CEOs in Southern Africa have identified generative AI, geopolitics and cybersecurity as the top three risks facing their organisations’ growth prospects – and said emerging technologies are becoming a key investment priority across the region.
The KPMG 2023 CEO Outlook Survey Southern Africa, compiled in partnership with Business Leadership South Africa (BLSA), draws on the perspectives of 60 CEOs from South Africa and six other countries in the Southern Africa region. It examines how CEOs are planning to tackle the complex set of emerging challenges in the region.
Despite economic challenges in Southern Africa, including high inflation, 71% of Southern Africa’s CEOs are making generative AI a top investment priority for their organisations. Its prominence has made it one of the top priorities to get right as a cutting-edge investment by CEOs – a finding in line with the 2023 KPMG Global CEO Outlook report, in which 70% of global CEOs expressed their intention to invest in emerging technologies.
“Artificial intelligence models have the potential to transform businesses and everyday life profoundly. Yet their applications, including the benefits and risks, are widely misunderstood,” said KPMG South Africa technology assurance partner Sipho Ndaba.
Although there is a willingness by businesses to adopt generative AI in the workplace, CEOs also expressed concerns. Some 33% believe the main challenge they will face will be securing the skills required for their employees to benefit from generative AI in their everyday work.
Interestingly, given technology advances through the rise of generative AI, 73% of CEOs in Southern Africa said they will prioritise spending on acquiring new technology, rather than the upskilling their workforces.
The ethics of emerging technology also remains an ongoing discussion in businesses, with 80% of Southern African CEOs agreeing that a lack of regulation dealing with generative AI may become a barrier in time.
Cybersecurity risk is an additional ongoing concern. Some 84% of Southern Africa’s CEOs agree that generative AI could be viewed as a double-edged sword – providing a high level of security and cyberattack detection, but potentially introducing an increased risk of new attack methods.
Some 16% of CEOs canvassed believe they do not have enough protection against cyber adversaries and have no option but to increase their spending in this area.
KMPG Southern Africa CEO Ignatius Sehoole said the region has significant long-term potential, with a growing human capital advantage and pockets of excellence in institutions and infrastructure. AI, he said, should not, however, be used to replace jobs – especially in a country like South Africa where unemployment is extremely high.
BLSA CEO Busi Mavuso said business confidence in South Africa remains stubbornly pessimistic. Our population now sits at 62 million, with 19 million citizens dependent on government grants at an annual cost of R200-billion to the fiscus. The provision of essential services remains a challenge, she said. Poverty and unemployment remain rife, increasing the fragility of the system and its susceptibility to the effects of global crises, she added.
Despite this, Southern African CEOs are more optimistic than their global peers, with 90% of respondents from the region indicating confidence in their companies’ growth prospects. – © 2023 NewsCentral Media