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By Mahesh Raja Edited by Jason Fell
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When talking about the impact of artificial intelligence (AI), global enterprises tend to dominate the conversation. However, this fails to recognize the incredible collective force that small- and medium-size businesses (SMBs) represent globally. To illustrate, SMBs make up 99% of businesses in Europe and employ more than 77 million people.
With 400 million SMBs globally, these companies are the backbone of economies around the world. If AI is leveraged across these businesses as a collective force, the pace of AI adoption is set to accelerate at a much faster clip and drive a powerful multiplier effect across economies worldwide. Here’s why.
Helping SMBs leverage AI isn’t just good news for the operations of each individual company. Kickstarting stagnant productivity rates with AI has a powerful impact on overall gross domestic production (GDP) rates.
Studies compiled by the International Monetary Fund (IMF) show that cumulative GDP gains from AI could reach up to 35% for more advanced economies that have the most to gain if AI innovation and integration are prioritized.
Here we know of the SMBs already working with AI, 90% already report productivity improvements. Looking forward, McKinsey pinpointed that 75% of the value from generative AI (GenAI) will fall across four main areas: Customer operations, marketing and sales, software engineering, and research and development (R&D).
If we put software engineering to one side for the moment, the other three areas are all core to any enterprise, large or small. GenAI enables businesses to scale creative and operational processes, including by helping companies with customer support, among other areas.
Further, once productivity has been increased in customer operations, sales and marketing, leaders can invest more in R&D. With productivity improved, more resources can be diverted to activities such as developing new product lines or finding alternative demographics that ultimately boost company growth and stability. What’s more, AI helps to do all of this more efficiently.
This will have a net positive impact on economies overall.
While concerns related to the rise of AI often cite how it will affect the labor market, improving the productivity within SMBs that represent the majority of all business activity worldwide will lead to company growth, higher spending, and ultimately an increase in job opportunities.
Although some jobs will be more in demand than others, the overall result is expected to be a net positive. PwC’s annual survey said that 82% of CEOs said that AI has increased or caused no change in headcount.
The technology transforms companies’ ability to apply intelligence, creating opportunities for innovative business models and new value pools. In other words, AI has become a force multiplier, allowing smaller companies to punch above their weight.
Software engineering was the fourth area identified as an early area of impact for AI.
Utilizing proprietary platforms to collect data, an earlier study by Ness Digital Engineering and Zinnov engaged with more than 100 software engineers across use cases and development settings. (Editor’s note: The author is Ness Digital Engineering’s Chief Growth Officer.)
The study revealed that GenAI implementation not only increased productivity but also allowed for deeply assisted context, enabling companies to globalize and work frictionlessly. The implication of this is not just better business outcomes, but an entirely transformed organizational design.
This included a 70% reduction in task completion time for existing code updates and a 48% reduction in task completion time for senior engineers, which saw this time repurposed toward mentoring activities that ultimately led to a 70% improvement to engagement rates.
By simplifying tasks and fostering a more collaborative and dynamic work environment, GenAI can play a pivotal role in creating a positive and fulfilling professional experience.
While our study focused on software engineers, we expect to see similar benefits across SMBs as productivity gains ease the pressure on a range of operational tasks.
Intelligent Engineering, which uses the power of data and intelligence to improve engineering productivity, can have a big impact here.
For any type of organization, understanding how best to implement AI can be a daunting prospect. What’s more, it’s rarely a plug-and-play experience.
For instance, 53% of small- and medium-size businesses found the initial cost of AI implementation to be much higher than anticipated. Leadership backing is, therefore, vital to spurring widespread access, implementation and adoption of effective AI solutions.
Whether it’s through regional business grants, education or peer support, helping these small yet mighty companies overcome adoption challenges that stem from legacy IT infrastructures to embrace AI will massively improve the collective time-to-value for this emerging technology.
In turn, this will ensure that economies worldwide can unlock huge productivity gains and benefit from the multiplier effect outlined above.
When we consider the pace of AI adoption and its ability to drive growth through efficiency and productivity gains, we would be remiss to leave SMBs out of the conversation.
Chief Growth Officer, Ness Digital Engineering
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