes, intelligent systems enable continuous improvement in operations—for example, optimising how production machinery is used or raising customer satisfaction in the call centre by analysing performance data.

Executives from companies represented in our survey are well aware of the risks that they are assuming with the wider use of intelligent technologies. More than 85 percent of South African executives cited cybersecurity concerns regarding AI, making it the riskiest new technology in their view. The same AI technology that enables banks to create sophisticated profiles of individual consumers to customise loan offers can also be used by hackers to track consumers’ online activity to steal account passwords.

Given the intersection of AI, machine learning and big data within businesses, companies will need to address both security and privacy risks. Protecting larger amounts and new kinds of sensitive data is a major concern for executives. Three quarters of respondents in South Africa, the same number as global respondents, said they believe that storing business-critical information, such as corporate strategy, trade secrets, and intellectual property (IP) on their systems will increase cyber risk; 65 percent have similar concerns about the risks they face in trying to protect sensitive customer data.

AUTONOMOUS

SELF-DIRECTING SYSTEMS ALWAYS NEED PROTECTION

In the future business, a good deal of work is done autonomously. The most obvious form of autonomy is robotics—the cognitive systems used to perform difficult, repetitive, or dangerous tasks in production processes. Nearly 60 percent of respondents in South Africa say that robotics will be a growing source of cyber risk. As was the case with IT systems, security was an afterthought in the creation of robots. But unlike a computer system, a powerful self-directed robot that is hacked could put employees in grave danger.

Autonomous machines are spreading rapidly beyond the factory. Flying drones are being dispatched to inspect power lines and refinery pipes. In the back office, robotic process automation (RPA) is being introduced to standardise and streamline a wide range of business processes. Often, this involves autonomous machine-to-machine communication, such as automatically generating an order in a supplier’s computer when the procurement system signals that inventory is running low.

Businesses also rely on application programming interfaces (APIs), which two thirds of South African respondents say will increase cyber risk. Open APIs used in platform-based business models, such as the Apple app store or the Alibaba eCommerce platform, enable third-party developers to interact with the company’s systems and data to design their own applications—such as iPhone games or AliExpress shopping apps.

A less obvious form of autonomy involves employee activity. Increasingly, companies are using virtual work arrangements for contractors or employees who work remotely, often using their own devices. These “mobile workers” interact with company systems and data over public networks, raising cyber risk. In South Africa, 62 percent of respondents said that remote work arrangements would create additional cyber risk, only slightly less than the two-thirds of respondents in the global sample.

TODAY’S SECURITY STRATEGIES ARE NOT WINNING -THE LAST WAR

The future is arriving before companies have developed a broad perspective on the cyber risks, responses, and remediation plans that are required in the new business environment. Today’s security approach will not be enough to win tomorrow’s battles. The connected, intelligent, autonomous business needs pervasive cyber resilience— with proven methods for keeping cyber attacks from crippling the business and security baked into everything the organisation does. Security expertise must be dispatched to the front lines and security must be embedded not only in IT, but in product design, business processes, and the daily work of employees as well.

Closing the gap between risk and protection 

There is a growing gap between the risks that companies are assuming and their cybersecurity posture or strength. Companies are not hesitating to race ahead with investments in new tech-enabled ways of doing business, often in response to competitors and “disruptors” in their markets. But there is a disparity between what C-suite executives say are the emerging areas of concern and the cybersecurity strategies employed.
For example, while companies say that the growing volume of data exchanged with third parties is a risk, few companies attempt to ensure data integrity beyond their own operations. Forty-one percent of companies in South Africa rely on the protocols of the third parties or simply trust third parties to protect information that they share.

Figure 1

THERE’S A WIDE GAP BETWEEN RISK AND PROTECTION 

There is a consistent pattern of gaps between awareness of growing risks and the protection afforded by current cybersecurity strategies 

As Figure 1 illustrates, our survey data exposes a consistent pattern of gaps between awareness of growing risks and the protection afforded by current cybersecurity strategies. For example, 64 percent of respondents in South Africa say that open APIs will raise cyber risk, but only 20 percent said that open API technology is protected by their cybersecurity strategy—indicating a wide gap of 44 percent between awareness of risks and their protection. In South Africa, wide gaps are also found in smart products and customer data, and the BYOD/virtual work environment.

To close the gap between current capabilities and future cyber resilience needs, companies must update the way they plan and execute cybersecurity. Companies today are waging war with outdated, backward-looking battle plans. For example, 92 percent of companies in South Africa base their cybersecurity investments solely on today’s known risks and cybersecurity needs, and do not consider future business needs in the investment plan.

