Adoption of artificial intelligence for manufacturing SMEs’ growth and survival in South Africa

Abstract

This study advances research and practice related to adopting artificial intelligence (AI) in the context of South Africa (SA). The study evaluated AI adoption by South African manufacturing Small and Medium Enterprises (SMEs); established the challenges faced by manufacturing SMEs in adopting AI; and developed a framework for adopting AI for manufacturing SMEs’ growth and survival. The study adopted a systematic literature review approach. Articles from Scopus and Google scholar databases, ranging from the years 2018 to 2024, were used. Of the 206 articles found, 54 were shortlisted. The systematic review analysis was performed using the PRISMA framework. The results identified AI adoption by South African manufacturing SMEs is low, limiting their innovation and productivity. The results also show, despite the numerous benefits AI adoption can offer manufacturing SMEs in the country, a major constraint is the lack of a framework to enhance adoption and implementation. Hence, this study was conducted to develop a framework to improve AI adoption by South African manufacturing SMEs. The findings contribute to the body of knowledge and provide new insights to manufacturing SME owners/managers, policymakers and practitioners into AI adoption to enhance manufacturing SMEs’ ability to compete on the global stage.

Keywords: {'name': 'Artificial intelligence, manufacturing SMEs, benefits, challenges, South Africa'}

Authors & affiliations

Emmanuel Akoh
Affiliation not supplied

Deposited references

Supplied references, not a list of publications citing this article.

Aarstad, A., & Saidl, M. (2019). Barriers to adopting AI technology in SMEs. A multiple case study on perceived barriers discouraging Nordic Small and Medium-size Enterprises to adopt Artificial Intelligence-Based solutions. [master’s thesis]: Copenhagen Business School. https://research-api.cbs.dk/ws/portalfiles/portal/60704162/790410_Aarstad_Saidl_Barriers_to_Adopting_AI_Technology_in_SMEs.pdf.

DOI: 10.4102/td.v18i1.1257

Adão, V., Vincent, M., & Davies, M. (2019). The Fourth Industrial Revolution is here – are South African executives ready? Deloitte. https://www2.deloitte.com/za/en/pages/consumer-industrial-products/articles/industry-4-0--are-you-ready.html [Accessed June 18, 2024].

DOI: 10.1007/978-3-031-08215-3_5

DOI: 10.21511/ppm.20(4).2022.15

Alexandra, R. (2022). Key opportunities and challenges for 4IR in South Africa. Working Paper Series WP 2021-8d. SARChi Industrial Development, University of Johannesburg. https://www.uj.ac.za/wp-content/uploads/2021/10/sarchi-wp-2021-08d-alexander-october-2022.pdf. [Accessed June 20, 2024].

Alsheibani, S., Cheung, Y., & Messom, C. (2018). Artificial intelligence adoption: AI readiness at firm level. Pacific Asia Conference on Information System (PACIS) proceedings. 37. https://aisel.aisnet.org/pacis2018/37

DOI: 10.1080/09537287.2022.2069049

Aron, J. (2023). Alan Turing. The father of modern computer science. New Scientist. https://newscientist.com/people/alan-turing [Accessed June 15, 2024].

DOI: 10.1016/j.egyr.2019.09.041

DOI: 10.3390/su16051864

DOI: 10.1007/978-1-4419-6108-2_12

DOI: 10.36713/epra15747

DOI: 10.1016/j.ifacol.2021.08.082

Bhalerao, K., Kumar, A., Kumar, A., & Pujari, P. (2022). A study of barriers and benefits of artificial intelligence adoption in small and medium enterprise. Academy of Marketing Studies Journal. 26(S1), 1-6.

DOI: 10.29379/jedem.v14i1.678

Brown, R., & Lee, N. (2014). Funding issues confronting high growth SMEs in the UK. ICAS. Edinburg, UK. https://eprints.lse.ac.uk/57264/1/Brown_Lee_Funding-issues-confronting-high-growth-SMEs-in-the-UK_2014.pdf. [Accessed June 9, 2024].

DOI: 10.1016/j.techfore.2021.120880

DOI: 10.3390/su141912760

Chintala, S. (2022). Data privacy and security challenges in AI-driven healthcare systems in India. Journal of Data Acquisition and Processing. 37(5): 2769-2778. https://doi.org/10.5281/zenodo.776608

Dasgupta, A., & Wendler, S. (2019). AI adoption strategies. Centre for Technology & Global Affairs. Working Paper Series, No 9. University of Oxford.

