AI Adoption Trends for SMEs in 2024
2024 will be a fantastic year (at least in the field of artificial intelligence). We will once again see groundbreaking progress.
These trends will accompany us this year in the field of artificial intelligence, although there will certainly be a lot more to come.
As AI is a GPT (General Purpose Technology) and is therefore present in all industries, we can look forward to an exciting year with many groundbreaking changes.
In my personal opinion and research, the following 10 trends will shape the next 365 days:
1. Increased Use of Artificial Intelligence:
AI is expected to play a pivotal role in shaping the future of businesses across various industries.
SMEs can leverage AI to improve customer experiences, enhance decision-making, and optimize supply chain operations. Additionally, AI-powered predictive analytics can help SMEs anticipate demand patterns and adjust their inventory accordingly, reducing waste and improving operational efficiency. With the ability to process vast amounts of data quickly and accurately, AI can also help SMEs identify new business opportunities and untapped markets. These are just a few examples, the possibilities are almost endless.
Facts and Stats:
- According to a report by Accenture, AI has the potential to increase productivity by up to 30% in some sectors, leading to cost savings of up to $140 billion by 2025).
- According to a survey by QuantumBlack, AI by McKinsey, 70% of executives believe that AI will have a significant impact on their business within the next five years (McKinsey, 2020).
- The global AI market is projected to reach $190 billion by 2025, growing at a CAGR of 38% from 2020 to 2025 (MarketsandMarkets, 2020).
- A study by MIT Sloan Management Review found that companies that adopt AI are more likely to outperform their peers in terms of profitability and revenue growth (MIT Sloan Management Review, 2020).
- By automating routine tasks, AI can free up to 30% of employees’ time, allowing them to focus on higher-value activities such as strategy, creativity, and innovation (Accenture, 2020).
Practical Example:
A small retailer specializing in home decor products used chatbots powered by AI to provide personalized recommendations to customers. The chatbot was integrated into the company’s website and mobile app, and it used natural language processing (NLP) technology to understand customer queries and preferences. Based on the customer’s browsing history and purchase behavior, the chatbot would suggest relevant products, offer styling advice, and even assist with orders and returns.
As a result, the retailer saw a 20% increase in sales and a 15% increase in customer satisfaction ratings.
2. Emphasis on Industry-Specific Solutions:
AI-driven startups in 2024 will likely focus on developing industry-specific solutions that cater to the unique needs of different sectors. This will make it easier for non-tech companies to adopt AI technologies and realize its full potential. For instance, in the healthcare sector, AI-powered diagnostic tools help doctors diagnose diseases more accurately and quickly (Google MedPalm), while AI-powered patient engagement platforms can improve patient outcomes by enabling personalized communication and care management. Similarly, in the finance sector, AI-powered fraud detection systems help prevent financial crimes, while AI-powered investment advisors can provide personalized investment recommendations to individuals and institutions.
Facts and Stats:
- According to a recent report by PwC, artificial intelligence (AI) has the potential to contribute $15.7 trillion to the global economy by 2030. Additionally, PwC found that AI has the potential to bring a significant boost to local economies, with predictions suggesting a possible 26% increase in GDP by 2030.
- According to a report by MarketsandMarkets™, the global AI market in healthcare is projected to grow at a CAGR of 50.6% from 2020 to 2025, reaching $22.7 billion by 2025.
- A study by IBM found that AI-powered fraud detection systems will reduce false positives by up to 70%, resulting in significant cost savings and improved customer experience.
- In the finance sector, AI-powered robo-advisors are expected to manage over $1 trillion in assets by 2025, offering personalized investment advice to individuals and institutions (Business Insider , 2020).
- In the manufacturing sector, AI-powered predictive maintenance will reduce equipment downtime by up to 50%, resulting in significant cost savings and improved productivity (Accenture, 2020).
Practical Example:
A startup called Medically Home, which uses AI to enable remote patient monitoring and care coordination allows patients to receive medical care in the comfort of their own homes, reducing hospital readmissions and improving patient outcomes. Medically Home’s AI-powered platform analyzes patient data and provides real-time insights to healthcare providers, enabling them to make informed decisions about patient care. This industry-specific solution has the potential to revolutionize the way healthcare services are delivered, making it easier for patients to access high-quality care without having to visit a hospital.
