Businesses face an increasingly complex global environment and massive technological shifts that come with significant risks and but also a gamut of opportunities. What are the risks and opportunities of emerging technologies for SA businesses?
According to the International Monetary Fund, the South African economy is expected to grow just one percent in 2024 and 1.3 percent in 2025. Unemployment is also above 32%, with youth unemployment even higher.
Those numbers are, without doubt, concerning. But if South Africa takes an approach which embraces the opportunities present in emerging technologies such as general artificial intelligence (AI) and innovations in renewable energy, then it could see a significant and rapid turnaround. To reap the rewards inherent in those opportunities, however, it’s also vital that businesses are aware of the risks that come with these technologies.
As we point out in our Global Risks Report 2024 published by the World Economic Forum, ensuring that the right balance is struck between risk and opportunity will require a combination of well-thought-out regulations, public awareness and education, and global treaties and agreements, among other things.
Spotting the opportunities
We know that forces such as AI and climate change will dramatically reshape the quality, quantity and distribution of job creation as well as job losses; driving divergent risks. For some economies and communities, isolated from job-creation and reskilling opportunities, these twin forces will encounter saturated labour markets, hindering development. In other regions, challenges to social and labour mobility could contribute to shortages in critical industries, slowing economic transformations and progress.
Both forces, however, also offer opportunities for job creation. It’s anticipated, for example, that AI and machine learning specialists will be the fastest-growing job categories in the coming years. By 2027, 40% or one million more specialists will be needed. The green transition, meanwhile, is expected to add more than 30 million jobs by 2030. In line with growth in renewables, the global construction sector is expected to be twice as large in 2030 as it was in 2020.
Mind the gaps
While South Africa is home to some of the best solar and wind resources in the world and the role of renewables is growing all the time, the emergence and demand for digital skills to propel this industry even further is becoming a challenge.
However, the green transition can turn these challenges into opportunities, but only if they have the available skills necessary to do so. Currently, there is a significant skills gap with digital skills in general, including the highly specialised ones required to take advantage of the AI revolution.
But these frontier technologies come with other risks too, including entrenching and deepening existing inequalities. That’s true not only of inequalities between countries but also within them.
The general concentration of frontier technologies in a few key markets could widen the digital divide between high- and low-income countries and therefore drive a stark disparity in the distribution of related benefits – and risks. Already vulnerable countries and communities risk being left further behind, digitally isolated from turbocharged breakthroughs impacting economic productivity, finance, climate, education and healthcare, as well as related job creation. That risk is only magnified by the fact, at present, many of these technologies are being driven by a small handful of companies.
Given South Africa is already on an unequal footing with many other countries and is also the most unequal country on the planet, it will be doubly important that it tackle those risks head-on. Doing so will require collaboration on the part of both the government and the private sector. These include regulation, education, and participation in networks of global agreements.
If businesses take an approach to emerging technologies which displays an understanding of the risks at hand, they will be much better placed to embrace the opportunities available. If they get that right, they can thrive while also ensuring that no one gets left behind.
