Artificial Intelligence (AI) is no longer a futuristic concept for small and medium-sized enterprises (SMEs) in emerging economies—it’s already reshaping how they design, produce, and compete. But a new study warns: technology alone isn’t enough. Published in Data Science and Management, the study analyzed how AI adoption influences innovation in Pakistani SMEs. While firms that adopted AI saw tangible gains in product development and operational processes, the benefits only materialized when three elements aligned: leadership commitment, digital readiness, and competitive drive. “Placing AI tools in an SME without strategic backing is like installing solar panels in the shade,” said Dr. Haq, the study’s lead author. “It’s leadership that sets the direction—and organizational readiness that makes the path walkable.”

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