3. Easy Deployment and Integration:
There will be a growing trend towards providing easy deployment and integration of AI solutions, allowing SMEs to effortlessly incorporate AI into their existing systems and processes.
For instance, cloud-based AI platforms like Google Cloud, Amazon SageMaker, and Microsoft Azure Machine Learning Studio offer pre-built templates and APIs that allow developers to easily integrate AI models into their applications without requiring extensive knowledge of machine learning algorithms.
These platforms provide scalable infrastructure, automatic model tuning, and monitoring capabilities, making it easier for SMEs to deploy and maintain AI models.
Facts and Stats:
- According to a survey by Gartner, 65% of organizations have deployed or plan to deploy AI and machine learning solutions in the cloud.
- The global AI market is expected to grow from $2.5 billion in 2020 to $19.6 billion by 2025, driven by the increasing adoption of AI solutions in various industries (MarketsandMarkets, 2020).
- A study by Deloitte found that 77% of companies believe that AI will be critical to their organization’s success within the next two years.
Practical Example:
A small retailer wanted to implement an AI-powered chatbot to handle customer inquiries and improve customer service. They chose a cloud-based AI platform that offered pre-built templates and APIs, allowing them to easily integrate the chatbot into their existing e-commerce system. The platform provided scalable infrastructure, automatic model tuning, and monitoring capabilities, making it easy for the retailer to deploy and maintain the chatbot.
As a result, the retailer saw a 30% reduction in customer complaints and a 25% increase in customer satisfaction ratings.
4. Consolidation of AI Startups:
Large enterprises will seek comprehensive platforms instead of point solutions, leading to the consolidation of AI startups.
This will result in fewer but more robust AI providers, offering end-to-end solutions for various industries.
For instance, in the healthcare sector, AI startups like Flatiron Health and Foundation Medicine were acquired by larger players like Roche and Google, respectively, to create comprehensive oncology and precision medicine platforms.
Similarly, in the financial sector, AI startups like Kensho and Quovo were acquired by larger players like S&P Global and Plaid, respectively, to create end-to-end AI-powered solutions for financial data analysis and wealth management. According to a report by CB Insights, there were 142 AI startup acquisitions in 2020, with a total disclosed value of $17.6 billion (CB Insights, 2020).
Facts and Stats:
- 70% of large enterprises consider AI as a key factor in their digital transformation strategies, driving the demand for comprehensive AI platforms (IDG, 2020).
- The global AI market is expected to reach $190 billion by 2025, with the healthcare and financial sectors being major contributors to this growth (MarketsandMarkets, 2020).
Practical Example:
A small healthcare startup developed an AI-powered platform for cancer diagnosis and treatment planning. However, they realized that they needed to expand their offerings to include data analytics and patient engagement tools to meet the demands of large hospitals and clinics. Instead of building these features themselves, they decided to partner with a larger AI provider that already had a comprehensive platform in place. The partnership allowed the startup to offer a complete end-to-end solution for cancer care, which led to increased sales and a stronger presence in the market.
As a result, the startup was eventually acquired by a larger player in the healthcare industry, further solidifying its position as a leader in AI-powered cancercare solutions.
5. Emergence of Responsible AI Practices:
With the increasing use of AI, there will be a growing emphasis on developing ethical and transparent AI practices.
SMEs will need to ensure that their AI systems are secure, unbiased, and respect data privacy.
For instance, a small retailer may use facial recognition technology to track customer demographics and tailor their marketing efforts. However, they must ensure that they obtain consent from customers before collecting their biometric data and take steps to protect the data from unauthorized access.
Facts and Stats:
- According to a survey by PwC, 85% of consumers say that they are concerned about data privacy, and 71% believe that companies should be held responsible for ensuring the privacy of their personal information.
- 60% of CEOs and 53% of employees believe that AI will have a positive impact on society, but only 37% of CEOs and 33% of employees believe that AI will have a positive impact on employment.
- The global AI market is expected to reach $190 billion by 2025, with the retail and consumer goods sectors being major contributors to this growth (MarketsandMarkets, 2020).
