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The New Normal: The status quo of AI adoption in SMEs

The growing adoption of AI by small and medium-sized enterprises (SMEs) has attracted significant research, yet existing studies offer a fragmented view. Our research highligh...

The article was featured in ICSB’s Journal for Small Business Management (JSBM).

Authors: Anna Peters, Dominik K. Kanbach, Sascha Kraus and Paul Jones

The recent surge in adopting artificial intelligence (AI) by small and medium-sized enterprises (SMEs) has garnered significant research attention. However, the existing literature reveals a fragmented landscape that hinders our understanding of how SMEs use AI. We address this through a systematic literature review wherein we analyze 106 peer-reviewed articles on AI adoption in SMEs and categorize states and trends into eight clusters: (1) compatibility, (2) infrastructure, (3) knowledge, (4) resources, (5) culture, (6) competition, (7) regulation, and (8) ecosystem: according to the technology–organization–environment model. Our research provides valuable insights and identifies significant gaps in existing literature, notably overlooking trends identification as a pivotal driver and neglecting legal requirements. Our study clarifies AI implementation within SMEs, offering a holistic and theoretically grounded perspective to empower researchers and practitioners to facilitate more effective adoption and application of AI within the SME sector.

Within the dynamic landscape of science and technology, artificial intelligence (AI) has emerged as a catalyst reshaping our interactions with technology, our problem-solving methods, and even our comprehension of intelligence itself (Giuggioli & Pellegrini, Citation2023). Despite the vast potential of AI, its integration within small and medium-sized enterprises (SMEs) faces considerable hurdles, notably the challenges of change management (Nagy et al., Citation2023). Overcoming these challenges and fostering AI adoption is imperative for SMEs to thrive (Lemos et al., Citation2022).

Critically, boosting AI use within SMEs requires navigating the complexities inherent in identifying suitable AI technologies and applying them across an array of organizational functions and deployment scenarios (Hansen & Bøgh, Citation2021). The literature on applying AI in SMEs, while abundant, often lacks coherence and comprehensiveness (bin Ahmad et al., Citation2019; Giuggioli & Pellegrini, Citation2023; Treiblmaier, Citation2018). This is unfortunate, as AI adoption by SMEs has substantial potential benefits ranging from productivity enhancements to cost reductions to improved employee experiences (Chaudhuri et al., Citation2022).

Failure to embrace AI could have dire consequences for SMEs, including lost competitiveness and market share, diminished economic influence, and reduced employment opportunities (Baabdullah et al., Citation2021). While AI adoption strategies vary, they typically involve increasing investments, automating processes, and upgrading systems and technologies to remain competitive (Hansen & Bøgh, Citation2021). It is essential to note, however, that overly complex AI applications may not be feasible for SMEs because of their cost and complexity (Moeuf et al., Citation2020).

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About the Author:

Ayman Tarabishy
Ayman Tarabishy
Dr. Ayman El Tarabishy is the deputy chair of the Department of Management and a teaching professor of management at the George Washington University School of Business. His expertise involves entrepreneurship and creative, innovative, humane-focused practices. In addition, Dr. El Tarabishy is the president & CEO of the International Council fo...
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