Microsoft South Africa is making a significant investment of R1.3 billion ($70 million) in the South African economy through a 10-year partnership with the Department of Trade, Industry, and Competition (DTIC). This investment aims to develop small, micro, and medium-sized enterprises (SMMEs), create local jobs, and prepare the country for a future shaped by artificial intelligence (AI).
Part of the investment will support a R663 million ($34.6 million) enterprise development program, which will focus on technology start-ups owned by black South African entrepreneurs and the development of new solutions in disruptive technologies.
Another R347 million ($18.9 million) will go towards a skills development initiative, providing young black South Africans with intensive training through certification courses and leadership programs. Additionally, R160 million ($8.7 million) will fund research programs to further AI innovation.
This investment is expected to boost South Africa’s AI sector, which is projected to reach $0.90 billion in 2024 and grow at an annual rate of 28.22%, reaching a market volume of $4.00 billion by 2030.
In recent years, South Africa has intensified its efforts to adopt AI for economic growth, improved efficiency, and to tackle societal challenges. In April 2024, the country unveiled a draft of its national AI plan, following the establishment of the AI Institute of South Africa (AIISA) and the Centre for Artificial Intelligence Research (CAIR) several years ago.
Kalane Rampai, Managing Director of Microsoft SA, emphasised the transformative impact of AI on the workplace and the necessity for individuals to gain relevant skills. He highlighted that organisations investing in AI tools and training will attract top talent. Rampai also noted that the investment would support the growth of SMMEs through technology, digital transformation, and market opportunities.
SMMEs are crucial to South Africa’s economy, contributing nearly 40% of the GDP and employing around half of the workforce. However, many face funding gaps, often relying on personal savings or loans for their operations.
Additionally, on May 3, 2024, South Africa launched the Defence Artificial Intelligence Research Unit (DAIRU) at the Military Academy in Saldanha, Western Cape. This military-focused AI hub aims to harness AI’s potential in the defense sector, as well as in national development and security.
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