Davis, N. (2016). What is the Fourth Industrial Revolution? https://www.weforum.org/agenda/2016/01/what-is-the-fourth-industrial-revolution/ [Accessed June 11, 2024].

DePietro, R., Wiarda, E., & Fleisher, M. (1990). The context for change: Organization, technology and environment. The processes of technological innovation. Massachusetts, USA: Lexington Books.

DOI: 10.4324/9781003024583-23

Futcher, M. (2018). Competitive advantage during industry 4.0: The case of South African Manufacturing SMEs. A research report submitted to the Faculty of Engineering and the Built Environment, University of the Witwatersrand, Johannesburg, in partial fulfilment of the requirements for the degree of Master of Engineering. https://wiredspace.wits.ac.za/server/api/core/bitstreams/9398fbb4-ca08-4d51-9724-55555213b627/content. [Accessed June 13, 2024].

DOI: 10.1016/j.techfore.2022.121785

DOI: 10.33094/ijaefa.v14i2.667

DOI: 10.1016/j.jii.2019.100107

DOI: 10.1002/jrsm.1378

Gwagwa, A., Kachidza, P., Siminyu, K., & Smith, M. (2021). Responsible artificial intelligence in Sub-Saharan Africa: Landscape and general state of play. International Development Research Centre. file:///C:/Users/inaak/Downloads/739b3b9a-6a8a-4b32-8db8-291cb621d2dd.pdf. [Accessed June 12, 2024].

DOI: 10.5267/j.ijdns.2023.4.006

DOI: 10.1177/20552076231169836

DOI: 10.1016/j.ijinfomgt.2022.102497

DOI: 10.1007/s12599-020-00676-7

DOI: 10.1007/s12541-021-00600-3

DOI: 10.1016/j.technovation.2021.102375

DOI: 10.35683/jcm20031.79

DOI: 10.1177/09726225221124035

DOI: 10.1016/j.joitmc.2023.100144

DOI: 10.1007/s11769-017-0890-x

DOI: 10.3389/fpubh.2022.885067

DOI: 10.22610/jevr.v9i2(V).2798

Madzhadzhi, T. (2023). Overcoming barriers to AI adoption by SMEs. https://www.itweb.co.za/content/lwrKxv3YmbLMmg1o [Accessed June 7, 2024].

DOI: 10.3390/su13031013

Makina, D. (2022). Artificial Intelligence technology and their challenges in Africa. https://financialmarketsjournal.co.za/artificial-intelligence-technologies-and-their-challenges-in-africa/ [Accessed June 10, 2024].

McKinsey & Company. (2022). What are Industry 4.0, the Fourth Industrial Revolution, and 4IR? https://www.mckinsey.com/featured-insights/mckinsey-explainers/what-are-industry-4-0-the-fourth-industrial-revolution-and-4ir [Accessed June 11, 2024].

McKinsey & Company. (2023). What is AI? https://www.mckinsey.com/featured-insights/mckinsey-explainers/what-is-ai [Accessed June 15, 2024].

DOI: 10.3390/admsci14040070

DOI: 10.51415/ajims.v4i1.976

Nascimento, A. M., & Meirelles, F. S. (2022). Factors influencing the adoption intention of artificial intelligence in small business. ISLA 2022 Proceedings. https://aisel.aisnet.org/isla2022/20

Ndlovu, M., & Makgetla, N. (2017). Small business and industry policy. https://www.tips.org.za/images/REB_Small_Business_Edition_September_2017_.pdf. [Accessed June 12, 2024].

Ngibe, M., & Lekhanya, L. M. (2019). Critical Factors influencing innovative leadership in attaining business innovation: a case of manufacturing SMEs in KwaZulu-Natal. Int. Journal of Entrepreneurship, 23(2).

Ntuli, L. S. (2022). The influence of emerging technologies on Small and Medium Manufacturing Enterprises in eThekwini District Municipality of KwaZulu-Natal. [master’s thesis] Durban University of Technology.

Nwandu, E. (2016). Impact of rising interest rate on the performance of the Nigerian manufacturing sector. European Journal of Business and Management, 8(10), 125-134.

