From chatbots to predictive analytics, artificial intelligence has become synonymous with modern efficiency. But while AI reshapes industries, there’s concern that its transformative power will remain concentrated in the hands of the few. Over 250 million people across the globe have embraced this technology, and over half of U.S. companies with more than 5,000 employees have fully integrated it into their everyday operations. Small business owners are also embracing the technology, with nearly 50% incorporating AI into their systems in the past year.
Despite these advances, there’s a glaring gap that needs to be addressed: the development of AI-powered tools specifically tailored to the unique needs of small business owners. And New York small businesses are no exception.
Small businesses are the backbone of New York’s economy — accounting for 99.8% of all firms and employing 47.1% of the state’s workers. On average, over 70,000 small businesses open every year and significantly contribute to our economy. And yet, as industries race toward adopting AI, New York small businesses are lagging behind, with only 3.3% integrating it into their daily operations. This isn’t mere coincidence – it’s a symptom of a broader issue: most AI tools are designed with consumers or large enterprises in mind, leaving small businesses struggling to keep pace with innovation.
This disparity is not just a missed opportunity for small businesses — it’s a missed opportunity for the AI industry as well. These entrepreneurs are increasingly turning to artificial intelligence to handle everyday tasks, from customer service to inventory management, among others. And the benefits are clear: a recent study revealed that small businesses leveraging AI could potentially save $273.5 billion annually, and 6.33 billion hours of work.
While AI has already made significant inroads into large corporations, small businesses typically operate with limited resources, both in terms of finances and personnel, and don’t have the luxury of large IT departments to implement and maintain complex systems. Small business owners wear multiple different hats — including managing their business’s taxes, marketing, vendor payments, payroll, and more. They need more tools to help them reduce hours spent managing their business’s finances, but these tools are often expensive. In fact, for more than 50% of small business owners, cost is the biggest barrier of entry to AI-enabled tools.
The Bureau of Labor Statistics projects that by 2030, jobs in AI will increase by 31.4%. From health care to finance, AI is reshaping the way we work, making processes more efficient and decision-making more data driven. Yet, without AI solutions specifically designed for small businesses, our New York enterprises risk falling further behind, unable to fully capitalize on the benefits of AI.
What we need is an influx of AI companies that don’t include small businesses as an afterthought, but as their primary market. This requires creating AI tools that are accessible, affordable, and easy to integrate. For instance, AI solutions could be developed to help small businesses optimize their supply chains, manage customer relationships and their finances, and even predict market trends – all with user-friendly interfaces without a large learning curve.
In addition to enhancing productivity for small business owners, AI has the potential to democratize access to financial solutions. Big corporations have the advantage of large teams of accountants, marketers, and logistics experts, but small businesses often have to rely on just a handful of employees to handle these crucial functions, especially in competitive markets like New York, where over 50% of businesses fail within 5 years. AI can level the playing field by helping small business owners grow their businesses without extensive education, outside help, and increased expenses.
In the same way that AI is helping large companies grow, it can also empower small businesses to become more profitable, efficient, and competitive. But for this to happen, the AI industry needs to invest in understanding the specific needs of small businesses and develop tools that are truly tailored to meet those needs.
The integration of AI into small businesses isn’t just about improving operations – it’s about ensuring that small businesses can thrive in the dynamic and fast-paced landscape that characterizes New York. As AI continues to evolve, it must not leave the small businesses that are driving our economy behind.
Lilac Bar David is the co-founder and CEO of Lili, a financial technology company.
