Artificial Intelligence (AI) enabled apps helped protect small and medium-sized businesses against many of the risks that emerged during the Covid-19 pandemic, according to a study, which noted that only a quarter of small firms currently use them.
The study found the use of AI-powered apps was associated with a 3.1 per cent reduced risk to business during the pandemic.
“We found that SMEs’ business risks caused by the Covid-19 pandemic declined with the use of AI applications across a ten-item scale including marketing, sales, communication, predictions, pricing and cash flow, fake reviews, cybersecurity, recruitment, and legal services,” said lead author Professor Nick Drydakis, Director of the Centre for Pluralist Economics at the University.
“The outcomes proved true regardless of enterprise size, turnover, and years of operation, indicating that AI applications have helped SMEs to adapt to unprecedented conditions during the Covid-19 pandemic,” he added.
The Covid pandemic created risks for economies and business operations, with customers stopping, reducing, or postponing purchases, thereby affecting supply chains and resulting in difficulties in sourcing alternative suppliers.
In the study, business risks were defined by a 60-point scale developed by the International Labor Organisation’s (ILO) that measures the pandemic’s impact on staffing, processes such as working patterns, reduced profits, and threats to partnerships.
AI software utilised by businesses include chatbots to allow swift interaction with customers, apps that identify damaging fake reviews, and apps that use algorithms to improve customer targeting based on their habits, social media activities and profiles, online activities, and past transactions.
The study found the use of AI apps to offer personalised shopping suggestions was associated with 2 per cent lower business risks to profits caused by the Covid pandemic.
The use of AI apps to target audiences online was associated with 1.2 per cent lower overall business risk.
However, the research revealed that only 26 per cent of small enterprises were utilising AI applications, considerably lower than the 70.4 per cent of medium-sized businesses.
“SMEs can invest in AI technologies to track users’ habits and provide recommendations, improve customer’s purchasing decisions, search results, media communication, trade raise sales, improve organisational performance, and lower costs,” Drydakis said.