Artificial Intelligence adoption in South African SMEs: Challenges, Opportunities and gaps in research

The adoption of digital technologies has gained momentum across both large and small organizations. This trend has been facilitated by the need for innovative and sustainable production. Compared to larger organizations, the adoption of digital technologies in Small and Medium Enterprises (SMEs) including Artificial Intelligence (AI) has been relatively low in developing countries, and South Africa is not an exception. Previous research reveals the slow adoption of AI in South African SMEs. Thus, this study reviews existing literature to explore the challenges to the adoption of AI in South African SMEs. Findings reveal that organizational, technological and environmental factors can present opportunities or challenges to the adoption of AI in South African SMEs lending support to the Technology-Organization-Environment (TOE) model. Inadequate digital infrastructure, inadequate technical skills, financial constraints and resistance to change are identified as key obstacles to the adoption of AI in South African SMEs. The study recommends that SMEs strengthen their organizational and technological factors including employees’ technical competencies, top management commitment, digital infrastructure, financial resources and innovative culture to enhance AI adoption. Furthermore, government interventions in areas of digital infrastructure, digital skills development and innovation funding can promote AI adoption in South African SMEs. Nevertheless, future research should include rural SMEs and SMEs in diverse sectors such as retail, agriculture, healthcare, logistics and e-commerce to gain nuanced insights AI adoption in South African SMEs across diverse sectors.