South Africa

Why South Africa Is Set To Lead The Industry 5.0 Wave In Africa

South Africa is positioned to be Africa’s most competitive economy heading into the Industry 5.0 era. The country leads the continent in the index due to comparatively strong investments in sustainability and efforts in artificial intelligence research and adoption.

Resilience

South Africa is the continent’s commercial and AI hub

South Africa is home to quality universities, R&D institutions, and advanced telecom infrastructure. It also has several top tech firms and Africa’s most developed information and communications technology sector, and it leads the continent in 5G adoption and deep tech startups.

Consider Johannesburg, which boasts a dual role as a corporate powerhouse and a mobility connector for Southern Africa. The city is home to the continent’s largest stock market and serves as the headquarters for two-thirds of the country’s listed companies.

Johannesburg also hosts the AI Hub for Sustainable Development, a G7 initiative to foster public-private collaboration to build AI foundations in Africa. If successful, it could bring an additional $1.5 trillion to the continent’s GDP, according to the initiative’s analysis.

This initiative is one of a slew of recent AI plans that has cemented South Africa as a regional hub. The government’s National AI Plan seeks to inject AI into various sectors and promote innovation with a targeted $3.7 billion in government, local, and foreign investment by 2030. And in August 2025 one government agency announced the country’s first AI-powered robot dedicated to assisting in education programs.

Elsewhere, the University of Cape Town will host the African Hub for AI Safety, Security, and Peace, the world’s 12th multidisciplinary global AI lab and the second in South Africa. It will help empower African researchers and policymakers to detect AI-related harms, develop governance frameworks and tools, and engage the broader community to ensure AI tools reflect local priorities. Other higher education institutions, including Tshwane University of Technology, the University of Johannesburg, and the Central University of Technology, also have AI institutes.

Sustainability

South Africa is committed to environmental protection

South Africa is the continental leader in measures to protect the environment thanks to several initiatives. For example, it announced in October 2025 a framework to establish a carbon market, which includes plans for afforestation, restoration of degraded grasslands and coastal areas, and the capture of greenhouse gases from landfills, wastewater, and industrial processes. A separate coastal protection plan was unveiled in June 2025 to protect critical habitats at risk from climate change.

How a circular economy can open new business avenues for South Africa

South Africa’s plans for a circular economy will contribute to environmental protection, socio-economic growth, and risk mitigation.

The export of critical minerals is a significant part of South Africa’s economy, but the government forecasts less than 50 years of economically viable mining remain if no new deposits are discovered. The country also faces food and energy insecurity. A circular economy can help alleviate those pressures by creating new avenues for economic growth, protecting the environment, and using regenerative agricultural practices for food production.

The government is engaging with members of the South African Plastics Pact — a coalition of 50 organizations that represent 35% of the country’s plastics economy — on implementing a circular economy.

South Africa is the continent’s leader in clean energy investments

South Africa’s 2027 energy investment plan aims to create new jobs in sectors like electric vehicles and green hydrogen, roll out renewable energy sources, position the country as a global player in green economies, and boost economic growth with more than $57 billion in new investments.

Separately, in 2024 independent power producers in South Africa received a $464 million investment from the European Investment Bank and a local financial institution to develop solar, wind, and energy-efficient projects.