## 5 Challenges and Actionable Pathways for AI Adoption in SMEs
### Strengthening Public-Private Collaboration to Support AI Adoption
[3] emphasize the role of Gen-AI as a driver of transformation of the business model and alignment of sustainability. Recent developments in the AI industry have also increased deployment flexibility--crucial for SMEs. Although many begin by accessing Gen-AI via third-party APIs (e.g., OpenAI or Google Cloud), some eventually require full control over infrastructure for cost, compliance, or customization reasons. As adoption matures, SMEs may seek to host models on private cloud instances or even on-premise servers. The rapid emergence of high-performing open-weight LLMs, such as LLama, DeepSeek-R1, Mistral, or Falcon families, is reshaping the landscape of AI adoption. These models now offer small businesses a viable alternative to closed systems, matching proprietary performance while providing greater transparency, adaptability, control, and sustainability [121]. Open-weight models empower SMEs to fine-tune and deploy AI tools aligned with their infrastructure, compliance, and budgetary needs, making them particularly attractive for long-term integration. However, many SMEs continue to adopt Gen-AI in fragmented or exploratory ways, without embedding it into core strategic processes or innovation pipelines. Organizational readiness, ethical concerns, and the lack of digital governance practices often result in under-utilization and operational misalignment. To unlock Gen-AI's full potential, SMEs should adopt a structured and intentional approach. The following actions are recommended:  
**A. Adopt Accessible, Low-Code Gen-AI Platforms**  
Begin with intuitive, commercially available Gen-AI tools that support content creation, communication, ideation, and task automation. Low-code platforms such as Jasper, Notion AI, Copy.ai, ChatGPT, and Canva Magic Write offer SMEs immediate entry points to experiment with AI without needing specialized technical skills. These tools require minimal onboarding, typically follow a free-mium pricing model, and can be embedded into existing workflows. **B. Enhance Workforce Capabilities through Augmentation**  
Use Gen-AI to augment, not replace, human capabilities. Empower employees across departments (for example, marketing, customer service, R&D) to harness Gen-AI to write reports, generate insights, answer internal queries, or accelerate ideation. This augmentation model reinforces a _co-intelligence approach_ where AI assists, but human judgment remains central. To accelerate adoption, SMEs can introduce 'AI pilots' within departments to pilot tools and coach others. Platforms such as ChatGPT for Business, Microsoft Copilot, or Google Workspace AI integrate directly with standard office software, making the augmentation process seamless. In parallel, free and paid learning modules on platforms such as LinkedIn Learning, Coursera, or Google's AI Academy help build internal capability. **C. Align Gen-AI with Strategic and Innovation Goals**  
Integrate Gen-AI into broader strategic planning and innovation processes. Rather than treating AI as a side experiment, SMEs should embed Gen-AI into their OKRs (Objectives and Key Results), innovation roadmaps, and performance KPIs. Use cases may include trend analysis, scenario simulation, customer journey visualization, and stakeholder communication support. For example, SMEs can use Gen-AI to draft strategic memos, synthesize competitor reports, or explore \"what-if\" analyses related to product launches or market entry. Alignment with strategic goals ensures that AI investments are not just technically sound, but also business-relevant. Decision support functions such as executive briefings, sales forecasting, or risk scenario modeling are particularly impactful. **D. Leverage Small Open-Weight LLMs for Flexible and Scalable Deployment**  
For SMEs with intermediate or advanced digital maturity, small open-weight LLMs(e.g., Mistral-7B, LLAMA 3, DeepSeek-R1, Phi-2) present an attractive alternative to API-based tools.