Challenges and opportunities in AI and digital transformation for SMEs: A cross-continental perspective

Abstract

This study examines the impact of AI and digital transformation on Small and Medium-sized Enterprises (SMEs) across continents. As AI and digital technologies increasingly reshape global business landscapes, SMEs face unique challenges and opportunities distinct from those of larger corporations. This research systematically reviews existing literature, guided by the PRISMA framework, to identify the barriers and enablers of AI adoption in SMEs across these diverse regions. The study identifies key challenges, including limited financial resources, lack of skilled personnel, data security concerns, and organizational resistance to change. These barriers vary across continents; for instance, African SMEs often struggle with the high costs of AI implementation and lack of resources and expertise, while European SMEs face stringent regulatory challenges and a lack of infrastructure and finances. In contrast, Asian SMEs, particularly in developing countries, grapple with sustainability and sustainable regulatory and cultural barriers. However, it's important to note that the potential of AI to enhance operations and customer engagement is a universally recognized benefit. Europe emphasizes risk management and automation, while Africa and Asia highlight cost reduction, market expansion, and scalability, reflecting their unique regional priorities and challenges. The study concludes that while AI adoption presents considerable growth potential for SMEs globally, the path to realizing these opportunities is shaped by regional contexts. The research underscores the need for tailored policy interventions, capacity-building initiatives, and cross-border collaborations to support SMEs in overcoming these barriers and fully leveraging AI technologies. This work contributes to understanding digital transformation in SMEs, providing practical insights for policymakers, industry leaders, and academics interested in the intersection of AI and business strategy across different continents.