Exploring AI’s potential: Can it truly benefit small businesses?

The rapid advancement of artificial intelligence (AI) presents unique opportunities and challenges for businesses across all sectors.

While larger corporations have the resources to harness cutting-edge AI solutions, small businesses often face a different set of constraints.

Gege Gatt, CEO of EBO, Alexiei Dingli, Professor of AI within the Faculty of ICT at the University of Malta, and Paul Grech, Senior Manager of Strategy and Investments at GO plc and a startups mentor, spoke to MaltaCEOs.mt to explore how AI can benefit small businesses and what factors are driving or hindering its adoption.

Tools and solutions: what AI offers to small businesses

Prof. Dingli highlights that AI adoption among SMEs is gradually increasing, with tools such as chatbots, automation software, and data analytics leading the way. “AI chatbots are widely used to improve customer support by handling routine queries, reducing wait times, and boosting customer satisfaction,” he explains.

This allows small business employees to dedicate their time to more complex customer needs, driving overall efficiency, he adds.

Additionally, AI-driven data analytics is gaining traction, enabling businesses to glean insights from customer interactions and buying habits. “This helps SMEs personalise their marketing campaigns, which in turn fosters greater customer loyalty and engagement,” Prof. Dingli adds.

Mr Grech echoes the potential benefits, stating, “AI is not merely a tool but a powerful engine for growth. It has the power to reshape the global economy and transform industries profoundly.”

He sees significant promise in AI applications that help small businesses automate time-consuming tasks and better compete with larger entities. “The potential here is immense: Small businesses can use AI to improve efficiency, personalise customer interactions, streamline inventory, and compete with larger players more effectively,” Mr Grech says.

Addressing the challenges: Barriers to AI adoption

While the opportunities are apparent, the challenges of AI adoption in small businesses are equally significant.

Dr Gatt points out that AI is often perceived as complex and costly. “Businesses worry about resource constraints, both in terms of budget and personnel, fearing that without an extensive IT infrastructure, AI adoption could be a daunting prospect,” he observes.

This perception can deter small businesses from exploring AI solutions. To counter this, EBO designs its platforms to be modular and highly configurable, allowing smaller businesses to start small and scale as needed. “Our AI solution integrates seamlessly into existing systems, so businesses don’t need to undergo expensive tech overhauls,” he notes.

Prof. Dingli identifies a lack of awareness as a substantial barrier. “While AI is central to Malta’s national strategy, positioning the country as an AI hub by 2030, SMEs often face significant challenges, such as the high costs associated with AI infrastructure,” he says. This echoes Mr Grech’s comment that there is a prevailing belief that AI is either “something generic like ChatGPT or a tool that only big businesses can afford.”

Mr Grech adds, “when you think that way, you will not put much energy into looking at how AI can help your business.”

Privacy and regulatory compliance also pose challenges for small businesses, according to Prof. Dingli.

“Data security and privacy regulations, such as GDPR and the new AI Act, can complicate AI adoption,” he says, emphasising the importance of clear regulatory frameworks.

Key factors for successful AI implementation

For AI adoption to be successful in SMEs, affordability and ease of use are paramount.

Prof. Dingli stresses, “while larger companies can afford bespoke AI solutions and have the infrastructure to support them, SMEs rely heavily on ready-made tools that are budget-friendly and easy to deploy.”

He adds that AI platforms should integrate smoothly into existing workflows to minimise the need for expensive training or hiring specialists.

Mr Grech concurs, noting, “any tool aimed at [small businesses] needs to be easy to implement, with clear return on investment (ROI) and low-maintenance infrastructure.”

The focus is on intuitive design and user-friendly dashboards that make AI accessible, even for those without extensive technical knowledge. “By removing technical complexity, we empower all businesses to leverage AI to its fullest potential, reinforcing our mission to democratise AI,” Dr Gatt says.

Mr Grech emphasises that education is another crucial factor for successful AI adoption. “The biggest barrier is, frankly, lack of education,” he states. He points to a need for greater awareness among small business owners about how AI can be integrated affordably and effectively.

“Smaller businesses are often focused on managing cash and maintaining customer demand, leaving them little time to think about how to adopt new technologies,” he notes. However, Mr Grech is optimistic that this will change as more AI solutions are tailored specifically for small enterprises.

The industries best positioned to benefit

AI has the potential to revolutionise certain industries more than others, according to the experts.

Prof. Dingli outlines several key sectors: “Retail SMEs are using AI for personalised marketing, inventory management, and dynamic pricing models. Customer service is another area where AI chatbots and virtual assistants are transforming how small businesses operate.” Healthcare and logistics are also poised to benefit, with AI-driven tools assisting in patient data management, appointment scheduling, supply chain optimisation, and real-time inventory management.

Mr Grech believes that the trend towards more specialised, user-friendly AI tools will accelerate AI adoption in these industries. “Customer support automation, automated marketing tools, inventory management, and personalised product recommendations are highly promising applications,” he says.

These solutions address high-impact tasks, freeing up resources and allowing small businesses to allocate their attention to strategic growth.

The road ahead for AI in small businesses

Despite the challenges, all three experts believe that AI holds transformative potential for small businesses.

Dr Gatt sees EBO’s work as part of a broader mission to make AI accessible: “We believe AI should be intuitive and easy to use from the outset, regardless of the user’s technical background.”

Prof. Dingli highlights the importance of ongoing support and simplified tools to drive adoption: “The emergence of general-purpose AI tools has made technology more accessible, helping SMEs close the productivity gap with larger corporations.”

Mr Grech concludes with a hopeful vision, stating, “AI providers are now simplifying tools and improving support, making AI more accessible. The businesses that will be at the forefront of delivering the AI revolution are those that are willing to experiment and see past the traditional view of AI as inaccessible.”

In summary, while small businesses face notable barriers to AI adoption, experts agree that affordable, user-friendly, and well-integrated solutions are key to unlocking AI’s potential.

Whether through enhancing customer interactions, optimising operations, or personalising marketing strategies, AI offers small businesses an unprecedented opportunity to thrive in a competitive, tech-driven landscape.