AI and the Economy: A Review of the Evidence and the SME Research Gap

Small and medium-sized enterprises (SMEs) form the backbone the economy, yet little is known about how generative artificial intelligence (GenAI) and broader AI technologies will shape their future. This review brings together insights from economics and management to examine the impact of AI adoption on both the wider economy and SMEs. Drawing on recent empirical studies, the paper first synthesises evidence about AI’s effects on individual performance, creativity, productivity, and inequality.

The review then turns to SMEs. It summarises emerging work on GenAI in SMEs, highlights factors that support or hinder adoption and performance, and calls attention to gaps in the evidence: there are few studies on mature adoption, sectoral differences, or the social, ethical and environmental implications of AI in SMEs. By highlighting these gaps and offering a cross-disciplinary synthesis, this paper provides a foundation for future research and practical guidance for policymakers and SME leaders.