New Delhi, MSMEs across India have demonstrated confidence in the potential of AI to increase their productivity and performance; However, lack of awareness, accessibility and affordability draws a divide between conviction and adoption, a report reveals.
On the occasion of World MSME Day, technology industry body nasscom and social media giant Meta on Thursday released a whitepaper: Empowering India's Growth: Unlocking the Potential of AI for AI-Enabled MSMEs technology, which derives insights from the 'Enabling AI for MSMEs' program for technology MSMEs in India. , made earlier this year.
The program involved awareness and capacity building workshops in Gurugram, Hyderabad, Bengaluru, Mumbai and Pune, in which over 300 CXOs participated.
The analysis revealed a strong belief in the potential of AI among MSMEs, with 94 percent of MSMEs recognizing its ability to drive business growth.
Additionally, 87 percent of tech-enabled MSMEs (micro, small and medium-sized enterprises) showed confidence in the potential of AI to improve overall productivity.
"Critical to India's economic engine, MSMEs are at a critical juncture in today's rapidly evolving technology landscape. The integration of AI offers them a unique opportunity for unprecedented growth, increased productivity and sustainable innovation.
"Cross-ecosystem collaboration, along with access to easy-to-use tools and resources, is essential for technology MSMEs to realize the full potential of AI and for India to maximize its dividends," said Sangeeta Gupta, senior vice president and director of nasscom strategy, said.
However, despite widespread recognition of the potential of AI, a significant gap remains between technology-based MSMEs' beliefs and their actual adoption of AI solutions.
While 91 percent of respondents do not believe the technology is widely accessible and affordable for everyone, more than half of respondents cited budget constraints as a barrier to its adoption.
Furthermore, limited access to training resources, as highlighted by 72 percent of MSMEs, presents serious concerns in developing the necessary expertise within their workforce to effectively implement and manage AI solutions.
"AI solutions often require scalability to accommodate growing business needs and growing data volumes. MSMEs struggle to scale their AI infrastructure and applications, especially if they lack the resources and technical capabilities to do so. This challenge of scalability can hinder the long-term success and impact of AI adoption in MSMEs," the document states.
Additionally, she shed light on the lack of understanding of existing data protection laws in India, which she said makes it difficult for MSMEs to manage data effectively and comply with regulations.
"It is imperative that key players come together and support the MSME ecosystem. Collaborative efforts are essential to create an enabling environment for AI, ensuring that MSMEs can effectively leverage AI tools and technologies to its growth," the report says.
He recommended awareness creation and skill development programmes, government-sponsored acceleration programmes, grants and subsidies to address the challenges.
He also said that partnerships between MSMEs and AI solution providers, technology consultants or research institutions, and the development of easy-to-use AI tools designed specifically for MSMEs can help reduce barriers to adoption.
As per Government of India definitions, micro-enterprises have investments of up to Rs 1 million and annual turnover of up to Rs 5 million; small businesses have investments of up to Rs 10 million and annual turnover of up to Rs 50 million; and medium enterprises have investments of up to Rs 50 million and an annual turnover of up to Rs 250 million.
On the occasion of World MSME Day, technology industry body nasscom and social media giant Meta on Thursday released a whitepaper: Empowering India's Growth: Unlocking the Potential of AI for AI-Enabled MSMEs technology, which derives insights from the 'Enabling AI for MSMEs' program for technology MSMEs in India. , made earlier this year.
The program involved awareness and capacity building workshops in Gurugram, Hyderabad, Bengaluru, Mumbai and Pune, in which over 300 CXOs participated.
The analysis revealed a strong belief in the potential of AI among MSMEs, with 94 percent of MSMEs recognizing its ability to drive business growth.
Additionally, 87 percent of tech-enabled MSMEs (micro, small and medium-sized enterprises) showed confidence in the potential of AI to improve overall productivity.
"Critical to India's economic engine, MSMEs are at a critical juncture in today's rapidly evolving technology landscape. The integration of AI offers them a unique opportunity for unprecedented growth, increased productivity and sustainable innovation.
"Cross-ecosystem collaboration, along with access to easy-to-use tools and resources, is essential for technology MSMEs to realize the full potential of AI and for India to maximize its dividends," said Sangeeta Gupta, senior vice president and director of nasscom strategy, said.
However, despite widespread recognition of the potential of AI, a significant gap remains between technology-based MSMEs' beliefs and their actual adoption of AI solutions.
While 91 percent of respondents do not believe the technology is widely accessible and affordable for everyone, more than half of respondents cited budget constraints as a barrier to its adoption.
Furthermore, limited access to training resources, as highlighted by 72 percent of MSMEs, presents serious concerns in developing the necessary expertise within their workforce to effectively implement and manage AI solutions.
"AI solutions often require scalability to accommodate growing business needs and growing data volumes. MSMEs struggle to scale their AI infrastructure and applications, especially if they lack the resources and technical capabilities to do so. This challenge of scalability can hinder the long-term success and impact of AI adoption in MSMEs," the document states.
Additionally, she shed light on the lack of understanding of existing data protection laws in India, which she said makes it difficult for MSMEs to manage data effectively and comply with regulations.
"It is imperative that key players come together and support the MSME ecosystem. Collaborative efforts are essential to create an enabling environment for AI, ensuring that MSMEs can effectively leverage AI tools and technologies to its growth," the report says.
He recommended awareness creation and skill development programmes, government-sponsored acceleration programmes, grants and subsidies to address the challenges.
He also said that partnerships between MSMEs and AI solution providers, technology consultants or research institutions, and the development of easy-to-use AI tools designed specifically for MSMEs can help reduce barriers to adoption.
As per Government of India definitions, micro-enterprises have investments of up to Rs 1 million and annual turnover of up to Rs 5 million; small businesses have investments of up to Rs 10 million and annual turnover of up to Rs 50 million; and medium enterprises have investments of up to Rs 50 million and an annual turnover of up to Rs 250 million.