- 70% of organizations using AI and machine learning reported that they have experienced a breach or security incident related to these technologies (Dark Reading, 2020).
Practical Example:
A small retailer uses facial recognition technology to track customer demographics and tailor their marketing efforts. To ensure responsible AI practices, they:
1. Obtain consent from customers before collecting their biometric data.
2. Implement robust security measures to protect the data from unauthorized access.
3. Conduct regular audits to ensure that the technology is not perpetuating bias or discrimination.
4. Provide clear guidelines and training to employees on the use and protection of customer data.
5. Regularly review and update their data privacy policies to reflect changing regulations and best practices.
By taking these steps, the retailer can demonstrate their commitment to responsible AI practices and build trust with their customers, ultimately leading to increased loyalty and repeat business.
6. Enhanced Customer Experience:
AI-driven chatbots, virtual assistants, and personalized experiences will become more prevalent in 2024, enabling SMEs to improve customer satisfaction and loyalty. For instance, a carpenter company may use a chatbot to provide 24/7 customer support, helping to resolve issues and answer questions promptly.
Personalized product recommendations based on purchase history and preferences can also be made using AI, leading to increased customer satisfaction and loyalty, as already seen on enterprise platforms like Amazon & Co.
Facts and Stats:
- According to a survey by Oracle, 80% of businesses believe that personalization is important for customer satisfaction, and 77% believe that it increases customer loyalty.
- 73% of consumers prefer to do business with a company that uses personalized and tailored messaging (Epsilon, 2020).
- 63% of consumers are willing to share their personal information with companies in exchange for personalized experiences (Accenture, 2022).
- The use of AI-powered chatbots is expected to save businesses $0.50 per interaction, resulting in a total savings of $1.3 billion globally by 2024 (Juniper Research, 2023).
Practical Example:
A small retailer uses a chatbot to provide 24/7 customer support and personalized product recommendations. The chatbot is integrated with the company’s CRM system, allowing it to access customer purchase history and preferences. Customers can interact with the chatbot via messaging apps, such as Facebook Messenger or WhatsApp, making it convenient and accessible. The chatbot also includes a feature that enables customers to rate their interactions, providing valuable feedback to the retailer.
By using the chatbot, the retailer sees a 30% reduction in customer support requests and a 25% increase in customer satisfaction rates.
7. Supply Chain Optimization:
AI already plays a critical role in optimizing supply chain operations, including demand forecasting, inventory management, and logistics. SMEs can collaborate with AI solution providers to achieve greater supply chain resilience and efficiency.
Facts and Stats:
- According to a report by McKinsey & Company, AI-enabled supply chain optimization can lead to a 15% to 20% reduction in inventory costs and a 5% to 10% improvement in operational expenses.
- 79% of companies view supply chain visibility as crucial or very important, yet only 29% have achieved full visibility across their supply chains (DHL, 2021).
- 67% of supply chain professionals believe that AI will have a significant impact on supply chain management in the next five years (APICS, 2020).
- The global AI in the supply chain market is projected to reach $15.3 billion by 2027, growing at a CAGR of 48.3% between 2020 and 2027 (MarketsandMarkets, 2023).
Practical Example:
A small manufacturer of customized furniture uses AI-powered demand forecasting software to predict future demand and optimize production levels. The software takes into account historical sales data, seasonality, and external factors such as economic indicators and weather patterns. By using AI-powered software, the manufacturer can reduce inventory costs by 20% and minimize waste. The manufacturer also uses AI-powered logistics software to optimize delivery routes and schedules, resulting in a 15% reduction in transportation costs. O
The use of AI-powered solutions helps the manufacturer achieve greater supply chain resilience and efficiency, leading to increased profitability and competitiveness in the market.
8. Cybersecurity Strengthening:
AI will be used in cybersecurity solutions to improve threat detection, real-time response mechanisms, and proactive defense strategies, ensuring that business data and infrastructure remain safe.
Facts and Stats:
- According to a report by MarketsandMarkets, the global AI in cybersecurity market is projected to reach $30.7 billion by 2027, growing at a CAGR of 31.3% between 2020 and 2027 (MarketsandMarkets, 2020).
- 67% of organizations have experienced a cyber attack in the past year, with 48% experiencing multiple attacks (Ponemon Institute, 2020).
