Artificial Intelligence Adoption and Business Performance: Evidence from Small and Medium Enterprises in Emerging Markets

Abstract

Given the seemingly widespread adoption of Artificial Intelligence (AI) by big businesses and its impact on their performance, this study investigated the performance implications of AI adoption, focusing on Generative AI and ChatBots on Customer Relationship Management (CRM) capability among Small and Medium Scale Enterprises (SMEs) in southeastern Nigeria. The study adopted a a survey research design, a structured questionnaire was distributed electronically to 371 digitally literate SME owners which constituted the sample size from a population of 11,231 SMEs across the five south-eastern states in Nigeria, with 310 valid responses analyzed using descriptive and inferential statistics, including regression analysis at a 5% level of significance. The findings revealed a notable gap between awareness and actual usage of AI tools. While SMEs demonstrate moderate awareness of Generative AI and ChatBots, practical application remains significantly low. However, the perception of their potential benefits, such as improved content creation, faster customer responses, and enhanced service delivery, is highly positive. Regression results confirmed that both Generative AI and ChatBot usage significantly and positively influence CRM capability, jointly accounting for 98.1% of the variance. The study concluded that despite low adoption rates, AI technologies hold strong potential for enhancing CRM among SMEs. To bridge the gap between awareness and usage, the study recommended increased capacity-building, subsidised access to AI tools, and integration of AI support into SME development policies. These measures can empower SMEs to leverage AI for sustained competitiveness and customer satisfaction in the digital economy.