The promise of artificial intelligence (AI) is tantalising: a world of unprecedented productivity, innovation, and economic growth. “If you’re on the right side of change, opportunities for investment, value creation, and jobs will be phenomenal,” says Valter Adão, chief executive of Cadena Growth Partners, a consultancy specialising in growth and modernisation. Yet, he warns, navigating this transformation won’t be easy. It requires leadership, investment, coordination, focus, and well-crafted contributions by business, government, and civilians – there are no spectators. It will also demand clarity of purpose rather than a blind rush to adopt the latest tools. In an era of AI hype, the lesson is clear: strategy must lead, and technology must follow.
Lessons from the past
A decade ago, South Africa’s corporate boardrooms buzzed with talk of “digital transformation”. Technologies like machine learning, the Internet of Things, and 3D printing captivated executives, who saw disruption everywhere – from garage-born entrepreneurs to fintech startups and new ways of engaging with customers without the bricks-and-mortar investments traditionally required to do so.
Adão, then leading a strategy and innovation practice at a global consultancy, says he observed a persistent error at the time: firms mistook technology deployment for progress. “Companies rushed to adopt tools without a clear business case, then scrambled to justify the investment,” he recalls. Back then, fewer than 20% of digital transformation initiatives met their expected returns. Even now, many investments remain misdirected. Many believed the technology was the silver bullet. But if that were true, the most established and resource-rich companies would be the most modernised and innovative. They’re not.”
The problem, Adão argues, is mindset. “Too many approached digital transformation with a technology-first lens. Instead, the technology should be led by, and serve, the corporate strategy in a qualified and quantified manner. In fact, I prefer the term business modernisation to digital transformation, to redirect the conversation from technology choices to the modernisation choices a business needs to consider. True modernisation begins with a clear ambition, not a shiny new algorithm.”
Looking beyond the hype
Today, as AI dominates corporate agendas, he senses a familiar pattern. Media hype is high, performance promises are bold, and anxiety about disruption – particularly its impact on workforces – is once again in the headlines. How can business leaders distinguish a truly transformational technology from one caught in a cycle of hype? And, more importantly, how should they determine whether, or how, to adopt it? The key, Adão suggests, is to firstly look beyond headlines and focus on credible, data-backed indicators. Secondly, understand the critical points of value your corporate strategy aims to achieve.
Strategy first
When it comes to corporate strategy, Adão says, “Too frequently, business leaders start with the tech and look for ways to use it – the ‘everyone’s doing it’ argument. In fact, it’s wiser to begin with your strategy and vision. The technology should flow from there”. In other words, AI can contribute to achieving your strategic objectives, but it can’t fix a broken strategy.
According to Adão, there are broadly three reasons to adopt any technology in a business, and leaders should cut through the complexity and sales talk to focus on these alone. “I call them the exponential dividends,” he says. “The clue to which dividends an organisation should prioritise will be found in its corporate strategy.”
- Exponential growth dividend
The first dividend lies in technology’s ability to generate new forms of revenue. This could involve leveraging technology to innovate entirely new products or services, or to enable more profitable business models that transform how value is created and captured. Think of Amazon’s “Customers who bought this also bought …” tool; McDonalds’ use of AI to automatically adapt drive-through menus in real time, adapting to variables like weather and sales trends; and Netflix tailoring your recommendations based on viewing history. In South Africa, Checkers’ Sixty60 has been tremendously successful at growing its retail footprint. - Exponential productivity dividend
The second dividend refers to the use of technology to dramatically reduce the cost of production or service delivery by increasing efficiency, improving quality, and streamlining operations. AI, in particular, has the potential to slash production costs at scale. “In South Africa, I’ve found this to be the most sought-after benefit of emerging technologies,” says Adão. Cost reduction is not just a financial advantage; it’s a disruptive force. The digital era is defi ned by the marginal cost of distribution trending towards zero. Consider Netflix: what does it actually cost them to add one more customer? Virtually nothing. AI now extends this logic further, driving the cost of creation, not just distribution, towards zero. - Exponential experience dividend
The third dividend refers to the ability of technology, particularly AI, to fundamentally enhance the way organisations interact with their customers. With AI, businesses can generate more meaningful touchpoints, deliver hyper-personalised interactions, and significantly elevate the quality of each engagement. Equally important, it can eliminate unnecessary or frustrating steps in the customer journey. For example, what once required a lengthy phone call or a branch visit can now be resolved in seconds through a well-designed app. This dividend is about transforming customer relationships from transactional to intelligent, seamless, and deeply personalised. Agentic AI is the key to unlocking these benefits.
