Artificial intelligence (AI) is often framed in binary terms: either as an existential threat that will replace workers, or as a tool that will usher in the next wave of growth or productivity. The reality is likely to be more nuanced.
The potential impact in South Africa will likely differ from what we are seeing in economies such as the US. However, developments there may provide some clues about what we could expect locally.
Research from the International Monetary Fund suggests that around 40% of global employment is exposed to AI in some way. In advanced economies, that figure rises to approximately 60%. Goldman Sachs has also estimated that around 300 million full-time jobs globally will be affected by AI over the next decade.
Interestingly, widespread job losses are not necessarily what we are seeing at the moment. Instead, AI appears to be changing how people enter and progress through the labour market. The pressure is most visible in the services sector and in entry-level roles, where companies may be creating new positions more cautiously than before.
The impact will also vary depending on the composition of the labour market. Jobs that are heavily administrative, repetitive, routine, and process-driven are at greater risk. By contrast, higher-level roles appear to be more insulated. These are jobs where experience, judgement and oversight are important, particularly roles that involve evaluating AI-generated outputs and determining whether the results are accurate and appropriate.
There is also an argument to be made that, while AI may eliminate some jobs, the technology is likely to create new ones. Roles such as programmers, engineers and process designers could all benefit from these developments.
In the US, for example, graduate absorption has weakened as companies create new positions less aggressively than they once did. Research from IESE Business School also found that wages for junior workers at AI-exposed firms declined following the launch of ChatGPT. Even for those who do secure employment, wage growth has not been favourable.
In a country like South Africa, where our economy already faces a significant youth unemployment challenge, many graduates already struggle to secure meaningful first opportunities. If AI reduces the need for entry-level roles, or slows the creation of those roles, it could make an already difficult transition from education to work even harder.
This is both a social concern and a business issue. Many organisations are understandably investing in technology to improve margins, but they also need to look beyond short-term efficiency gains. Succession planning, knowledge transfer, and capability building remain crucial. If businesses stop bringing in and developing younger talent through the organisation, they risk weakening the very pipeline that will produce future leaders and provide oversight of increasingly complex systems.
The same applies as AI begins to converge with robotics. In manufacturing, the future is not robotics alone, but the integration of robotics and AI. That shift could increase demand for high-skilled technical oversight while reducing the number of routine roles available. For a country already grappling with inequality, the issue will shift from the job’s technology displaces to how workers are prepared and equipped for those roles it creates.
For workers, technical familiarity with AI will matter, but so will the human capabilities that are more difficult to automate, including judgement, relationship-building, accountability, and the ability to interpret outputs in context.
From an investment perspective, it is important for investors to look for businesses that do not focus solely on margin expansion. There is a natural limit to cost savings, whereas growth is less constrained. AI strategies should increasingly be evaluated in terms of their contribution to top-line growth.
The winners will not be the companies that automate the most, but those that use AI to grow while preserving the judgement, accountability, and talent pipelines that sustain a business over time.
Written by Adriaan Pask, Chief Investment Officer at PSG Wealth