The findings of Payoneer’s, a fintech company, latest research found that small- and medium-sized businesses (SMBs) are recognizing the need to leverage new technologies, such as artificial intelligence (AI), to be competitive in the global market.
In its second annual SMB Ambitions Barometer, it surveyed nearly 3,800 SMBs across 15 countries in early 2024 to gauge the factors critical to their growth.
“We are seeing unprecedented global growth opportunities for the world’s entrepreneurs and small businesses, who are leading a new wave of globalization,” said John Caplan, CEO of Payoneer.
Caplan also noted that SMBs are facing an ever-growing number of macro challenges and are preparing to drive efficiencies by adopting Al technologies, partnering with more vendors, and breaking into new trade corridors.
The research saw that the respondents, 46% of which are serving international markets (up by 4 points from last year), are increasingly leveraging AI and diversifying their vendor networks to support growth ambitions and navigate global challenges.
AI adoption
A significant portion of SMBs are integrating AI into various operations. Specifically, 62% are using or piloting AI for customer service, 64% for merchandising, 62% for inventory management, 62% for content creation, 64% for competition analysis, and 63% for supply chain management.
To boost their supply chains, SMBs now collaborate with an average of 29 vendors, up from 21 two years ago. This includes partnerships with law firms and marketing agencies. In the Philippines, 63% of SMBs believe a diverse vendor network shields them from global disruptions, a sentiment shared by SMBs in other regions.
SMBs are increasingly looking to expand into Europe and Central Asia, with 40% prioritizing these regions, up from 33% in 2023. The primary drivers for this expansion are new business opportunities (45%), meeting customer demand (38%), and regional proximity (37%). This shift is part of a larger trend toward trade diversification, which according to the research, is driven by ongoing trade tensions between China and North America, which complicate traditional business routes.
Local economy
Philippine SMBs, while expanding globally, are also focusing on hiring local talent, with 86% prioritizing it. This approach not only supports globalization but also strengthens local economies. Also, 93% of SMBs in the country are optimistic about increasing their revenue in the next 12 months, and 90% expect improvements in the local economy.
For Philippine SMBs, brand awareness and marketing are cited by 38% as top challenges in new markets. Despite this, 46% feel that digital transformation has eased the barriers to global market entry. However, more than 40% of SMBs overall feel unprepared for global disruptions such as geopolitical conflicts, product boycotts, and trade wars, up from 36% in 2023. Cybersecurity threats are also a major concern. Since 2023, the focus on reducing cybersecurity risks has increased by 63%, highlighting the growing awareness of digital threats.