A recent report reveals that businesses in Sub-Saharan Africa are less likely to have integrated generative AI compared to their global counterparts.
Survey Findings: Adoption and Expectations
According to a report released on May 30th by PricewaterhouseCoopers (PwC), based on their “Global CEO Survey 2024,” only 27% of African CEOs surveyed stated that their companies have adopted generative AI, compared to a global average of 32%.
However, this adoption rate is expected to increase, with 51% of African leaders anticipating that generative AI will heighten competitive intensity in their industry over the next three years. They foresee new market entrants, innovative products, and novel pricing approaches.
Impact on Value Creation and Delivery
Furthermore, 61% of respondents believe that generative AI will significantly alter how their companies create, deliver, and capture value in the coming three years. 51% anticipate that this disruptive technology will enhance the quality of products and services offered to consumers.
In response to this transformative technology, 33% of African business leaders have already modified their technological transformation strategies, slightly exceeding the global average of 31%.
Revolutionizing Various Sectors
Generative AI is poised to revolutionize various sectors. In financial services, it promises improved fraud detection, enhanced risk assessment, and personalized customer interactions, leading to increased efficiency and cost reduction.
The healthcare sector is expected to benefit from AI-assisted early disease detection, personalized treatment planning, and new drug discovery.
Retailers are leveraging the technology for personalized product recommendations, price optimization, and improved customer service. Meanwhile, manufacturing and logistics sectors can utilize generative AI to optimize supply chains, forecast demand, and enhance production efficiency.
Increased Investments in Cloud Computing
The report, titled “Africa Business Agenda – Tech-enabled digital transformation,” reveals that African CEOs perceive significant risks associated with generative AI due to current limitations like hallucinations (incorrect or misleading results generated by large language models) and the lack of consistent logical reasoning.
48% acknowledge that generative AI can increase legal liabilities and reputational risk, compared to 46% globally. This highlights the need for robust data governance frameworks and employee involvement in the technology integration process.
Potential Workforce Reductions
Additionally, 21% of surveyed leaders anticipate workforce reductions due to the growing adoption of this technology, which is viewed with some apprehension by workers. This figure is slightly lower than the global average of 25%.
Cloud Computing Adoption Outpaces Generative AI
The report also indicates that cloud computing adoption among businesses operating in Sub-Saharan Africa surpasses that of generative AI. 12% of surveyed leaders have fully adopted cloud technology, while 38% have adopted it in many parts of their operations. 32% have adopted the cloud in some operations, and 19% have yet to utilize cloud solutions.
Given the benefits of cloud computing, 82% of respondents reported increasing their investments in this area in 2023.
Emerging Technologies and Future Viability
More broadly, over half of the African CEOs surveyed (52%) expect emerging technologies to significantly impact how their companies create, deliver, and capture value in the future, exceeding the global average of 46%.
The report notes that 40% of leaders believe their companies would not be economically viable within a decade if they maintain their current transformation trajectory. This figure rises to 57% over a horizon of more than ten years, underscoring the need to accelerate the reinvention of business models for companies operating in Sub-Saharan Africa.