Transforming Small Businesses 2025

Stage 1: Creating awareness This stage focuses on bridging the knowledge and trust gaps that most SMEs face before adopting AI. They struggle with fragmented information about AI, limited exposure to applications and a lack of skills required to operate AI systems. There are three institutional ways of resolving the issue: setting up experience centres, establishing cluster-based AI sandboxes and conducting capability-building programmes for SME entrepreneurs and workers. 1 Setting up experience centres This will provide dedicated spaces that showcase real-world use cases, sector-specific applications, success stories, peer-to-peer (P2P) collaboration systems and return on investment (ROI) demonstrations. They will effectively show why SMEs would do well to adopt AI soon. Experience centres could be cluster-based, which would allow SMEs to explore and engage with AI applications specifically tailored to their sector’s unique challenges. Every experience centre should have: –Use cases: Virtual demonstrations of AI applications in sectors of interest to SMEs such as automotive, textiles and chemicals, as well as customer-facing functions such as supply chains, production and design –Crowdsourced insights and case studies: Curated success and failure stories to inspire confidence and provide learnings –Tools and guides: Virtual tours, step-by-step implementation guides and ROI calculators that will help SMEs understand the feasibility and impact of AI solutions –P2P community forum: A platform for P2P learning, shared troubleshooting and industry networking The IMPACT AI framework for India’s SMEs has three stages: creating awareness, inspiring action and receiving recognition. –The SMEs’ operations must be self-driven, supported only where necessary by the other players in the ecosystem The aim of this framework is to give direction and structure to the efforts of different stakeholders. As such, the implementation of this framework will vary a little based on industry and cluster context. The framework is therefore flexible by design, providing broad guidance. The IMPACT AI framework for India’s SMEs has three stages that are designed to equip the country’s SMEs with AI while tackling the key challenges such as trust deficits, knowledge gaps and limited scale: creating awareness, inspiring action and receiving recognition. Together they provide a roadmap for SMEs that plan to use AI for growth, efficiency and global competitiveness, as is shown next. Three-pillar framework to accelerate AI adoption @ MSMEs FIGURE 12 Creating awareness Experience centre and AI sandbox Experience centre in SME clusters for visual demonstration of industry and function-specific AI use cases along with ROI demonstration and P2P learning Cluster sandbox for SME-focused AI solution development addressing cluster and sector needs in partnership with industry and academia Capability building through workshops and training programmes for SME promoters and workers1 2 3Recognition SME AI pioneers Recognize top SME early adopters in each cluster to inspire ecosystem, build trust for AI and provide mentorship Partner with programme anchors to identify SME AI pioneers in each cluster: Central ministries State governments Industry associations Industry players1 2Inspiring action DNA Data, network and application AI Transformation Index – Tool to assess maturity and guide the AI transformation journey AI Marketplace – Plug-and-play AI solutions (with reviews, validation benchmarks, ROI calculations, etc.) Identify alternative funding models for AI investments with support from industry players, industry bodies and government1 2 3 Transforming Small Businesses: An AI Playbook for India’s SMEs 39