DOI: 10.31219/osf.io/pkeb8

Oclarino, R. (2021). Enabling an AI-ready culture. https://www.iso.org/news/ref2763.html. [Accessed June 7, 2024].

DOI: 10.30574/ijsra.2024.11.1.0231

DOI: 10.4102/sajim.v23i1.1284

DOI: 10.1007/s11301-024-00405-4

DOI: 10.31222/osf.io/v7gm2

DOI: 10.59168/FDMS6321

DOI: 10.1016/j.ijinfomgt.2024.102781

DOI: 10.5772/intechopen.72304

Philbeck, T., & Davis, N. (2018). The Fourth Industrial Revolution: Sharing a new era. Journal of International Affairs, 72(1), 17-22. https://www.jstor.org/stable/26588339

Pillay, P. (2016). Barriers to information and communication technology (ICT) adoption and use amongst SMEs: A study of the South Africa manufacturing sector. [master’s thesis] University of the Witwatersrand.

DOI: 10.1007/s12525-024-00707-1

DOI: 10.31235/osf.io/2r98w

DOI: 10.15458/2335-4216.1278

DOI: 10.1108/JSBED-12-2011-0035

Rao, T. (2017). Factors critical to the organisational adoption of Artificial Intelligence: A South African perspective. [master’s thesis]. Gordon Institute of Business Science: University of Pretoria, https://repository.up.ac.za/bitstream/handle/2263/64917/ Rao_Factors_2017.pdf?sequence=1&isAllowed=y [Accessed June 14, 2024].

DOI: 10.1016/j.techfore.2022.121562

Schoeman, F., & Seymour, L. F. (2022). Understanding the low Adoption of AI in South African Medium-Sized Organisations. A. Gerber (ed.), SAICSIT 2022 (EPiC Series in Computing), 85, 257-269

DOI: 10.3390/su132111703

Seseni, L., & Mbohwa, C. (2018). The implications of artificial intelligence on Soweto furniture manufacturing SMEs. Proceedings from: International Conference on Industrial Engineering and Operation Management, Washington DC, USA. http://ieomsociety.org/dc2018/papers/447.pdf. [Accessed May 30, 2024].

DOI: 10.46254/AN11.20210376

DOI: 10.1080/09537325.2021.1883583

Small Business Institute (SBI). (2018). The number of formal micro, small & medium businesses in South Africa-SBI. https://www.smallbusinessinstitute.co.za/ 2018/10/31/the-number-of-formal-micro-smallmedium-businesses-in-south-africa-preliminary-findings-of-stage-1-of-the-baseline-study-of-small-business-insouth-africa/SBIbaselineAlert1final [Accessed May 25, 2024].

Small Enterprise Development Agency (SEDA). (2022). SMME Quarterly Update 3rd Quarter 2021. http://www.seda.org.za/Publications/Publications/SMME%20Quarterly %202021Q3%20(002).pdf. [Accessed May 23, 2024].

DOI: 10.1590/0034-7167-2019-0250

DOI: 10.1080/14494035.2021.1928377

DOI: 10.3389/fbuil.2022.823998

Trading Economics. (2023). South African manufacturing production. https://tradingeconomics.com/south-africa/industrial-production [Accessed May 20, 2024].

DOI: 10.1111/1467-8551.00375

Uwagaba, J., Omotosho, T. D., & George, G. O. (2023). Exploring the barriers to artificial intelligence adoption in Sub-Saharan Africa’s Small and Medium Enterprises and the potential for increased productivity. https://www.researchgate.net/publication/367678657_Title_Exploring_the_barriers_to_Artificial_Intelligence_adoption_in_sub-Saharan_Africa's_Small_and_Medium_Enterprises_and_the_potential_for_increased_productivity#fullTextFileContent [Accessed May 15, 2024].

DOI: 10.1111/nhs.12048

West, D. M., & Allen, J. R. (2018). How artificial intelligence is transforming the world. https://www.brookings.edu/research/how-artificial-intelligence-is-transforming-the-world/ [Accessed May 10, 2024].

World Economic Forum (WEF). (2024). 6 ways to unleash the power of AI in manufacturing. https://www.weforum.org/agenda/2024/01/how-we-can-unleash-the-power-of-ai-in-manufacturing/ [Accessed July 24, 2024].

DOI: 10.1142/S0219877022500122

DOI: 10.1016/j.chb.2012.12.003