The R100 million (USD 6.1 million) commitment by telecommunications giant Telkom to establish its new Artificial Intelligence Institute has set a major benchmark for corporate skills funding.
However, for South Africa’s SMEs, the true value of the pledge lies in how it intends to bridge a widening capabilities divide that threatens to lock smaller players out of the modern digital economy.
As technology continues to reshape global supply chains, the initiative signals a shift from providing raw digital infrastructure to actively building local business capability.
For local small businesses, this development could represent a vital turning point in how they adopt and integrate advanced automation tools to remain competitive.
The launch of the Telkom AI Institute comes at a critical time for the domestic business sector.
Without the technical skills to leverage these new systems, small firms risk falling further behind larger corporate competitors who have the capital to import specialised tech talent.
“Connectivity without capability only gets South Africa halfway there,” Telkom Group Chief Executive Officer Serame Taukobong said.
“The Telkom AI Institute is our commitment to ensuring that connectivity translates into skills, jobs and opportunity, starting with the South Africans who stand to gain the most and who have had the least access until now.”
For the SME sector, this approach aims to address a major bottleneck in the local labour market. A lack of access to and knowledge of information technology remains a major barrier to growth.
According to National Small Business Chamber (NSBC) founder and CEO Mike Anderson, this gap is particularly dangerous given the high failure rate of early-stage businesses.
“We need to focus on giving businesses a digital transformation,” Anderson said, noting that many SMEs struggle to operate past the 1 000-day mark. He noted that as consumers demand digital services in a mobile-first market, adopting new technology levels the playing field, allowing local businesses to adapt and “stay in the game”.
Closing the digital-first growth gap
The pressure to digitise is echoed by the Small Business Institute (SBI), which has frequently warned that small businesses are disappearing at an alarming rate in South Africa.
SBI Chief Executive Officer John Dludlu said the modern survival of small businesses is directly tied to how fast they can adopt digital frameworks.
“From all that we read and the case-study examples of SMEs which were able to continue to trade by using digital tools or building digital-first businesses, an urgent commitment to digitalisation is South Africa’s best hope, as much for small towns and rural areas as urban centres,” Dludlu said.
Dludlu further noted that technology must be harnessed strategically to revive the local economy.
“Continuous innovation is central to economic prosperity,” he said. “If we embrace it with urgency and purpose, our economy will revive, jobs will be created, and businesses will become more productive in a virtuous cycle”.
Translating pledges into grassroots innovation
By targeting youth, small businesses, and underserved communities, the Telkom AI Institute could provide the local SME ecosystem with a more accessible pipeline of affordable digital talent.
The initiative builds on existing enterprise development efforts, such as the Telkom FutureMakers program, and its targeted AI Catalyst Growth Programme, which helps Black-owned ICT small businesses adopt and scale AI tools.
“By investing in the digital sector, we are helping to safeguard future livelihoods and laying the groundwork for innovation,” Telkom Group Chief Digital Officer Sello Mmakau said.
