A recent PYMNTS Intelligence report, “New Report: Small Businesses Race to Critical Mass for AI Use,” found that there are significant gaps in how small and medium-sized businesses (SMBs) are approaching their growth strategies.
Small businesses with annual revenues of more than $150,000 are more likely to plan innovation and expansion strategies aimed at driving growth.
Small businesses with annual revenues below $150,000 or declining revenues are more likely to implement cost-cutting measures to foster growth.
But the report, based on a survey of more than 510 SMEs, concludes that whether SMEs are adopting innovation strategies to achieve growth or achieving growth through cost-cutting measures, there is one method that can help both camps: artificial intelligence (AI).
According to a PYMNTS Intelligence survey, 96% of small businesses that have tried AI tools see AI as an effective way to streamline operations. In fact, the data shows that the companies most at risk and that have already adopted cost-cutting strategies are also the ones that could benefit most from adopting AI to automate routine tasks.
The data shows clear differences in how SMBs are currently using technology. Companies with growing revenue and those making more than $1 million per year are twice as likely to use AI than companies with stable or declining revenue. Of companies with growing revenue, 51% are currently using AI, while only 19% of SMBs in cost-cutting mode say they are currently using AI.
For small and medium-sized businesses that are adopting AI today, how are they using it? Automating routine tasks and improving the quality and reliability of business processes seem to be common themes for most companies.
As the accompanying chart shows, of SMBs currently adopting AI, approximately 61% say they have done so to automate routine tasks, 53% say they are using AI techniques to improve the quality and reliability of processes, and 46% are using AI to improve the quality or reliability of the goods or services they sell.
And for small businesses looking to cut costs in order to grow, here's one statistic that's especially interesting: While very few businesses are using AI to cut costs today, of those that do, more than a quarter of them say they're deploying it to identify expenses that can be reduced or eliminated.
Additional data from PYMNTS Intelligence in “Small Businesses Race to the Tipping Point for AI Use” highlights that AI can help meet the needs of a wide range of small businesses. We found that companies with growing revenue and those with revenues of more than $1 million are more likely to use AI to improve the quality and reliability of their processes. Meanwhile, companies with fewer resources are more likely to use AI for automation, suggesting that AI spending is focused on improving routine operations.
