Artificial Intelligence (AI) holds the potential to supercharge the efficiency of small businesses by a remarkable 40%, according to a recent survey conducted by The Small Business and Entrepreneurship Council (SBEC). In a report released on Monday, the SBEC shed light on how AI adoption can empower small enterprises to overcome challenges like surging inflation.
The SBEC’s survey pinpointed several areas where AI can bring significant advantages to small businesses. Data analytics, customer relationship management, and task automation emerged as key domains where AI-driven solutions can bolster efficiency and productivity.
A noteworthy revelation from the survey was that 41% of small business owners had already harnessed AI to automate routine and mundane tasks. This strategic move allowed them to redirect their time and focus towards more critical aspects of business management.
Mark Bower-Easton, the Head of Distribution at investment company Oxford Capital, elaborated on the survey’s findings, emphasizing the pivotal role of AI in data analytics. He explained, “One key aspect where AI proves instrumental is in data analytics. Small businesses often possess vast amounts of data, and AI-driven analytics can extract valuable insights, allowing for more informed and strategic decision-making.”
Furthermore, AI’s influence extends to customer engagement, where sophisticated algorithms can analyze customer behavior and preferences. This empowers businesses to tailor their marketing campaigns to individual needs, crafting personalized content swiftly and cost-effectively.
AI’s role in tackling inflationary pressures
Incorporating AI into business operations also emerges as a valuable strategy for addressing inflationary concerns. Mark Bower-Easton noted, “In an era marked by inflationary challenges, AI has emerged as a crucial ally for small businesses striving to maintain cost stability for consumers.”
By leveraging AI, small business owners can optimize various facets of their operations, from supply chain management to resource allocation, enabling precise cost control. This cost-effectiveness becomes particularly relevant as inflationary pressures loom large on the horizon.
A survey conducted by research and analysis company GlobalData in 2023 found that 46% of companies identified high inflation as their most pressing concern with near-term impacts on their businesses. The International Monetary Fund’s December 2023 issue of F&D corroborated these concerns, noting that global inflation had reached “historic” heights in 2022, with prices surging in advanced economies at their fastest pace since 1984.
As nations grapple with the challenge of high inflation, the adoption of AI by small businesses emerges as a strategic move to combat rising consumer prices while maintaining competitiveness against larger corporations.
AI’s expanding market reach
GlobalData, in its forecasts, predicts that the AI market will witness exponential growth, surging beyond $909 billion by 2030, with a remarkable Compound Annual Growth Rate (CAGR) of 35% between 2022 and 2030. Within the AI market, generative AI is poised to be the fastest-growing segment, with projected revenues skyrocketing from $1.8 billion in 2022 to a staggering $33 billion in 2027.
As AI transitions into mainstream business practices, GlobalData anticipates that more companies will explore open-sourcing AI models in private cloud infrastructure, further democratizing access to AI capabilities and fostering innovation.
In a landscape where small businesses grapple with inflationary pressures and the need for enhanced efficiency, AI emerges as a potent tool for transformation. The SBEC’s survey underscores the remarkable potential of AI in boosting small business efficiency by 40%, offering a lifeline for entrepreneurs seeking to navigate the challenges of the modern economic environment.