Way back in 2017, one could arguably view as the mainstream awakening of AI’s “Third Coming” by the release of PwC’s study of the economic impact of artificial intelligence on the world’s economy by 2030 . The study found that AI could increase global GDP by 14% (approx $115.7 trillion) making it the biggest commercial opportunity in the global economy. But how is Africa going to gain a slice of this lucrative Artificial Intelligence pie and will 2020 be a Tipping Point for African AI ?
Who is ready for AI in Africa?
That very same report estimates that the technology could also increase the GDP of Africa, Oceania and other Asian markets by 5.6 %, which is about $11.2 – trillion (but excludes China and developed Asia) so it stands to reason that Africa will reap significant economic rewards from AI – Right? However, the 2019 Government AI Readiness Index paints a familiar and somewhat predictably glum picture for the African continent in global indices of this nature. There are no African countries in the top 50 positions, and only 12 African countries (out of 54 in the list) are in the top 100. The top five placed African governments –Kenya, Tunisia, Mauritius, South Africa, and Ghana– reflects the well-documented developments in the technology sectors of these countries. Of the bottom ten countries, seven are classified as Least Developed Countries.
2019 saw Kenya’s ICT ministry set up a Distributed Ledgers Technology and Artificial Intelligence Taskforce to develop a roadmap for the transformative technologies that will define the Fourth Industrial Revolution and published arguably Africa’s most comprehensive report and plan to date calling on the government to invest in blockchain and AI infrastructure and skills to combat corruption and implement educational and skills programmes for the 4IR.
In December 2019 Egypt presented a proposal to form an African working group tasked with developing the first unified strategy on artificial intelligence across the continent, according to Golestan Radwan, advisor to the Minister of Communications and Information Technology on AI. The initiative will provide the African continent the opportunity to present a unified African position in the field in collaboration with the private sector and international institutions, she added, going on to explain that the development of AI in Africa should reflect positively on other fields such as education, health and agriculture
The African AI landscape & success stories
Al though Africa’s AI industry is still nascent compared to USA, Europe and Asia, this hasn’t stopped some of the continent’s most innovative startups from developing solutions that prove how promising the technology can be for Africa’s economy. Multiple African countries have a fledgling AI start up scene and pan African community driven events such as AI Expo Africa / Deep Learning Indaba are now well established and helping grow the AI community across the region.
One of the run away success stories of 2018/19 was Zindi – Launched at AI Expo Africa 2018, it has become the defacto African data science challenge platform across the continent – A community of 8000+ African data scientists solving Africa‘s toughest challenges.
AI as a platform for good is now also coming to the fore in the region with one of the newest AI start-ups being Enlabeler. The Enlabeler platform creates jobs in townships. The data labelling industry is growing at an enormous pace, it’s their mission to land these jobs in South African Townships – its also a scalable model that can be used in other African countries.
AI Research – Big gaps & challenges
Google announced the opening of an AI research centre in Accra, Ghana – its first on the continent. This follows companies like IBM opening research offices in Nairobi and Johannesburg. Microsoft have opened a data centre in SA and AWS will also follow in 2020. Longer established centres for AI R&D in South Africa are now being followed by Kenya and Nigeria who are focusing on investing in R&D. In addition organisations like Rwanda’s African Institute for Mathematical Scientists (AIMS) are set to play a crucial role in leading AI research on the continent.
But all is not well on this front, in a recent article published by the Alliance for AI, the biggest dark spaces were in the form of exclusion of African activity and innovators from global reports and events. Global reporters claim to not have access to information on what is happening on the African continent. For example, the Stanford Global AI Index and Europe’s State of AI Report had minimal information on activity from Africa.
Top African researchers, looking to attend global conferences to network with their colleagues and share their findings were mostly denied entry to countries where these conferences were held. A key example is the Neurips conference in Canada. For the second year more than half the African researchers who applied to showcase their work were denied visas. This systematically excludes African researchers from contributing to innovation at a global level.
