Entrepreneurship and the urgency of skills investment to unlock South Africa’s AI dividend

Our nation’s future hinges on the prosperity of its youth, yet the reality of youth unemployment is a serious challenge.

With the youth unemployment rate sitting at a staggering 45.5% nationally, and reaching 62.4% for those aged 15–24, we face an urgent need to move beyond discussion toward decisive, impactful measures.

Artificial Intelligence (AI) is often discussed with apprehension, yet it is not merely a tool for technological advancement; it is an important catalyst for empowering the next generation, transforming unemployment challenges into opportunities for a prosperous future.

Embracing AI could allow young South Africans to unlock new career paths, enhance digital literacy, and contribute significantly to economic growth. While the global adoption of AI is expected to have a net effect on jobs in the short term, the long-term outlook promises that new industries will create more jobs and substantially grow the world economy.

AI is a necessary solution to fuel the development of new jobs. The opportunity for radical growth exists for South Africa, provided we make proper investment in digital infrastructure, innovation, education, and reskilling.

For young South Africans, the AI revolution should be seen as the moment to become job creators, not just job seekers. The integration of AI into sectors like agriculture, manufacturing, and services presents immense opportunities to optimise operations and generate new employment. However, to fully capitalise on this technological shift, we must focus on unconventional, local-focused strategies that address South Africa's unique developmental challenges.

Entrepreneurial success in AI means building systems that speak directly to local needs. Here are three key areas where young South African entrepreneurs can thrive:

Developing systems for local challenges using public data

Imagine AI systems custom-built to tackle uniquely South African problems.

This requires policymakers to create shared public datasets and environments for AI development, training, and testing.

By making government data (with private/sensitive data anonymised) publicly available, entrepreneurs can efficiently build advanced systems to solve problems facing the country without direct cost to the government.

For instance, by providing public access to school performance, resource, attendance, and socio-economic data, AI systems could be built to optimise resource allocation, customise learning tools, and provide better policy recommendations tailored to educational challenges.

This allows the country’s best minds to confront local challenges and develop tailored solutions.

AI-enhanced services and operations

Many existing administrative and secretarial roles, which are often highly repetitive, are most at risk of automation by 2027.

This displacement creates opportunities for entrepreneurs to build and deploy AI-driven efficiency tools for businesses and public entities.

AI can improve the efficiency of government operations and service delivery while radically cutting costs.

Young entrepreneurs can focus on developing specialised AI systems for public accountability, such as tools to detect fraud and manage risk in procurement, or systems that help municipalities analyse traffic and economic data to make better city planning decisions.

Building an AI-native ecosystem (Startup Focus)

To support these emerging ventures, South Africa needs robust investment facilities.

The next generation of large South African companies exists today, and policy must nurture them. We must establish a National AI Venture Investment Fund to inject capital into South Africa’s burgeoning AI startups.

This move is essential for boosting the local AI ecosystem and promoting AI-based economic growth, mirroring the strategies of global leaders who support their home-grown entrepreneurs

The opportunities in AI are clear, but they remain out of reach for many young South Africans due to significant barriers, including infrastructure deficits, high internet costs, and skill gaps.

Addressing these constraints requires visionary, agile, and collaborative leadership from the government, industry, and educational institutions.

Policymakers must realise that the average half-life of skills is now less than five years, necessitating continuous learning. The World Economic Forum estimates that 60% of all jobs will require reskilling or redeployment by 2027. 

To meet the 2030 goal of having 5,000 AI experts and training 30% of the country’s workforce with basic AI skills, the government must prioritise these targeted skills development initiatives:

A national public AI Learning Platform

The most cost-effective way to rapidly skill and reskill citizens is through a zero-rated (free to access) online AI learning portal.

This platform, built through partnerships with companies and universities, would drastically improve AI literacy and understanding of new opportunities. Investing in digital education focused on science, technology, and AI is essential to equip citizens with the tools needed to build AI systems that drive job creation and technological progress.

Integrating AI into education and practical experience

Educational institutions must evolve beyond traditional teaching methods, incorporating technical skills alongside essential soft skills like communication, business strategy, ethics, and psychology. 

Furthermore, formal education must be complemented by practical work experience, which is crucial for bridging the gap between theoretical learning and workforce demands.

Training without practice is incomplete; knowledge is embedded through application. Collaborative efforts are needed between academia, industry, and government to create relevant curricula and support innovation hubs.

Investing in digital infrastructure

AI prosperity requires a foundational investment in digital infrastructure, including data centers, energy generation, specialized hardware, and expanding internet and smartphone access.

Major players are already stepping up, such as Microsoft’s plan to invest R5.4 billion in South Africa by 2027 to expand cloud and AI infrastructure, underscoring the critical need for reliable power and connectivity.

AI presents a transformative opportunity to reshape the employment landscape for young South Africans.

By actively participating in AI training programs, seeking opportunities to apply these skills across various sectors, and engaging with initiatives fostering technological innovation, young South Africans can play a pivotal role in securing a prosperous future.

The stakes are high. If South Africa fails to move swiftly and strategically, it risks being left behind.

If we neglect our responsibility to build, learn, and ensure that the country thrives, we risk increased strife in the form of unemployment, crime, and economic stagnation. 

But if young people embrace this new digital reality and the government creates the conditions, through investment in unconventional policy and robust skills development, the country's enormous potential can be unleashed.

Rowen Pillai, CEO, LeanTechnovations.

BUSINESS REPORT