Exploring the Role of Artificial Intelligence Capabilities on Small and Medium-Sized Enterprises Growth in Nigeria

Abstract

This study examined the relationship between Artificial Intelligence (AI), innovation, employment and growth of SMEs in Nigeria. Principal component analysis (PCA) and the structural equation model (SEM) were used to examine the role of AI on SMEs growth in South West, Nigeria. The population of the study focused on SMEs firms engaging in manufacturing, hospitality, information and communication, and administrative and support services sectors. A sample size of 322 was adopted from Krejcie and Morgan research table of a population size of 2,000. Results of study showed that AI innovation indicators have positive relationship with SMEs growth. It was also observed that AI employment indicators exert a direct relationship with the latent factor. Overall results showed that applications of AI construct indicators remain (direct, indirect and total effect) strong on SMEs growth. Implications of the research results will offer a deeper insight for owners of SMEs, entrepreneurs, academic researchers and stakeholder to promote economic growth and development