In general, companies are not governed, organised, and managed to deal with the pervasive risks of the future business. Responsibility for security is left largely to the chief information security officer (CISO) and the cybersecurity team, and it’s not surprising to learn that half of CISOs feel their responsibilities for securing the
organisation are growing faster than their ability to address them. Business-unit leaders are rarely asked to build security into product designs or other offerings—or held accountable for cybersecurity.

While most companies have hired a CISO or assigned cybersecurity to a C-suite executive, such as a CIO, these leaders often have limited impact beyond the security organisation. Nearly half of respondents in South Africa say the CISO is brought into discussions only after a new business opportunity has been agreed by top
management, for example.

Companies are doing little to spread security knowledge among employees and to create a “security-first” culture that will support pervasive cyber resilience. Only 29 percent of CISOs in South Africa—fewer than the low 40 percent at global level—said establishing or expanding an insider threat programme is a high priority.

HOW TO PROTECT THE FUTURE

To make the future business cyber resilient, companies must prepare for the risks that come with new business models and technologies, such as artificial intelligence and machine learning. Many C-suite respondents in our survey expect cybersecurity risks to diminish substantially in the next few years, thanks to new cybersecurity technologies.

But new technologies alone will not do the job. To build the pervasive cyber resilience needed for the intelligent enterprise to grow safely, companies need to embed security into everything that they do. Companies must instill a “security-first” mindset—connecting security to the business, making security everybody’s job, and extending protection beyond the boundaries of the enterprise.

Companies can start by developing a coherent cyber strategy and investment plan that focuses on the key issues of data governance and protection. They will need to disperse security expertise and accountability across the organisation, educate the workforce and customers, and work with strategic partners, third parties, and industry alliances.

We identify five ways to start building pervasive cyber resilience:

1 Make the business leader a trusted security partner

Today, cybersecurity tends to be highly centralised. Just 19 percent of companies in South Africa make business-unit leaders accountable for cybersecurity, even though business units are developing their own data-driven processes and conducting business online without involving the CISO at times. Business leaders should be held accountable for the security of their products, services, and operations—and be given incentives to embrace cybersecurity.

To disperse expertise, companies can create new security roles within business units to help with product design or protections for consumer data, for example. General Electric is one company that has created CISOs for region and business units. A primary goal for these frontline CISOs is to weave security into the product life cycle, ensuring that GE’s products are secure and the people and organisations using them are protected.

2 Make the security leader a trusted business enabler 

Many companies have hired CISOs or other C-level executives to take charge of cybersecurity. But few security chiefs exert influence across the organisation. This is owing to many factors, including a lack of understanding of cyber risks among business executives, and sometimes, a failure by CISOs to take the initiative to collaborate. Only 34 percent of South African companies surveyed said that their CISO and business leaders collaborate on a cybersecurity plan and budget.

Security must be in the room when strategy is being decided and options are being weighed. Over 80 percent of executives in South Africa agree that the CISO will need a seat at the table when discussions about strategy, new businesses, and new technology adoption are taking place among business leaders. AT&T’s Security Advisory Council, for example, is a forum that brings security and business leaders together to address strategy and security priorities.

While CISOs and other security professionals are doing a good job defending companies against well-established threats, new roles and skills are needed to implement pervasive cyber resilience. One approach that reflects the wide-ranging needs of the future business is the creation of a “Chief Digital Trust, Security, and Resilience Officer” who can oversee security in the broadest possible context and serve as a bridge between security and business units, as well as with the CEO and board.

3 Make employees part of the solution

Cybersecurity experts polled by Accenture say that, after outside attacks, they are most worried about accidental or intentional acts by employees that compromise security, such as publishing confidential data or sharing a password with a hacker. Few companies, however, have placed a high priority on engaging employees in the cybersecurity effort. Despite their concerns about employees’ role in breaches, only 52 percent of companies in South Africa said all employees receive cybersecurity training upon joining the organisation and then receive regular updates throughout their employment.

Companies should make sure all employees are trained in the basics and given the tools to identify possible threats and assist in fashioning protections. For example, all Cisco employees go through the “Security Ninja” training programme, in which employees who master the basics earn a white belt certification. Software developers, engineers, and managers at Cisco can earn more rigorous green, brown, or black belt certification with modules customised to their roles, which focus on building products and services in a secure way.

Training and reinforcement can reduce the risk of employees accidentally helping cyber criminals. To catch employees who are actively pursuing or abetting cybercrime, companies can monitor employees, in addition to using standard data protection techniques. User and entity behaviour analytics (UEBA) systems, for example, can flag suspicious employee activity, such as unusual file transfers that could indicate criminal intent.

To enact an effective insider threat programme, the CEO must rally human resources, learning and development, legal and IT teams to work closely with the security office and business units.

