Bridging the Digital Divide: AI Adoption for SMME Sustainability in Resource-Constrained Regions

Small, Medium, and Micro Enterprises (SMMEs) are essential to economic development, particularly in resource-constrained settings like South Africa’s Northern Cape. This study explores the potential of artificial intelligence (AI) and digital technologies in enhancing the resilience, competitiveness, and sustainability of SMMEs in the Northern Cape province of South Africa. Using a qualitative research approach and a phenomenological design, semi-structured interviews were conducted with representatives from ten SMME support agencies. Thematic analysis revealed key barriers to technology adoption, including limited digital literacy, high implementation costs, and inadequate infrastructure. Despite these challenges, the findings highlight the transformative potential of technologies such as predictive analytics for market trend forecasting, 3D printing for product customization, and AI-powered chatbots for enhancing customer engagement. These tools enable SMMEs to optimize operations, expand market access, and innovate despite resource constraints. The study bridges technology adoption theories, including the Technology Acceptance Model (TAM) and Diffusion of Innovations Theory, with the unique socio-economic dynamics of resource-constrained environments. The findings offer actionable insights for policymakers, support agencies, and SMME practitioners, emphasizing the critical need to address systemic barriers and foster an enabling environment for digital transformation.