Overcoming AI Adoption Friction Gap in Small and Medium Enterprises
Abstract
The adoption of artificial intelligence presents a strategic opportunity for small and medium-sized enterprises (SME). However, these organizations frequently struggle to translate technological investments into operational value. The business problem addressed in this study is the failure of small and medium-sized enterprises to realize the expected benefits of artificial intelligence due to a misalignment between technical capabilities, organizational readiness, and environmental constraints. The purpose of this study was to explore the subjective perceptions of business leaders regarding the factors influencing adoption decisions. Data were collected through semi-structured interviews with 10 SME leaders and analyzed using reflexive thematic analysis. The results identified four themes: technological incompatibility creates an adoption friction gap, strategic leadership mediates cultural alignment, workforce anxiety necessitates psychological reassurance, and environmental uncertainty drives defensive governance. The findings extend the technology, organization, and environment (TOE) framework by demonstrating that structural constraints cannot be resolved through software procurement alone. Business leaders must instead prioritize data architecture readiness, utilize targeted diagnostics to manage employee job replacement fears, and enforce strict human-in-the-loop oversight to navigate regulatory ambiguity.
Keywords: Artificial Intelligence, Small and Medium Enterprises, Technology Adoption, Change Management, TOE Framework, Strategic Leadership
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