Australian small and medium-sized enterprise (SME) businesses find themselves grappling with the challenge of adopting AI, potentially jeopardizing their future by adhering to traditional business practices.
Recent research by MYOB concluded just 19% of Australian SMEs are currently utilising AI in their operations in 2023. Additionally. only 21% of SMEs have plans to adopt AI in the near future, which means that 60% are either unsure how to get involved in AI or simply unaware of it as a business opportunity.
The year 2023 marks the onset of a groundbreaking era in generative AI, and this transformative journey is only in its nascent stages. The profound influence of tools such as ChatGPT and Google’s Bard is expected to unfold in ways that we may not have accurately foreseen.
Highlighted in a McKinsey report earlier this year, the projected business upheaval caused by generative AI is substantial, with survey respondents anticipating substantial alterations to their workforces.
Foreseen changes include workforce reductions in specific domains and extensive reskilling initiatives aimed at adapting to evolving talent requirements.
Nevertheless, Australian SMB’s face challenges in seizing the potential of AI, risking adherence to outdated business practices that could jeopardise their long-term viability.
Small business owners are seeking cost-cutting measures
A recent report from banking fintech, Zeller, revealed that 85% of small business owners are actively seeking cost-cutting measures, recognising the “urgent need for creative solutions to help support growth.”
Additionally, research from GetApp indicates that 53% of SMEs are allocating more resources to their social media budgets, with half of that increase directed towards content creation.
These pivotal areas are where AI can significantly aid SMEs; however, due to the limited adoption of AI, many businesses are missing out on the opportunity and, consequently, burdening themselves with more manual and labor-intensive tasks.
According to MYOB’s research, SMEs that have embraced AI are leveraging it for the following purposes:
- Social media and social marketing content (49%).
- Copywriting for marketing materials and press releases (34%).
- Copywriting for technical documents (25%).
- Market, trend, and risk analysis (25%).
In essence, generative tools, capable of rapidly creating text and artistic assets, present an opportunity for SMEs to reduce costs and time spent on content generation, particularly for creative assets.
MYOB’s research also indicated businesses that adopt AI to streamline processes can reallocate time towards business growth (44%), innovation (24%), and the development of new products and services (24%). Ultimately, these businesses will be better equipped to enhance agility and address market dynamics.
Challenges SMEs are currently facing
As highlighted in a report by the OECD addressing the current challenges faced by SMEs, it emphasizes that “many small enterprises still lack the necessary skills to fully harness the potential of digital technologies.”
The same report reveals that SMEs have expedited their adoption of digital tools, engaging in activities such as social media and cloud services. However, they appear to be unaware of how to integrate AI into their operations.
For IT professionals operating within small businesses or serving as managed services providers for SMEs, this scenario presents an opportunity to assist these enterprises in taking a crucial step
This step could also prove to be the decisive factor between a SME that ultimately succeeds and expands, and one that grapples with disruptions.
Taking advantage of generative AI
In the rapidly evolving landscape of technological advancements, small and medium-sized enterprises (SMEs) find themselves at a crossroads with the integration of generative AI.
Contrary to common misconceptions, harnessing the power of generative AI need not be a complex or resource-intensive endeavor.
Instead, what it demands is a scarcity for most SMEs—the right skills and training within the organisation to execute an effective AI strategy and a discerning understanding of where AI can yield optimal results.
To pave the way for SMEs to capitalise on generative AI, information technology (IT) professionals can spearhead a straightforward strategy.
Comprehending the potential applications of generative AI within the specific context of the SME’s operations is a crucial initial step.
The generative AI (GenAI) market
The generative AI market is on the brink of a significant growth, propelled by the rise of consumer-oriented AI programs such as Google’s Bard and OpenAI’s ChatGPT.
According to a recent report from Bloomberg Intelligence (BI), the market is anticipated to soar from its 2022 size of $40 billion to an impressive $1.3 trillion over the next decade.
The growth trajectory is projected to follow a Compound Annual Growth Rate (CAGR) of 42%. In the short term, this surge is expected to be fueled by advancements in training infrastructure, gradually transitioning to inference devices for large language models (LLMs), digital ads, specialised software, and services in the medium to long term.
The rising demand for generative AI products
The rising demand for generative AI products has the potential to contribute approximately $280 billion in fresh software revenue propelled by specialised assistants, novel infrastructure products, and coding accelerators known as copilots.
Major beneficiaries of these trends are anticipated to include companies including:
- Amazon Web Services. (AWS)
- Microsoft.
- Google, and
- Nvidia.
It’s particularly evident as enterprises continue to migrate a greater portion of their workloads to the public cloud.
The disparity between the potential benefits of GenAI technology and its adoption rate among Australian SMEs raises pertinent questions about the underlying challenges hindering widespread integration.
Despite the evident advantages, with low costs and accessible entry points, the reluctance of less than 20% of Australian SMEs to embrace GenAI highlights the need for a deeper understanding of the barriers at play.
Today, businesses need to undertake a thorough examination on issues of concern like awareness, education, and misconceptions in 2023 and beyond so that the market can embrace the trend with more understanding.
These issues have to be addressed as technology changes as Australian SMEs need to thrive in such an ever-growing competitive business environment.
