In the past decade, the UAE has emerged as a global hub for digital transformation, driven by a bold vision to diversify its economy and unlock new opportunities. At the heart of this transformation is the nation’s commitment to technological innovation, underpinned by substantial investments and a strategic push to cultivate a fertile ecosystem for artificial intelligence (AI).
Through the UAE National AI Strategy 2031, the government is positioning the country to become a world leader in AI. This agenda includes dedicated funding programs to support startups and Small and Medium Businesses (SMBs) in accessing AI tools and applications. Another initiative, the Mohammed Bin Rashid Innovation Fund (MBRIF), launched by the Ministry of Finance, provides resources and services to accelerate growth for forward-thinking businesses. Additionally, AI Labs across the country invite individuals and businesses to experiment with AI, offering workshops, mentorship programs, and partnerships with academic institutions.
According to the International Data Corporation (IDC), global spending on AI-driven technologies is projected to surpass $749 billion by 2028. This growth will be fueled by the introduction of AI agents, modernization in data infrastructure, and enhanced resilience through stringent cybersecurity measures. For SMBs, this shift offers a unique opportunity to tap into AI’s transformative potential — enhancing efficiency, productivity, and customer experience. As this technology continues to disrupt industries, SMBs stand at a crossroads. Embracing AI can drive growth and give these enterprises a secure competitive advantage, whereas delaying it might limit their potential in an increasingly AI-driven world.
Faster, smarter decisions for SMBs
While AI is no substitute for human judgment, it can serve as a powerful ally in making faster and smarter decisions. In today’s data-saturated world, traditional methods of data analysis can be time-consuming, demanding resources and manual effort. AI can analyze large volumes of data with speed and accuracy, helping SMBs extract actionable insights, make informed decisions, and stay competitive in an evolving market.
By utilizing AI-powered analytics tools, businesses can assess customer behavior, forecast market trends, and identify optimal inventory levels. This enhanced decision-making capability enables more efficient resource allocation, resulting in improved overall performance.
Supercharging operational efficiency
AI is already transforming operational efficiency across various industries. Tools like Robotic Process Automation (RPA) are streamlining inventory and supply chain management by automating manual data entry tasks, scheduling, and customer service.
One of the biggest challenges SMBs face when competing with larger enterprises is budget and resource constraints. However, the rise of accessible and cost-effective AI solutions is leveling the playing field. McKinsey’s global survey on AI found that 65 percent of respondents report that their organizations are regularly using generative AI. This surge reflects a growing trend among SMBs recognizing AI’s role in streamlining operations. Gartner predicts that by 2025, 80 percent of customer service and support organizations will be applying generative AI to improve agent productivity and customer experience (CX). For instance, chatbots can handle customer inquiries around the clock, not only enhancing response times but also freeing up staff to focus on high-impact, strategic initiatives that drive long-term growth.
By automating repetitive tasks, AI minimizes human error, reduces costs, and optimizes workforce allocation. For SMBs, this shift enables them to scale up, handle larger workloads, and achieve sustainable growth without needing to expand their teams at the same rate.
At its best, AI empowers SMBs to do more with less, fostering agility and resilience in a competitive landscape.
A step-up in customer experience
Personalized customer experiences are no longer a luxury but a necessity to drive sustained growth — a critical objective for SMBs across the globe. PwC’s global AI study finds that 45 percent of total economic gains by 2030 will come from product enhancements, stimulating consumer demand in light of AI driving greater product variety, with increased personalization, attractiveness, and affordability over time.
BCG’s research echoes this, highlighting that leaders in personalization grow revenue ten percentage points faster, achieving higher customer satisfaction scores than their peers.
Machine Learning algorithms extract patterns and provide predictive insights from large datasets, enabling SMBs to create highly personalized customer experiences that reinforce brand loyalty and drive repeat business. AI can help analyze customer data to predict preferences and tailor offers, allowing businesses to boost engagement and customer satisfaction. Tools like recommendation engines further enhance this by delivering targeted content and product suggestions. For SMBs, the ability to understand and anticipate customer needs through AI translates into higher customer satisfaction and, ultimately, increased revenue.
AI-powered Customer Relationship Management (CRM) systems further enable businesses to create targeted marketing campaigns and enhance engagement with both current and potential customers.
AI for flexible and efficient growth
AI can significantly enhance the scalability and flexibility of SMBs. As these businesses grow and their operational demands fluctuate, AI enables them to become more agile in an ever-changing market. It enables businesses to deploy resources with the current demand without the need for large upfront investments. For instance, cloud-based AI solutions offer a cost-effective alternative, providing the necessary infrastructure for AI and allowing businesses to access advanced AI without significant investments in hardware and software.
SMBs managing physical assets can deploy AI-driven predictive maintenance. For example, by analyzing data from machinery and equipment, AI can identify maintenance needs in real-time, preventing costly breakdowns and extending the lifespan of assets. This proactive approach also improves operational uptime, ensuring that resources are maximized. Additionally, AI supports risk management through a comprehensive assessment of market trends, competition, and consumer behavior, helping SMEs navigate uncertainties and make informed decisions.
Read: How the private sector can add diversity to MENA region’s workforce potential
Unlocking growth for UAE’s SMBs in the AI age
As the UAE solidifies its role as a leader in digital transformation, empowering businesses to adopt AI will be essential for sustaining this momentum. Recognizing the role of SMBs in economic resilience, the government has created a supportive ecosystem that lowers barriers and fosters innovation. Initiatives like the Dubai Industrial Strategy 2030 connect SMBs with larger enterprises and technology providers, making advanced technologies more accessible and actionable.
In a world where agility and adaptability are non-negotiable, SMBs must focus on harnessing technology to future-proof their infrastructure. AI offers a strategic advantage that goes beyond efficiency, enabling these enterprises to boost productivity, leverage predictive insights, enhance decision-making, and personalize customer experiences. The promise of scalability and the ability to leverage predictive insights further solidify AI as an invaluable ally in fostering growth.
Ultimately, the country’s forward-thinking approach to creating an AI-enabled ecosystem offers SMBs a pathway to thrive in the digital age. By shifting perspectives and using AI as a catalyst for growth rather than merely a tool, businesses can transform market challenges into opportunities. The future belongs to those who adapt, and with AI as a strategic partner, the UAE’s SMBs are poised to shape the next chapter of the nation’s economic narrative.
Esam Mahmoud is the senior vice president, Small and Medium Businesses (SMBs) at e& UAE.
