Artificial Intelligence and Reduced SMEs’ Business Risks. A Dynamic Capabilities Analysis During the COVID-19 Pandemic. A new GLO Discussion Paper by GLO Fellow Nick Drydakis.

The new GLO Discussion Paper finds that using Artificial Intelligence enables firms to reduce their business risks during the Covid-19 pandemic.

GLO Discussion Paper No. 1045, 2022

Artificial Intelligence and Reduced SMEs’ Business Risks. A Dynamic Capabilities Analysis During the COVID-19 Pandemic  Download PDF
by Drydakis, Nick

GLO Fellow Nick Drydakis

Nick Drydakis

Author Abstract: The study utilises the International Labor Organization’s SMEs COVID-19 pandemic business risks scale to determine whether Artificial Intelligence (AI) applications are associated with reduced business risks for SMEs. A new 10-item scale was developed to capture the use of AI applications in core services such as marketing and sales, pricing and cash flow. Data were collected from 317 SMEs between April and June 2020, with follow-up data gathered between October and December 2020 in London, England. AI applications to target consumers online, offer cash flow forecasting and facilitate HR activities are associated with reduced business risks caused by the COVID-19 pandemic for both small and medium enterprises. The study indicates that AI enables SMEs to boost their dynamic capabilities by leveraging technology to meet new types of demand, move at speed to pivot business operations, boost efficiency and thus, reduce their business risks.

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