- The average cost of a cyber attack for businesses is $200,000, with 71% of attacks targeting small businesses (Ponemon Institute, 2022).
- 73% of cybersecurity professionals believe that AI-powered cybersecurity solutions are effective in detecting and preventing cyber attacks (ESG, 2022).
Practical Example:
A business owner uses an AI-powered cybersecurity tool to monitor network traffic and detect potential threats in real time. The tool analyzes vast amounts of data quickly and accurately, identifying patterns and anomalies that could indicate a cyber attack. When a potential threat is detected, the tool sends an alert to the business owner and IT team, allowing them to take immediate action to prevent the attack. Additionally, the tool provides proactive defense strategies, such as automatically updating firewalls and antivirus software, to prevent future attacks.
With the AI-powered cybersecurity tool, the business owner can protect sensitive data and infrastructure from cyber threats, ensuring the continuity and success of the business.
9. Predictive Maintenance:
AI-powered predictive maintenance will become more widespread, enabling SMEs to anticipate equipment failures, reduce downtime, and lower maintenance costs.
Facts and Stats:
- According to a report by MarketWatch, the global predictive maintenance market is projected to reach $12.3 billion by 2027, growing at a CAGR of 23.6% between 2020 and 2027 (MarketWatch, 2020).
- 70% of industrial equipment failures are preceded by warning signs, such as vibration, temperature, and pressure changes (PdMA, 2023).
- Predictive maintenance can reduce maintenance costs by up to 30%, extend asset life by up to 20%, and reduce downtime by up to 50% (PwC, 2023).
- 82% of companies that have implemented predictive maintenance report improved equipment reliability, and 77% report reduced downtime (PwC, 2020).
Practical Example:
A small manufacturer installs AI-powered sensors on their machinery to monitor its condition and predict when maintenance is required. The sensors detect unusual vibrations in one of the machines and send an alert to the maintenance team, who investigate and identify a potential issue before it causes a breakdown. The maintenance team then schedules a routine maintenance check during a slow production period, reducing downtime and avoiding costly repairs.
By using AI-powered predictive maintenance, the manufacturer reduces unexpected breakdowns and lowers maintenance costs, improving overall equipment reliability and productivity.
10. Personal Skills Development:
In addition to technical skills, AI can also help individuals develop their skills, such as communication, problem-solving, and decision-making.
AI-powered virtual coaches already provide personalized guidance and feedback to help individuals improve their public speaking skills.
Facts and Stats:
- According to a study by the University of California, Berkeley, AI-powered virtual coaches were found to be as effective as human coaches in improving public speaking skills (UC Berkeley, 2020).
- 71% of employees believe that AI will enhance their job roles, while 63% believe that AI will enable them to focus on more creative tasks (PwC, 2022).
- 50% of the existing workforce will need to retrain and upskill in the next five years due to the impact of automation and AI (World Economic Forum, 2022).
Practical Example:
An individual named Sarah wants to improve her public speaking skills but struggles with anxiety and self-doubt. She decides to use an AI-powered virtual coach that provides personalized guidance and feedback. The virtual coach uses machine learning algorithms to analyze Sarah’s speech patterns, body language, and tone of voice and provides specific suggestions for improvement. With the help of the virtual coach, Sarah feels more confident and prepared for her presentations and has noticed a significant improvement in her public speaking skills over time.
By leveraging AI technology, Sarah can overcome her fears and develop her skills, which has a positive impact on her professional life and overall well-being.
In summary, AI adoption trends for SMEs in 2024 will revolve around the implementation of industry-specific solutions, ease of deployment, consolidation of AI startups, responsible AI practices, enhanced customer experience, supply chain optimization, cybersecurity strengthening, predictive maintenance, and skills development. By embracing these trends, SMEs can gain a competitive edge, streamline their operations, and foster long-term growth.
These trends should encourage you to identify your position as a company/entrepreneur and create clear plans to guide you on how you will use AI to optimize and strengthen your business against the competition.
If you don’t know where to start, I recommend an AI consultation with me.
Within a short period, we will have a clear picture of how your company can use AI to its maximum advantage.
With best regards from beautiful Vienna,
