Barriers to adopting Artificial Intelligence Technology in Small-Medium Enterprises of Pakistan

Abstract

The primary focus of this research is to study the challenges and barriers faced by Pakistani SMEs if they want to opt for technological advancement by adopting Artificial Intelligence technology within their manufacturing and business operations. In Pakistan, majority of the businesses comprise of SMEs who are still operating on conventional methods and are yet to experience the ease of doing business through automations. Therefore, in this research, it was addressed as to why SMEs are slow in adopting AI technology? Empirical research and literature on AI adoption in businesses have used the concept of TOE Framework to interpret the whole dynamics of how Technological, Organizational and Environmental factors cohesively play a role in constructing barriers for SMEs in technology adoption. However, in order to study this in-depth, a fourth factor of ‘Financial Constraints’ has been newly added in this research to study how lack of finances can play a major role in causing SMEs to become the slow adopters of robust technology like AI. This is qualitative research in which a qualitative data collection strategy was used. A list of open-ended questions was used as a helping material to conduct 20 interviews from a sample of 10 SMEs that are locally based in Pakistan. The interviewed representatives were senior executives and owners of the organizations who are generally involved in technology adoption decision. The interviews were recorded and transcribed to prepare a thorough analysis on how different factors can cause AI adoption barriers for the local SMEs