Expansion of Automation in Small and Medium-Sized Enterprises
As the authors of a McKinsey Global Institute put it, “Micro-, small, and medium-size enterprises (MSMEs) are the lifeblood of economies around the world. They account for more than 90 percent of all businesses, roughly half of value added, and more than two-thirds of business employment.” Therefore, these MSMEs - which cover a range of organizations across sectors, including manufacturing - are pertinent. However, we know that they struggle to keep up with larger enterprises, often because of lack of resources. But if they were to adapt methods and tools that enhance their productivity, they could have a great impact on the larger economic ecosystem.
Integrating Automation
SMEs in particular have the opportunity to introduce changes that could shore up productivity considering the boom in manufacturing innovation that has taken place. The key to that boom has obviously been automation, which many have already started to integrate in some fashion. But for those that haven’t, starting small but smart can help. Bloomberg has projected that GenAI could grow to become a $1.3 trillion industry by 2032. So there is and will be plenty of ways available for SMEs to start their AI-enhanced automation journeys.
The opportunity exists for mid-market companies as well. While they have more resources typically than SMEs, they also lack the funds, etc. of large-scale businesses. But as automation technologies can do for SMEs, they can boost mid-market companies’ ability to scale further. This is particularly helpful in supporting expansion activities, whether that be a company looking to grow their international reach or service portfolio. As the World Economic Forum previously highlighted, “The Deloitte Mid-Market Technology Trends Report 2023 finds mid-market private companies are ‘prioritizing technology investments that reduce time to value, but they’re innovating at an incredible pace — something we haven’t seen in previous surveys.’"
Sources:
● “A microscope on small businesses: Spotting opportunities to boost productivity” - Anu Madgavkar, Marco Piccitto, Olivia White, María Jesús Ramírez, Jan Mischke, & Kanmani Chockalingam, McKinsey Global Institute
● “How Smaller Manufacturers Can Upgrade Their Tech” - Willy C. Shih and Ali Shakouri, Harvard Business Review
https://hbr.org/2023/09/how-smaller-manufacturers-can-upgrade-their-tech
● “How the AI Boom is Transforming International Expansion for SMEs” - Business Matters
https://bmmagazine.co.uk/business/how-the-ai-boom-is-transforming-international-expansion-for-smes/
● “How 6 mid-market companies are using AI to scale” - Julia Devos & Srivani Kanthi Chatti, World Economic Forum
https://www.weforum.org/agenda/2024/01/5-ways-ai-can-help-mid-market-companies-grow-faster/