Unemployable to unstoppable
Despite the potential for technology to unlock real value for organisations, perceived risks remain. Exponential productivity is often associated with job losses, which complicates this narrative.
A decade ago, consultancies predicted that automation would hollow out workforces – a concern amplified in South Africa, where unemployment remains high. Adão, also a faculty member at Singularity University, with a focus on how technology will impact the future of work and jobs, argues that this is a one-dimensional view that assumes a static pool of work, where machines directly displace workers, leading to a net loss of employment.
A broader perspective reveals that automation and related innovations can amplify productivity, spawn new products and services, enhance affordability, and fuel sectoral and organisational growth. The World Economic Forum projects a net gain of 12 million jobs by 2030, with roles like AI trainers and ethics specialists emerging. Far from merely substituting labour, technology often redefines economic possibilities, creating new opportunities that offset displacement.
Adão also believes that the opportunities presented by emerging technologies are not limited to high-tech or highly skilled roles. Rather, technologies like AI are lowering the barriers to entry, enabling individuals with limited formal education or experience to participate in the workforce more quickly and effectively. A 2023 World Bank report estimated that the online gig economy accounts for up to 12% of the global labour market, with significant growth in developing countries, including G20 members like India, Indonesia, and South Africa. This suggests that digital platforms contribute substantially to new job creation, especially in those with large informal sectors.
Adão cites Enrico Moretti, whose research revealed that for every new technology job, five non-technology jobs are created as a secondary effect. This is supported by a World Bank view that digital technologies could create 85 million new jobs in Africa’s services sector by 2030, driven by platform-based models and broader digital transformation. Another study suggests that 4.8 million workers in eight African markets were already providing services through digital platforms prior to the Covid-19 pandemic. In Europe, the platform economy is projected to generate 43 million jobs by 2026, underscoring the scale and breadth of the opportunity.
“Mass unemployment is not inevitable,” asserts Adão. “In fact, if it happens, it will be the result of bad choices by business leaders and policymakers, and will stem from a mismatch of skills with economic reality,” Adão says that if we approach this well, skills will adapt to be relevant in the AI-powered economy. “It’s only through technology that some jobs will remain relevant.”
In other words, some tasks and roles will become obsolete, but updating skills and redirecting business activities to be relevant will mean a net growth in jobs and output.
Many jobs won’t be replaced, but will rather take on a new shape, where employees harness AI to be more productive. Many of the mainstay corporate roles that have evolved gradually over the decades will likely become human-AI “partnerships”, where the human has the same outputs, but generates them better and faster by working with machines.
“It’s only through technology that some jobs will remain relevant,” explains Adão. We had a taste of this with the abrupt jump to remote and hybrid work that Covid-19 lockdowns forced on us. Suddenly, laptops, cameras, and video-conferencing tools became digital extensions of ourselves. The better we used these tools, the more productive we were. Despite the shock it caused at the time, it became common to work fully or partially remotely even post the pandemic.
From artificial to action
So, how do we lead people into this new era successfully? Step one, says Adão, is a full audit of jobs and technology. “It’s important to be transparent about where the organisation is in this revolution, including who’s fluent and who isn’t. Map out current jobs down to the level of individual tasks. Don’t chase redundancy. Look for augmentation. Hybridisation of people and technology is the secret sauce. Explore ways we can equip people to do more, better, as opposed to doing less, cheaper, by joining forces with technology.”
Once you’ve mapped your current position, you can plan the route forward, says Adão. But don’t limit the level at which you equip people. “Some jobs will be transformed more than others, but people have to be equipped to get the most out of AI, including management.” Data from MIT recently showed that CEOs score 23% and CFOs 11% on understanding technology’s impact on business and people (fluency). “This must change,” says Adão. “Not everyone needs to be a propeller head, but they must be fluent in the impact, progression, and economics of technology in a way that matches their role.”
Finally, time is of the essence. “Lean in responsibly. And do it fast,” warns Adão. “The longer an organisation resists change, the harder it becomes to adapt. Competitors and customers aren’t hanging around.”
*This article originally appeared in the Old Mutual Mindspace Thought Leaders Forum special issue. To read more, click here.