A new study has found that artificial intelligence (AI) apps helped protect small and medium-sized businesses from many of the risks that emerged during the COVID-19 pandemic – yet only a quarter of small businesses currently use them .
The research, conducted by Anglia Ruskin University (ARU) and published in the journal Boundaries of information systems, surveyed 317 small and medium-sized enterprises based in London. The study found that the use of AI-powered apps was associated with a 3.1% reduced risk to business during the pandemic.
The COVID-19 pandemic has created risks to economies and business operations where customers have stopped, reduced or postponed purchases, which has affected supply chains and resulted in difficulties in finding alternative suppliers.
Business risks were defined by a 60-point scale developed by the International Labor Organization (ILO), which measures the impact of the pandemic on personnel, processes such as work patterns, reduced profits and threats to partnerships.
AI software used by companies includes chatbots to allow fast interaction with customers, apps that identify malicious 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 that the use of AI apps to offer personalized purchasing proposals was associated with 2% lower business risks for profits caused by the COVID-19 pandemic. The use of AI apps to target audiences online was associated with 1.2% lower overall business risk.
However, the survey revealed that only 26% of small businesses used AI applications, significantly lower than the 70.4% of medium-sized businesses.
Lead author Professor Nick Drydakis, Director of the Center for Pluralistic Economics at Anglia Ruskin University, said: “SMEs can invest in AI technologies to track user habits and make recommendations, improve customer purchasing decisions, search results, media communications, trade increase sales, improve the organizational performance and lower the cost.
“AI can help SMEs adapt to unprecedented conditions, meaning they can leverage technology to meet new types of demand, move quickly to turn business around, increase efficiency and reduce their business risks.
“We found that SMEs’ business risks caused by the COVID-19 pandemic decreased with the use of AI applications across a ten-element scale, including marketing, sales, communications, predictions, prices and cash flows, false reviews, cybersecurity, recruitment and legal services.
“The results proved to be true regardless of the company’s size, revenue and year of operation, indicating that AI applications have helped SMEs adapt to unprecedented conditions during the COVID-19 pandemic.
“It seems that investing in AI apps could be a smart move for the three-quarters of small businesses that do not currently use them.”