MSMEs: AI: the supercharger for India’s MSMEs

The promise of artificial intelligence (AI) as a powerful force multiplier for small businesses is no longer a pipe dream. It is already beginning to level the playing field and is enabling emerging businesses from across India to compete more effectively.According to Stanford University’s annual AI Index report, India saw the fifth highest investments last year in startups offering AI-based products and services. As India’s techade takes shape, AI could prove to be one of the most game-changing technologies propelling growth for the nation’s micro, small and medium
enterprises (MSMEs).

Over 63 million MSMEs contribute to roughly one-third of the nation’s (gross domestic product) GDP, about 45% of the manufacturing output and over 40% of both direct and indirect exports. Given their pivotal role
in driving equitable economic development, AI-enabled growth of MSMEs will have a cascading impact on the economy.

Skill deficit

On the occasion of World MSME day, NASSCOM and Meta released a white paper on using AI to unlock the

next phase of growth for India’s MSMEs: across five workshops that NASSCOM held with more than 300 MSMEs, a resounding 94% of MSMEs acknowledged the transformative potential of AI for business growth, and 87% expressed confidence in its ability to enhance overall productivity.

While these businesses are keen on AI-led tech upgrades, 65% of MSMEs surveyed said they lack awareness about the deployment of AI tools and resources. More than half of surveyed MSMEs also struggle with a shortage of technical expertise necessary for implementing AI solutions.This skills deficit hampers their ability to fully utilise these advanced technologies, as they often lack the in-house capabilities to develop, integrate and manage AI systems or even simple AI tools. It is no surprise
that 91%, as per the report, advocate for accessible and affordable AI technologies, underscoring the demand
for easy-to-use AI tools.

Easy access

Generative AI tools such as image generation can enable businesses of all sizes to create multiple ad creatives at the click of a button, without spending large sums. For example, imagine the owner of a local food catering business needs an ad creative. In the past, the prospect of having to hire an outside expert and waiting days
for them to design a few suitable options might have seemed prohibitive for an MSME.

A generative AI tool, on the other hand, is able to illustrate steaming plates of food, and varied cuisines, as well as provide various alternatives for stylishly laid out tables and appealing combinations of dishes all within seconds.

Collaborative approach

Another strong use case for AI and Generative AI can be seen within business messaging. Where it could take days to respond to customer queries, bots and assistants on messaging platforms are now doing that in seconds. This is crucial for small enterprises for whom the value of each lead is that much more critical.

Generative AI presents a massive opportunity for MSMEs to gain traction by strategically adopting these technologies and setting the stage for early success and valuable learnings triggering meaningful transformation in the years to come.

Collaborative initiatives will cultivate an environment that ushers AI enablement into the MSME ecosystem. By facilitating synergy between industry leaders, policymakers and technology providers, we can empower MSMEs to harness the transformative potential of AI tools and technologies.

This collaborative approach on AI will equip MSMEs to navigate obstacles and unlock sustainable business growth via innovation to make this techade an MSME-powered one.

The author is vice-president (India) at Meta. All views expressed are personal