Transforming Small Businesses 2025

To conclude, the IMPACT AI framework for SMEs can be rolled out in a phased manner. Initially, the awareness campaign along with experience centres and sandboxes can mobilize SME clusters and introduce the initiative’s modalities. Following that, SMEs will participate in online self-assessment to evaluate readiness. A panel of experts can guide these SMEs towards their path to digital maturity. Capability-building programmes can bridge the knowledge gaps and ensure successful implementation. Finally, the AI pioneer cohort will be unveiled, with events, strategy workshops and exploratory visits, ensuring that all the knowledge generated by the execution of the framework is shared by the SME ecosystem. Stage 3: Receiving recognition Early recognition is essential for AI adoption by SMEs. It serves as a beacon of inspiration, demonstrating the tangible benefits of AI while building trust. An SME pioneer programme will address a critical visibility and awareness gap in AI adoption by recognizing and showcasing early adopters and evangelists in India. Creating such a programme is essential; SMEs face barriers such as lack of trust, awareness and access to scalable AI solutions. By recognizing the early adopters, the programme will accelerate digital transformation and build credibility for AI. The AI pioneer programme will be anchored by central ministries, state governments, industry associations and industry clusters with the objective of identifying SME AI pioneers in each SME cluster. Given that each industry cluster will have distinct high-impact AI use cases, a given number of AI pioneers can be identified from each industry cluster. This will promote an AI-enabled ecosystem in which these small businesses serve as role models for other SMEs. The effort can further be aligned with the World Economic Forum’s MINDS initiative, enabling global recognition for SME pioneers. CASE STUDY 5 Precision Engineering and Technology Centre (PETC), Chennai The Precision Engineering and Technology Centre (PETC) in Chennai is a not-for-profit public–private initiative established to accelerate the growth of MSMEs in the precision engineering sector. Through a unique funding model – 70% capital support from the Government of Tamil Nadu and 30% contribution from member MSMEs – PETC enables resource pooling for shared access to high-end infrastructure. Participating MSMEs become part owners of the centre, ensuring services remain aligned with their needs. PETC houses a range of advanced facilities, including a product design centre, a re-engineering lab, 3D metal and plastic printers, a mechanical testing lab and a patent facilitation centre.By offering access to cutting-edge tools and expert support, PETC significantly reduces the cost and risk of innovation for small enterprises. It empowers MSMEs to undertake complex design, prototyping, and testing projects that would typically be out of reach for individual firms. The centre also conducts training programmes to upskill the local workforce, creating a comprehensive ecosystem that promotes collaboration, innovation and competitiveness within the manufacturing sector. Transforming Small Businesses: An AI Playbook for India’s SMEs 44