The economic uncertainty caused by the pandemic was considerable, especially for smaller businesses without the resources to buffer this uncertainty. Research from Anglia Ruskin University suggests that technologies, such as AI, have played a part in helping small businesses cope with the pandemic, but that relatively few actually took advantage of them.
The researchers quizzed over 300 small and medium-sized businesses based in London and found that the use of AI-powered tools was linked with a reduction in business risk during the pandemic of over 3%.
“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 organizational performance, and lower costs,” the researchers explain.
“AI can help SMEs to adapt to unprecedented conditions, meaning they can leverage technology to meet new types of demand, move at speed to pivot business operations, boost efficiency and reduce their business risks.”
Managing risks
The pandemic created a multitude of risks for businesses, with orders either delayed, reduced, or stopped altogether, supply chains disrupted, and general challenges involved in securing adequate supplies.
The risks faced by businesses were defined according to a 60-point scale that has been developed by the International Labor Organization. The scale measures things such as staffing, profitability, partnerships, and processes.
Among the AI-based tools used by companies were chatbots to aid customer interactions, apps to spot fake reviews, and services to help improve customer targeting. The study found that by using such apps to offer more personalized service to customers, businesses were able to lower risks from the pandemic by around 2%. If AI apps were used to better target their audience online, these were linked with a 1.2% fall in the overall risk.
Sadly, just over a quarter of the small businesses surveyed by the researchers were actually using such apps, which is stark in comparison to the 70% or so of medium-sized businesses that were doing so.
“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,” the researchers explain.
“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.
“It seems investment in AI apps could be a smart move for the three-quarters of small businesses that do not currently utilize them.”
