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The Impact of Artificial Intelligence on Business Growth in Small and Medium-Sized Enterprises (SMEs)
Subject area: Science,Engineering and Technology · Area of research: Artificial Intelligence
Abstract
Small and Medium-Sized Enterprises (SMEs) are very important for economic development, though they are faced with challenges for continued growth and development resulting from lack of resources, efficiency, and market accessibility. This study seeks to understand the effect of artificial intelligence (AI) on business expansion for SMEs, including data on AI adoption behavior, revenue and efficiency results, market expansion, employee and workforce productivity, and competitive positioning. Based on empirical research from diverse geographical locations, this study shows that adopting AI for business growth increases revenue performance through better customer targeting and operational optimization. Moreover, AI promotes reduced expenditure and employee productivity, resulting in efficiency gains for SMEs. However, differences in firm size, industry type, and readiness for AI technology show that medium and technology-oriented SMEs adopt AI technology to a larger extent. This research shows that despite opportunities for growth and development, SMEs are faced with constraints of financial unpreparedness and lack of technological infrastructure. This shows that for successful growth and development through AI technology, strategic implementation and employee skills are essential for continued market success and penetrability.
Keywords
Artificial Intelligence (AI); Small and Medium-Sized Enterprises (SMEs); Business Growth; Revenue Growth; Operational Efficiency; Workforce Productivity; Market Expansion; Competitive Advantage; AI Adoption Patterns; Cost Optimization
References
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[2] Agrawal, A., Gans, J., & Goldfarb, A. (2019). Artificial intelligence: The ambiguous labor market impact of automating prediction. Journal of Economic Perspectives, 33(2), 31–50. https://www.aeaweb.org/articles?id=10.1257/jep.33.2.31
[3] Al-Hawari, M. A., & Obiadat, A. A. (2024). Artificial intelligence adoption and SME performance: The moderating role of entrepreneurial orientation. International Journal of Applied Management and Entrepreneurship, 9(1), 1–18. https://ijame.com/index.php/IJAME/article/download/292/204
[4] European Commission. (2020). SME strategy for a sustainable and digital Europe. Publications Office of the European Union. https://op.europa.eu/en/publication-detail/-/publication/cc8d94f4-6e25-11ea-b735-01aa75ed71a1
[5] Jovanović, M., Sjödin, D., & Parida, V. (2022). The AI-pivoting SME: Leveraging artificial intelligence for business model innovation and competitive advantage. Social Science Review Archives, 5(3), 112–129. https://policyjournalofms.com/index.php/6/article/view/1172
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[10] Vrontis, D., Christofi, M., Pereira, V., Tarba, S., Makrides, A., & Trichina, E. (2022). Artificial intelligence, robotics, and human capital in SMEs: A systematic literature review. Journal of Business Research, 138, 577–591. https://doi.org/10.1016/j.jbusres.2021.09.001
How to cite this paper
@article{1714563,
author = {Olatunde Badmus, Reme Ekoh},
title = {The Impact of Artificial Intelligence on Business Growth in Small and Medium-Sized Enterprises (SMEs)},
journal = {Iconic Research And Engineering Journals},
year = {2026},
volume = {9},
number = {8},
pages = {1657-1664},
issn = {2456-8880},
url = {https://www.irejournals.com/formatedpaper/1714563.pdf},
abstract = {Small and Medium-Sized Enterprises (SMEs) are very important for economic development, though they are faced with challenges for continued growth and development resulting from lack of resources, efficiency, and market accessibility. This study seeks to understand the effect of artificial intelligence (AI) on business expansion for SMEs, including data on AI adoption behavior, revenue and efficiency results, market expansion, employee and workforce productivity, and competitive positioning. Based on empirical research from diverse geographical locations, this study shows that adopting AI for business growth increases revenue performance through better customer targeting and operational optimization. Moreover, AI promotes reduced expenditure and employee productivity, resulting in efficiency gains for SMEs. However, differences in firm size, industry type, and readiness for AI technology show that medium and technology-oriented SMEs adopt AI technology to a larger extent. This research shows that despite opportunities for growth and development, SMEs are faced with constraints of financial unpreparedness and lack of technological infrastructure. This shows that for successful growth and development through AI technology, strategic implementation and employee skills are essential for continued market success and penetrability.},
keywords = {Artificial Intelligence (AI); Small and Medium-Sized Enterprises (SMEs); Business Growth; Revenue Growth; Operational Efficiency; Workforce Productivity; Market Expansion; Competitive Advantage; AI Adoption Patterns; Cost Optimization},
month = {February},
doi = {https://doi.org/10.64388/IREV9I8-1714563}
}