Artificial intelligence (AI) is no longer a distant promise but a present-day game-changer for India’s micro, small, and medium enterprises (MSMEs). With AI's ability to level the playing field, small businesses across India are now competing more effectively. According to Stanford University’s annual AI Index report, India saw the fifth highest investments last year in start-ups offering AI-based products and services.

AI's transformative potential is particularly significant as India’s techade takes shape. Over 63 million MSMEs contribute to roughly one-third of the nation’s GDP, about 45% of the manufacturing output, and over 40% of both direct and indirect exports. The AI-enabled growth of MSMEs will thus have a cascading impact on the economy.

Addressing the Skill Deficit

On World MSME Day, NASSCOM and Meta released a white paper discussing AI's role in unlocking growth for India’s MSMEs. The report highlights that 94% of MSMEs recognize AI's transformative potential, and 87% are confident in its ability to enhance productivity. Despite this enthusiasm, 65% of MSMEs lack awareness about AI tools and resources, and more than half struggle with a shortage of technical expertise.

This skills deficit hampers the ability of MSMEs to fully utilize advanced technologies. Without in-house capabilities to develop, integrate, and manage AI systems, many MSMEs are unable to leverage AI effectively. As a result, 91% of MSMEs advocate for accessible and affordable AI technologies, highlighting the need for easy-to-use AI tools.

Enhancing Access to AI

Generative AI tools can significantly benefit businesses of all sizes. For instance, a local food catering business can use AI to create multiple ad creatives within seconds, eliminating the need to hire outside experts. AI tools can generate images of steaming plates of food, varied cuisines, and appealing combinations of dishes almost instantly.

AI also enhances business messaging. Where it once took days to respond to customer queries, AI-powered bots and assistants now do so in seconds. This is crucial for small enterprises, where each lead is highly valuable.

Collaborative Efforts for AI Enablement

AI and Generative AI present massive opportunities for MSMEs to gain traction. By strategically adopting these technologies, MSMEs can achieve early success and trigger meaningful transformation. Collaborative initiatives between industry leaders, policymakers, and technology providers will create an environment that fosters AI enablement within the MSME ecosystem.

A collaborative approach will help MSMEs navigate obstacles and unlock sustainable business growth through innovation. This techade promises to be one powered by MSMEs, driven by the transformative potential of AI tools and technologies.