It was interesting to note that the Oxford Insights team observed innovation in Africa is often ignored or overlooked because traditional metrics (such as the number of patent applications filed) are not well suited to the local context, and as a result there is a lack of data – essentially the map looks empty or bleak at best. The outlook for AI in Africa is positive in that there is growing interest in the topic from formal research centres and informal developer communities. Governments across Africa need to develop coherent and strong policies around AI if they are to capitalise on these recent developments, and ensure their citizens benefit from the advantages of AI whilst being protected from its potentially harmful impacts.
Opportunity & Investment
Unless you have been hiding under a rock its clear that spending on AI / Data Science powered technologies are attracting a lot of attention by both investors in and buyers of such solutions and sure to be a hot topic over the next decade. Enterprise adoption is increasing with the vast majority of those surveyed by PWC either investigating and piloting these technologies but with a caveat that wide scale deployment is perhaps still a long way off as there is a “need to focus on fundamentals before enlarging AI projects”. Corporate America is focused on capturing the expected $16 trillion in AI gains in the next decade while 90% of executives surveyed believe that AI offers more opportunities than risks, and nearly half are expecting AI to disrupt either their geographical markets, the sectors in which they operate, or both.
Based on the figures by Statista, AI funding is now a well established mult $bn industry and rapidly growing, so with both Enterprise demand and funding supply it should be a great time to be launching an AI Start Up – but is that the case in Africa?
Vian Chinner, CEO of South Africa-based AI company Xineoh, stated “In a single morning in North America, more VC funding is raised than in an entire year in South Africa”. According to the Southern African Venture Capital and Private Equity Association, the region’s VC industry made investments to the tune of $77 million (converted from 1.16 billion South African Rand) in 2017 while KPMG puts US VC deals at $84.24 billion for the same period – an average of $115 million per morning.
The investments being made in Africa in 2019 were significantly skewed towards FinTech and Nigeria has now surpassed SA and Kenya and arguably the regional powerhouse for making larger investments (greater than $1m), although its interesting to note that 5 start ups accounted for 50% of the total investments made at this level.
Focusing more narrowly on AI, some venture capital firms have taken a bet on AI startups on the Continent, these include SA based Knife Capital who has invested in Data Prophet and Kalon Ventures who have invested in FinChat Bot. Tunisia’s enterprise artificial intelligence (AAI) startup InstaDeep raised a $7 million Series – A round in 2019. Private equity firm Ethos also has a R1 – billion AI focused fund targeting South African companies. Unicef, through its Innovation Fund put out a call for Data and AI, and looking to make equity free investments of between $550k to $990k in early stage startups with AI, data science and machine learning solutions.
Naspers commiting R4.6bn of funding to back South African technology businesses. The initiative – called Naspers Foundry – was announced at the inaugural South Africa Investment Conference 2018 and aims to fund and support South African technology start-ups seeking to address big societal needs. As well as providing much needed funding, Naspers Foundry will help talented and ambitious South African technology entrepreneurs to develop and grow their businesses.
The SA SME Fund completed its first year which invests in funds that support and develop entrepreneurs with a remit to invest 50% of our capital into black-African owned and managed businesses, with a further 25% being dedicated to Indian and Coloured owned and managed businesses, with the remaining 25% being at the discretion of the fund manager. It is foundational funding helping to grow the wider investment ecosystem typically have an enterprise value of <R100m.
September 2019 saw the launch of Cirrus AI at AI Expo Africa to bring about a step change in the research and application of AI in the region. Supporting interdisciplinary cooperation spanning academia and industry around the world, boosting the application of AI technologies and ensuring the transformative potential benefits the region. Their model ensures inclusive participation, the dissemination of knowledge and ideas and the development of the next generation of African AI researchers allied to the Cirrus Foundry and Cirrus Fund to bridge the “Valley of Death” and overcome the challenge of turning a start-up idea or scientific research into large-scale commercial application.
