![[South Africa] Ninety percent of CEOs are waiting for GenAI to move past the hype, report](/assets/components/phpthumbof/cache/Artificial%20Intelligence%20logo.c606b9bb6ce76bc4754e64b672eefdc3.jpg)
[South Africa] Ninety percent of CEOs are waiting for GenAI to move past the hype, report
Generative AI (GenAI) exploded into the public consciousness in 2023, promising to transform the way business functions. Despite the potential, however, leaders are struggling to convert hype into reality. According to a new report by Boston Consulting Group (BCG), 66% of global executives are ambivalent or outright dissatisfied with their organisation’s progress on AI and GenAI so far, citing three primary reasons for their dissatisfaction: a lack of talent and skills (62%), an unclear AI and GenAI roadmap and investment priorities (47%), and absence of strategy regarding responsible AI and GenAI (42%).
“This is the year to turn GenAI’s promise into tangible business success,” said Christoph Schweizer, BCG’s CEO. “Almost every CEO, myself included, has experienced a steep learning curve with GenAI. When technology is changing so quickly, it can be tempting to wait and see where things land. But with GenAI, the early winners are experimenting, learning, and building at scale.”
The report, titled BCG AI Radar: From Potential to Profit with GenAI, is based on a survey of 1,406 C-level executives in 50 markets and 14 industries, including 69 executives from Africa. Seventy-one percent of global executives surveyed say they plan to increase tech investments in 2024—an 11-point jump from 2023—and even more (85%) plan to increase their spending on AI and GenAI.
While more than three-quarters (77%) of African executives plan to boost their tech investments, less than half (43%) puts AI and GenAI as their top tech priority for 2024, compared to half (51%) globally and 82% of executives in Africa plan to increase their AI and GenAI investments in 2024, compared to 85% overall.
Fifty-four percent of global leaders already expect AI to provide cost savings this year, primarily through productivity gains in operations, customer service, and IT.
“African executives are among the most optimistic in expecting productivity gains
from AI and GenAI. More than half (59%) are expecting 10% or more productivity gains from AI and GenAI this year compared to less than half (46%) of executives globally,” said Nihmal Marrie, managing director and partner at BCG, Johannesburg.
“Generative AI is radically reshaping businesses. Leading companies on the GenAI front are planning to realise up to $1 billion in productivity gains, and they are already looking at ways to reinvest into new business models and growth,” said Sylvain Duranton, global leader of BCG X and a co-author of the research. “This is a second chance for companies who missed the first AI wave.”
This is not the time to wait and see
Although a small percentage of companies are already reaping the rewards of AI and GenAI, others are either playing catch up or standing on the sidelines. More than 60% of global executives surveyed say their firms are still waiting to see how AI-specific regulations develop, and just 6% of global companies have trained more than 25% of their people on GenAI tools so far.
The Middle East leads globally while Africa lags on scaled AI and GenAI initiatives. Just over half (54%) of Middle East executives say their current AI and GenAI capabilities focus on limited experimentation and small-scale pilots compared to more than three-quarters (77%) of African executives and 71% of executives overall.
African executives (87%) see the greatest need globally for significant change management to deal with GenAI, compared to 74% of executives globally, while North American executives see the least need (69%).
Executives in Africa face massive gaps in upskilling their workers with only 3% reporting that more than a quarter of their workers have trained on GenAI tools compared to just 6% globally.
“Executives worldwide must boost upskilling, especially in Africa, Europe and South America, through accelerated programmes of systematic capability building to fully realise benefits such as productivity gains and cost savings,” added Marrie.
“To unlock GenAI’s full potential, executives should deploy it to improve efficiency of everyday tasks, reshape critical functions, and invent new business models,” said Schweizer. “Doing so can increase productivity by up to 20%, enhance efficiency and effectiveness by up to 50%, boost revenue, and create long-term competitive advantage.”
