Leveling the Playing Field: How Generative AI is Revolutionizing SMEs and MMEs in India

As small and medium-sized enterprises (SMEs) and mid-market enterprises (MMEs) become pivotal to economic growth, industry leaders like SAP report that a substantial portion of their business revenue—up to 80 percent—comes from this sector, highlighting the growing importance and potential of these businesses in the global market. In light of this, concerted efforts from industry associations like NASSCOM are crucial in equipping these enterprises with advanced technologies such as generative AI, ensuring they remain competitive and innovative in a rapidly evolving digital landscape.

In an exclusive interview with Srikanth Srinivasan, Vice President & Head – Membership & Outreach at NASSCOM, we explore how generative AI is reshaping the operations of SMEs in India, democratizing access to technologies that were once the preserve of larger corporations. This conversation delves into the initiatives aimed at enhancing the adoption of AI technologies, addressing ethical concerns, and ensuring a skilled workforce to harness these advanced tools effectively.

How is generative AI influencing SME operations in India, especially in terms of automation, cost, and access to advanced analytics?

Today, generative AI and AI technologies are no longer exclusive to just a handful of large companies. The landscape has evolved into a more democratic setup, making these technologies widely accessible in an open-source environment. This shift has particularly benefited SMEs by making advanced tools readily available to them. SMEs are leveraging these technologies primarily to boost productivity, improve customer experiences, and accelerate their time to market. These advantages are helping them utilize AI effectively across various aspects of their operations.

SMEs are leveraging these technologies primarily to boost productivity, improve customer experiences, and accelerate their time to market.

Are SMEs seeing significant impacts from implementing generative AI?

In most instances, it’s clear that many organizations are still experimenting with AI, largely within the proof of concept (POC) phase. They are engaging in multiple POCs, both internally and with customers, to explore the potential impacts of AI. Initial feedback from these organizations is overwhelmingly positive, with noticeable improvements in efficiency and productivity, which in turn boosts customer satisfaction. While not many have fully implemented these technologies into live projects yet, several are advancing through various stages of POCs and trials. Some are in the early stages, while others are more developed, but a significant number have already begun to harness these capabilities.

Could you discuss NASSCOM’s initiatives to make generative AI tools more accessible to SMEs?

I would link this closely with our overall strategy for skilling because, when you look at it, the availability of a tool and the skills needed to use it are interconnected. Being skilled is essential to effectively use a tool; they are essentially two sides of the same coin. At NASSCOM, we ensure that tools are easily accessible to everyone. As I mentioned earlier, we operate in a democratic, open-source environment where these tools are not only readily available but also affordable since they’re cloud-based.

We continuously engage with our members to see how we can better support their productivity and growth strategies. A common theme in these discussions is the need for skill development in AI, regardless of an individual’s role within the organization. In response, we’ve taken two major initiatives. First, we offer a range of courses on AI and generative AI through our Future Skills platform, which provides various learning paths for members to enhance their capabilities. Second, we’re launching a multi-city SME AI enablement program next week. This program will be conducted in major cities across the country where we have a significant tech and SME presence.

The program spans two days. The first day offers a broad overview of how AI can be utilized to enhance productivity and other business aspects – a broad sensitization -- aimed primarily at SME leaders—those who are promoters or senior figures in their organizations. On the second day, we shift focus to a smaller, more focused group of actual practitioners. This session will include hands-on workshops where participants can directly engage with AI tools, guided by experienced industry professionals. This practical approach aims to help attendees apply what they’ve learned directly to their work.

A common theme in these discussions is the need for skill development in AI, regardless of an individual’s role within the organization.

How important is the human element in the integration of AI within SMEs?

Regarding your question about the human element, I see it as somewhat distinct from the training focus of our sessions. The ‘human in the loop’ concept is vital for enhancing AI’s overall efficiency and effectiveness over time. While AI tools can perform tasks and make decisions, they require human intelligence to learn and adapt. For instance, if an AI system compares two sets of data—say, airfares or hotel rates—it might not always make the most relevant comparisons. What looks comparable to the machine might not align with human judgment. That’s where human oversight becomes crucial. By involving humans in the process, such as through random sampling and critical adjustments, we can ensure the data is refined and the model’s accuracy improves over time. This iterative process of refinement, supported by human insight, helps enhance the AI model’s utility and effectiveness.

What actions is NASSCOM taking to address ethical concerns in AI usage, such as bias and job displacement?

We are completely cognizant of the ethical concerns associated with AI technologies and take these issues seriously. In collaboration with industry experts, we’ve developed and released guidelines on responsible AI. These guidelines, which include best practices and strategies to mitigate biases and other potential issues, are readily accessible to all our members through our community platform.

In our workshops, while we may not delve deeply into every aspect, we ensure participants are aware of both the benefits and the potential pitfalls of AI. Our focus is on sensitizing them to be vigilant and proactive in their use of AI, essentially keeping their eyes and ears open to both opportunities and risks.

What do you see as the most exciting potential application of Gen AI for SMEs?

The greatest potential lies in leveling the playing field for SMEs in terms of access to technology. The primary goal for SMEs is growth, which presents itself as their biggest challenge, largely due to resource constraints. These resources include both financial means and human talent. With the advent of new technologies, SMEs now find it easier to access these essential tools, giving them a competitive edge and the potential for sustainable growth. Early adopters of such technologies are particularly well-positioned to enhance productivity, achieve cost savings for their clients, and respond more swiftly to market demands, thus improving customer satisfaction.

This technological leverage is crucial for SMEs to outperform competitors. Most SMEs are unlikely to develop their own models due to financial and time constraints; instead, they will utilize existing models, customize them with their own data, and refine processes to accelerate their market response. This strategic use of technology is pivotal in driving their growth and efficiency.

We’re launching a multi-city SME AI enablement program this month. This program will be conducted in major cities across the country where we have a significant tech and SME presence.

Any closing thoughts on the role of generative AI in empowering SMEs?

I would emphasize that this is an excellent opportunity for SMEs, as it’s a pivotal moment where they can level the playing field with larger corporations due to better access to technology. The key is to seize the early mover advantage by rapidly adopting new technologies and enhancing skills across their teams. It’s not just about having good intentions; it’s about turning those intentions into action. This means training staff, engaging proactively with technology and initiating discussions with potential clients. By focusing on achievable goals and capturing quick wins, SMEs can experience early success. These initial victories are essential, as they set the stage for sustained growth and can catapult them to the next orbit of development and expansion.

Srikanth Srinivasan

Vice President & Head – Membership & Outreach, NASSCOM

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