More recently December 2019 saw Xecced Ventures announce the launch of its Africa focused artificial intelligence venture capital fund, $100m fund. In addition to investing in industrialisation centric AI, called industry 4.0, the fund will leverage AI to sustain globally benchmarked operational efficiencies, such as sourcing investments using AI to cut travel costs, and using AI to bolster investees’ product innovation. “This milestone is a major step towards Xecced Ventures’ mission of empowering Africans to harness the 4th industrial revolution”, says Muhtari Adanan, Managing Partner of Xecced Ventures. African Artificial Intelligence (AI) Software and Solutions company Cortex Logic has also launched Cortex Ventures to focus on AI startups in Africa.
Whilst the collective total of funding might not be Silicon Valley sized, its an encouraging start.
Skills development, bias & ethical challenges remain
Despite all this opportunity and promise, AI faces some challenges on the continent, top among these being educational awareness and a lack of technical skills. For example, what would be the impact of the introduction of such a technology to South Africa’s call centre industry? Analysis shows AI will create more jobs than it will destroy. Perhaps the biggest challenge will be the retention of talent that can easily be lured to Europe or USA with the promise of bigger salaries – this may be the biggest headache African AI startups will face – how do you hold onto the best people when everyone in larger companies with more salary resource wants them? A Microsoft and EY study found that 83%% of those South African companies looking to use AI want to apply the technology in automation. However, the amount of jobs made redundant by AI could be offset by investments in new skills which will be required for new jobs that the technology will create and stated that 96% of local businesses expect to gain “significant financial benefits” by optimising their operations through AI.
As Wim Delva, acting director of Stellenbosch University’s School for Data Science and Computational Thinking, writes, virtually every university in Europe and North America has responded to the challenges and opportunities of data science by establishing new institutes, departments and degree programmes in the field. In Africa, however, educational institutions have only recently begun to narrow the gap.
He and his team have created a vision to train 1,000,000 data scientists over the next 10 years – their road map and plans are impressive and towards the end of 2019 they published a learning resource aimed at primary school learners.
With Africa lagging behind with regards to broad AI talent or skills depth relative to the rest of the world – there is also concern that lack of local AI researchers could bring about AI bias as most of the solutions built elsewhere won’t be as applicable in an African setting owing to a lack of social context. According to IBM Research, data used to train AI can contain implicit racial, gender or ideological biases. Within five years, the number of biased AI systems and algorithms will increase significantly so we must be vigilant and ethical in how we develop, test and deploy these systems in the wild. Mass facial recognition applications that could potentially be abused and have massive privacy and human rights implications and allied to “deep fake” content, it looks like video, news and social media could become mass influencing tools which could have potentially destabilising effects if used for nefarious means.
So will 2020 be the tipping point for AI in Africa? The answer might now be more of a “yes” than a “no” but with large infrastructure challenges, the world’s largest population of young people under the age of 25 and massive employment issues there is both upside and downside that needs to be managed. Many of the worlds global challenges such as climate change, health, resources, societal and human ills exist in Africa. When you couple this to the incredible databank of local and regional insights that could address many of these problems you could argue that we are on a tipping point but no other Continent needs to spend its next dollar more efficiently than Africa does. AI (when used correctly) coupled to clever and innovative data science is a powerful tool for making accurate and fast decisions, so transforming lives across the world is a distinct possibility and it can be a force for good as well as bad. So regardless of the drawbacks the importance of Africa’s accelerated adoption of AI cannot be overstated.
These are just some of the topics being discussed at AI Expo Africa
With 3000+ members, AI Expo Africa is now entering its 3rd successful year and is the largest B2B trade focused Artificial Intelligence (AI) & Data Science conference in Africa. Our 2020 conference and expo will run on 3rd-4th September 2020 and builds upon the phenomenal success of the 2018 / 2019 events that were held in Cape Town, South Africa, that cemented it as the largest gathering of its kind, with over 1000+ registered decision makers, investors, buyers, suppliers, innovators, SMBs and global brands in the region focusing on real world AI and Data Science business applications.
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