4 Be an advocate for customer protection 

Digital trust and privacy are becoming major factors for consumers in their purchase decisions. Consumers are now alert to the privacy cost of using social media, consuming free content, and shopping online. Companies in our survey say that managing customer requirements for data protection is the second most urgent priority for their cybersecurity investments, just after their top priority of preventing high-profile incidents.

Companies must make security a top priority in the design and development of connected products and services. Companies must also assure their customers that their data is not going to be abused and educate customers about data protection, going beyond regulatory compliance to build trust. Consider Danske Bank’s “Keep It Safe” programme, which helps customers learn how to protect their data. The programme provides advice on simple everyday routines and procedures that can protect consumer data and gives customers a way to test their computer security. The bank uses humour and a friendly communication style to make the material more accessible to consumers. Companies that make the effort to educate customers about how to protect themselves and are transparent about what they do with customer data will be rewarded. Turning this into companywide practice will take a clear mandate from the top.

5 Think beyond your enterprise to ecosystem.
The future enterprise might conduct business electronically with hundreds or even thousands of suppliers and partners around the world, each of which can expose the company to a cyber attack. Companies need to work with these ecosystem partners to jointly protect their organisations.

Companies should work with partners to establish mutually-accepted rules (which can be backed up in contracts) for protecting the data they share. Companies should also participate in the standards efforts that are underway in most industries and work across industries to share cybersecurity knowledge and services.

BT, for example, shares threat information with other large telecommunications companies such as Orange and Verizon, as well as with national security agencies. The progress on information sharing is also an opportunity to shape participation in standards organizations. In our survey, 51 percent of CISOs in South Africa said they are contributing to creating a cybersecurity standard for their industry. Over 80 percent of respondents said that they expect to collaborate with companies in different industries in the next three years to improve cyber resilience.

REFERENCES

  1. http://rickcrouch.co.za/wp/cyber-crime-and-south-africa/
  2. SABRIC: https://www.iol.co.za/mercury/sa-has-the-thirdhighest-number-of-cyber-crime-victims-worldwide 15608267
  3. Norton: https://www.scidev.net/sub-saharan-africa/icts/ feature/cybercrime-africa-facts-figures.html
  4. http://rickcrouch.co.za/wp/cyber-crime-and-south-africa/

 

Accenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations. Combining unmatched experience and specialized skills across more than 40 industries and all business functions – underpinned by the world’s largest delivery network – Accenture works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders. With 459,000 people serving clients in more than 120 countries, Accenture drives innovation to improve the way the world works and lives. Visit us at www.accenture.com.
Pivoting With AI – How Embracing Artificial Intelligence As An Emerging Business Accelerator Can Drive Economic Growth

Pivoting With AI – How Embracing Artificial Intelligence As An Emerging Business Accelerator Can Drive Economic Growth

ARTIFICIAL INTELLIGENCE –A GAME CHANGER FOR SOUTH AFRICA?

In South Africa, where economic growth has been stagnant and digital adoption is accelerating but still lags global trends, the imperative to transform is urgent. Artificial Intelligence (AI), as a key component of a digital business environment and as an enabler of industry-disrupting advances, is a game-changer that deserves attention.

Organisations that are able to leverage technologies like AI to reshape our world will have the opportunity to weave themselves into a new digital society. For economies that adopt AI, a future of increased annual growth rates awaits, a future in which quantum computing’s near-unlimited processing and algorithmic power can solve difficult problems in entirely new ways across multiple industries.

WHAT IMPACT COULD AI HAVE IN SOUTH AFRICA?

South Africa is facing low economic growth. Unemployment is high, skills levels are low, and productivity and competitiveness are declining. There are multiple challenges specific to business and industry sectors that AI could help address.

In South Africa, the majority of organisations are dealing with legacy technologies, systems, business models and corporate structures, large core workforces and sunk investments in owned infrastructure.

Many businesses are just starting their digital journeys, addressing data quality and data management—fundamental building blocks for digitalisation of businesses—and coming to terms with the new business models,processes and skills needed to leverage the opportunities a digital world offers.

The addition of AI to process automation and to augment human capabilities can deliver huge value for businesses, driving efficiencies, productivity and innovation.Across key industry sectors, South Africa is facing a number of challenges. The contributions of the agriculture and manufacturing sectors to South Africa’s GDP are declining. And the growth prospects of the consumer goods industry, which is closely linked to the economic health of the country, is down. A lack of skills, insufficient and deteriorating infrastructure, a lack of access to information, and outdated regulatory policies are among the many issues impacting this decline.

How could AI help?

In the agricultural sector, the use of autonomous vehicles, drones and sensors will enable precision agriculture,
improving use of resources and increasing yields.

