How AI Boosts Growth and Productivity for European SMBs

How AI Can Act as a Force Multiplier for European SMBs

Business leaders expect artificial intelligence (AI) to boost growth by improving efficiency and productivity. While global enterprises often dominate AI conversations, small- and medium-size businesses (SMBs) represent a massive collective force. In Europe, SMBs make up 99% of businesses and employ over 77 million people. Globally, there are around 400 million SMBs, forming the backbone of many economies.

If AI adoption accelerates across these companies, it could create a powerful multiplier effect, boosting productivity and economic growth worldwide.

Understanding Productivity Dynamics

Helping SMBs adopt AI benefits more than just individual businesses—it impacts overall GDP growth. The International Monetary Fund (IMF) reports that advanced economies could see cumulative GDP gains of up to 35% by prioritizing AI innovation and integration.

Currently, 90% of SMBs using AI report productivity improvements. According to McKinsey, 75% of generative AI’s (GenAI) value lies in four areas: customer operations, marketing and sales, software engineering, and research and development (R&D). Except for software engineering, the other three are core functions for any business size.

GenAI helps scale creative and operational processes, like customer support. Increased productivity in sales, marketing, and customer operations frees up resources to invest more in R&D, which can lead to new products or finding new customer segments. This cycle supports growth and business stability.

AI also improves efficiency, which positively impacts economies. Although there are concerns about AI’s impact on jobs, higher productivity in SMBs tends to drive company growth, increased spending, and more job opportunities overall. PwC’s annual survey found 82% of CEOs reported AI either increased or did not change headcount.

AI transforms how companies apply intelligence, creating opportunities for new business models and value. It allows smaller companies to operate beyond their traditional limits.

AI Improves Engineering Productivity

Software engineering is a key area where AI has shown clear benefits. A study involving over 100 software engineers found that GenAI not only boosted productivity but also improved collaboration and global teamwork.

The results included a 70% reduction in task completion time for code updates and a 48% reduction for senior engineers. This freed up time for mentoring, which increased engagement by 70%. Simplifying repetitive tasks and fostering collaboration contributes to a more fulfilling work environment.

While this study focused on software engineering, similar productivity gains can be expected across many SMB operations. Intelligent engineering, powered by data and AI, can significantly improve performance and job satisfaction.

Encouraging AI Adoption in SMBs

Implementing AI can be challenging, especially for SMBs. Over half (53%) of SMBs report initial AI costs are higher than expected. Strong leadership support is crucial to drive adoption, provide access, and overcome infrastructure challenges.

Support can come through regional grants, education, and peer networks. Helping SMBs adopt AI more quickly will improve their productivity and accelerate the positive multiplier effect on economies.

Operations professionals can play a key role in guiding their companies through AI adoption by focusing on practical steps and clear outcomes. For those interested in building AI skills, Complete AI Training offers courses tailored to different skill levels and job roles.

Conclusion

AI’s potential to boost productivity and growth is significant, especially when applied across the vast network of SMBs. Rather than focusing only on large enterprises, it’s essential to support SMBs in embracing AI to drive efficiency, create jobs, and contribute to economic progress.