South African companies display a willingness to embrace artificial intelligence (AI) and experiment using new technology, according to a new study, which found that the country is among the top three regional AI investors.

The ‘AI Maturity Report in South Africa’ shows that AI pilots and experimentation are now prolific across South African companies, with some 46% of local firms saying that they are already actively piloting AI technologies within their organisations.

The report, commissioned by Microsoft and conducted by EY, also found that 83% of the South African companies surveyed have AI strategy priorities at executive management level.

“Over half of South African companies expect AI to have a significant impact on their operations in the next five years, with 46% of companies expecting AI to impact new business to a very high degree,” the report outlines.

However, while 42% of South African businesses say AI is one of their digital priorities, not a single company indicated that it was its most important priority.

“In fact, there are a number of core competences South African companies feel they still need to address in terms of AI maturity,” says Microsoft MD Lillian Barnard, highlighting that, while data management scores well as a competence in South Africa, businesses typically rate themselves as only moderately competent when it comes to leadership capability.

“Combining AI with emotional intelligence is another significant challenge for South African companies, with many respondents citing concerns around human-machine interaction, and how AI outputs should be integrated with operational processes and the people involved in those processes.

“Many AI experts argue that it is not simply a lack of technical skills that slows the progress of AI but also a greater need for a culture of experimentation,” Barnard continues.

Though AI is in its early stages of development in South Africa, it bodes well for AI maturity in the country that businesses are actively experimenting with exciting new AI use cases.

At least 25% of South African companies consider themselves highly competent in their willingness to experiment with and learn about new technologies, compared with just 14% across the Middle East and Africa (MEA) region.

Businesses are experimenting with a range of different technologies, including chatbots, robotic process automation and advanced analytics.

Sixty-seven per cent of the South African organisations surveyed pinpointed machine learning as the AI technology most useful to them, followed by smart robotics and biometrics.

Meanwhile, together with the United Arab Emirates and Turkey, South Africa is one of three countries in the region with the highest AI investment activity in the last decade, investing about $1.6-billion overall in the past ten years into about 134 transactions, 31 of which were mergers and/or acquisitions.

Apart from social media and the Internet of Things, the other technologies, in terms of investment and number of transactions, are planning, scheduling, optimisation and smart mobile.

“When it comes to the future benefits of AI, companies across the MEA region are highly positive – and, perhaps, none more so than South African organisations – 96% of local businesses expect to gain significant financial benefits by using AI solutions to optimise their operations,” Barnard notes.

Automation (83%) and prediction (70%) dominated the top use cases for AI listed by companies.

The use cases listed include a broad range of applications, such as increasing employee productivity, predicting customer churn, consumer conversion rates and proactively managing machinery downtime.

The study is based on surveys, interviews and case studies from 112 companies across the MEA region.