In the manufacturing sector, embedding intelligence throughout the value chain and in products can improve responsiveness to demand, and enable the introduction of many value-adding services.

To organisations in business and industry, AI may seem a long way off. It is not.

AI CAN DOUBLE SOUTH AFRICA’S ECONOMY

AI is emerging as new factor of production. South Africa can no longer depend on increases in capital and
labour to drive economic growth. Careful investment in AI can, however, transform the country’s economy. Accenture’s research quantifies the value,and pinpoints where and how AI can most readily deliver value in this country.

AI BOOSTS GVA ACROSS INDUSTRY SECTORS 

In 2017, Accenture’s research showed that AI has the potential to add up to an entire percentage point to annual economic growth rates in South Africa by 2035. This means that by embedding AI in the economy, South Africa could potentially double the size of its economy size five years earlier.

This alone is a compelling reason for the country to jump onto the AI bandwagon. In this paper, we drill down, showing the impact of AI on South Africa’s industriesand how each of these will benefit from AI. The numbers are significant.

Our research shows that Manufacturing, Agriculture and Wholesale and Retail, Accommodation and Food Services will benefit the most with use of AI boosting their annual gross value add (GVA) growth rates by 1.4, 1.2 and 1.1 percentage points, respectively, in 2035.

In absolute dollar terms, Public Services and Finance and Business Services will gain the most with additional boosts to their annual GVA of R308 billion and R252 billion, respectively, in 2035. The potential gross value add of AI-augmented growth for South Africa: R1,372 billion.

What will it take to succeed?

To successfully pursue an AI agenda in South Africa, policy makers and business leaders must prepare for, and work toward a future with artificial intelligence. To do this they must understand that AI is not simply another productivity enhancer; it is a tool that can transform our thinking about how growth is created.

WHAT IS ARTIFICIAL INTELLIGENCE?

AI is not a new field; much of its theoretical and technological underpinning was developed over the past 70 years by computer scientists such as Alan Turing, Marvin Minsky and John McCarthy.

Today, the term refers to multiple technologies that can be combined in different ways to:

SENSE

Computer vision and audio processing, for example,are able to actively perceive the world around them by acquiring and processing images, sound and speech. The use of facial recognition at border control kiosks is one practical example of how it can improve productivity.

COMPREHEND

Natural language processing and inference engines can enable AI systems to analyse and understand the information collected. This technology is used to power the language translation feature of search engine results.

ACT

An AI system can take action through technologies such as expert systems and inference engines, or undertake actions in the physical world. Auto-pilot features and assisted braking capabilities in cars are examples of this. 

All three capabilities are underpinned by the ability to learn from experience and adapt over time. AI already exists to some degree in many industries but the extent to which it is becoming part of our daily
lives is set to grow fast.

Two key factors are enabling AI growth:

1 Unlimited access to computing power

Public cloud computing was estimated to reach almost US$70 billion in 2015 worldwide. Data storage has also become abundant.

2 Growth in big data

Global data has seen a compound annual growth rate (CAGR) of more than 50 percent since 2010 as more of
the devices around us have become connected. As Barry Smyth, professor of computer science at University College Dublin, tells us: “Data is to AI what food is to humans.” So in a more digital world, the exponential growth of data is constantly feeding AI improvements.

AI IN SOUTH AFRICA – MOVE FORWARD

There is no doubt that AI will create a quantum change in every industry segment over the next decade. The opportunity for South Africa is not just to improve efficiencies, but use AI to close gaps and radically improve productivity of people and assets, spur innovation and increase competitiveness across sectors.

The time to move forward—at every level, from reskilling for an AI future todeveloping policies to drive adoption and ensure ethical use of AI—is now.

SOURCES

  1. ABA Journal, “How artificial intelligence is transforming the legal profession,” April 1, 2016
  2. Robotics Business Review, “Fetch Robotics,” 2015
  3. Finders, K., “IPsoft gives automation platform a face,” September 30, 2014.
  4. IPsoft, “Amelia: Mortgage broker agent at a global bank,” 2016.
  5. Ford, “Ford teams up with MIT and Stanford to advance automated driving research,” January 22, 2014
  6. Ventureburn, SA startup Aerobotics secures funding round from Nedbank VC fund,13 July, 2018
  7. United Arab Emirates Government, UAE Artificial Intelligence Strategy

For the full report please visit https://www.accenture.com/_acnmedia/pdf-85/accenture-pivoting-with-ai-pov.pdf.

 

Accenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations. Combining unmatched experience and specialized skills across more than 40 industries and all business functions – underpinned by the world’s largest delivery network – Accenture works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders. With 449,000 people serving clients in more than 120 countries, Accenture drives innovation to improve the way the world works and lives. Visit us at www.accenture.com.