Small may be beautiful, but in today’s world it is also powerful, dynamic, and full of promise. Small and medium-sized enterprises (SMEs) are the backbone of our economies —accounting for over 90% of businesses and more than 50% of global employment.
In developing countries, their impact is even more profound, providing over 70% of jobs and contributing nearly 35% of GDP, according to the International Growth Centre. Yet, despite their centrality, SMEs face persistent barriers: access to finance, the green transition, and—most urgently—digital transformation.
Digital transformation has emerged as a significant driver of long-term growth and resilience for SMEs. The adoption of digital tools enables small businesses to level the playing field, offering services and experiences once reserved for larger corporations.
SMEs posses a unique agility. With fewer decision-makers and less complex processes, they are inherently nimble—able to course correct and seize emerging opportunities faster than their larger counterparts.
This flexibility is crucial in a rapidly evolving digital landscape, where the ability to pivot can mean the difference between thriving and merely surviving.
The first internet revolution, through websites, e-commerce and social media, demonstrated how digital tools could expand global opportunities for SMEs.
Now, Artificial Intelligence (AI) tools promise an even more transformative leap—intelligent partners that will enable micro-enterprises to operate with multinational sophistication, managing global supply chains, conducting multilingual negotiations, and accessing world-class expertise, fundamentally redefining what it means to be a small business in the global economy.
To fully harness digital technologies that enable SME to thrive, the focus must be on access, capacity and policy.
The transformative power of AI: Enabling access, building capacity, demanding policy action
AI is no longer a distant promise; it is a present reality reshaping the contours of international trade and business. AI’s potential as a general-purpose technology is vast, but so are the barriers to entry. Compute power, access to data, skilled talent, and funding are concentrated in a handful of countries, leaving much of the developing world, yet again, at risk of being left behind.
Yet, the landscape is shifting. Open-source AI models – such as Mistral, LLAMA, DeepSeek are democratizing access, reducing costs, and enabling entrepreneurs everywhere to harness intelligence on par with proprietary systems. The commoditization of AI—especially lightweight models that can run on everyday devices—holds the promise of doing for digital trade what mobile phones did for e-commerce: opening new markets and opportunities for millions.
Despite these advances, the digital divide remains stark. All of Africa, for example, has less than 1% of global data center capacity and fewer than a thousand AI training chipsets, according to the U.S. International Development Finance Corporation.
Moreover, access alone is not enough. To truly harness the transformative power of AI, building capacity and cultivating knowledge must be at the center. Without the skills to understand, adapt, and innovate with these technologies, their potential will remain largely untapped.
Investing in digital literacy, technical training, and entrepreneurial education is essential—not only to empower SMEs to adopt AI solutions, but to ensure they can tailor these tools to local needs, drive homegrown innovation, and participate meaningfully in the global digital economy. In this new era, knowledge is the critical infrastructure: it is what turns opportunity into impact, and technology into inclusive growth.
Building an inclusive digital economy demands deliberate policy action and international cooperation. The Global Digital Compact, adopted by all United Nations member states in 2024, establishes a unified platform for digital cooperation and collective action. Notably, it marks the first time that comprehensive measures for the global governance of AI have been agreed upon.
This approach to governance goes beyond simply setting safeguards or guardrails — it aims to democratize access to opportunities and align technological progress with the achievement of the UN Sustainable Development Goals.
Supporting SME digital transformation is not just economic policy—it is social justice. Every $1 million loaned to SMEs in developing countries creates an average of 16.3 permanent jobs within 2 years, according to the International Finance Corporation. When SMEs have access to digital tools, compute power, and skills development, they become engines of job creation and drivers of inclusive growth.
The digital revolution and the rise of AI are not forces of nature, but choices we shape together. The future of global trade—and the prosperity of millions—depends on whether we choose to make these technologies engines of inclusion or new lines of division. The real promise of digital transformation and AI is not just making trade more efficient—it is creating entirely new possibilities for those previously locked out of global markets.
By addressing barriers in access, capacity, and policy, we can create an environment where SMEs truly thrive. Digital technologies will then become trusted companions, enabling effortless participation in local, regional, and global economies.
