AI-Driven Business Model Innovation and TRIAD-AI in South Asian SMEs: Comparative Insights and Implications

Artificial Intelligence (AI) is a transformational force reshaping business processes, financial decision-making, and enabling firms to create, deliver and capture value more effectively. While large corporations in South Asian countries, particularly Bangladesh, India, Pakistan and Sri Lanka have started leveraging AI to drive Business Model Innovation (BMI), Small and Medium Enterprises (SMEs) continue to face significant challenges. These include limited infrastructure, poor bandwidth penetration, unreliable electricity, weak institutional capacity and governance immaturity, along with ethics and compliance concerns. These challenges hinder SMEs from fully exploiting AI-driven BMI and reduce their financial resilience and competitiveness in increasingly digital and globalised markets. This paper examines how South Asian countries are adopting AI technologies in SMEs by comparing patterns and variations in adoption, capability, ethics, risks, compliance, and financial outcomes. The paper proposes a tailored, actionable framework, called TRIAD (Target, Restructure, Integrate, Accelerate, and Democratise)-AI, designed to address technical, organisational and institutional challenges that shape AI-driven BMI across South Asian SMEs and to meet regional and global SME needs. The framework integrates the best practices from global AI leaders such as China, Estonia and Singapore, emphasising responsible AI adoption through robust ethics and compliance standards, and risk management, and offering practical guidance for South Asian SMEs. By adopting this framework, South Asian countries can gain a competitive advantage, enhance operational efficiency, support GDP growth across the region and ensure adherence to all relevant international AI standards for responsible, sustainable, and financially sound innovation.