Artificial Intelligence will revolutionise Europe’s SMEs

Artificial Intelligence (AI) is, suddenly, everywhere. Thanks to a new breed of solutions and platforms such as OpenAI’s ChatGPT, Google’s LaMDA and Meta’s LLaMA, the power and potential of AI and its future role across all industries as well as society has been sharply brought to the fore.

OpenAI’s latest multimodal version (GPT-4) is, in particular, gaining significant attention given Microsoft’s stake in OpenAI and GPT-4’s integration into search engine Bing and Office 365. OpenAI’s plug-ins, which connect ChatGPT to the internet in real-time, are resulting in new, bespoke end-to-end business applications.

These types of innovative solutions add to the existing, more linear AI capabilities that have been around for a number of years. These include predicting (e.g., knowing in advance how many items of a kind will be sold) and clustering (e.g., segmenting customers and products to offer a personalized experience or recommending the best alternative).

Today, the blend of vast amounts of actionable data, increased computing power, the mainstreaming of cloud-based services, and new algorithms has given rise to a Cambrian explosion of business models and off-the-shelf solutions. Advances in fields such as machine learning and Natural Language Processing are resulting in truly exciting applications.

A key aspect of the new AI world is that a diverse number of developers and service providers are entering the market. Relevant examples for SMEs and business owners include Copy.ai and Jasper.ai (marketing copy); OpenSight (customer support); Harvey (legal support); and Ez Dubs (video and live streams in different languages). 

Endless opportunities for SMEs 

SMEs – in particular small, micro businesses with often limited marketing and IT budgets – are set to benefit from the rapid expansion of AI-led services, with many solutions representing a sea change in opportunity and a chance to optimise marketing, customer service and growth models at sharply reduced costs.

Indeed, such has been the progress made in terms of applications, SMEs can now leverage a range of ‘Big Tech’ as well as off-the-shelf solutions, tailoring them to their specific use cases. And since AI can be applied to most sectors, it can impact almost all types of SMEs.

Challenges to greater adoption, however, remain. SME owners are very busy and digitally unsavvy. Many are too unsure how best to invest the time in understanding how applications can support their ambitions.

One piece of recent research on Spanish SMEs, for instance, found that barriers to adoption include difficulty in estimating ROE (58%); lack of skills, capabilities or resources (47 per cent), and a lack of confidence in AI capability and employee resistance to implementation (30%).

This is a major shame and a challenge to many stakeholders in the industry to overcome. The good news is that more and more stakeholders recognise the role that digital processes such as AI can have for businesses.

The potential behind AI and digital processes 

Governments in Europe, conscious of the potential behind AI and digital processes, are starting to support SMEs with programs such as Spain’s Kit Digital with €3bn in digitalization subsidies to boost the adoption of digital and analytics solutions. Other countries are learning from this experience to follow suit.

The opportunities are huge. It is unsurprising that one recent and major report forecast that generative AI systems such as ChatGPT could spur a 7 per cent rise in annual global GDP over a 10-year period. We see strong benefits for businesses and society at large, ranging from productivity gains to cost reduction.

Indeed, we are just seeing the modest beginnings of the AI revolution and SMEs have a unique opportunity to gain a competitive advantage by leveraging it.

The views and opinions expressed are not necessarily those of AltFi.