As artificial intelligence (AI) continues to revolutionize industries globally, its integration into business operations is becoming increasingly essential for competitiveness and growth. However, in Greece among other countries, a significant divide is emerging between larger companies and small businesses in their access to AI technologies, despite the criticality of small and medium-sized enterprises (SMEs) which constitute 99.9% of the total number of companies (OECD), and were responsible for almost 85% of total employment in 2023 (SME Fact Sheet 2023). This divide is significantly driven by digital illiteracy among small business owners and employees, threatening to widen the gap between these two groups.
The digital divide is not a new phenomenon, but it has become more pronounced with the advent of AI technologies. According to the European Investment Bank (EIB), digital firms in Europe, and those who have embraced digital technologies, have shown better performance and resilience, especially during the COVID-19 pandemic. In contrast, non-digital firms, which include many SMEs, have struggled to keep pace.
Digital Illiteracy: The Hidden Threat to Greek SME Competitiveness
In Greece, this divide is noticeable. A significant portion of Greek SMEs remains digitally illiterate, lacking the necessary skills and knowledge to integrate AI into their business processes. Only 39% of SMEs show at least a basic level of digital intensity compared to the EU average of 55% (Hellenic Ministry of Digital Governance). This digital illiteracy is a critical barrier to innovation and competitiveness. The EIB’s 2021-2022 report highlights the fact that while larger firms are accelerating their digital transformation, smaller businesses are lagging, primarily due to a lack of digital skills and financial constraints.
The impact of digital illiteracy on Greek SMEs is multifaceted. Firstly, there is a direct correlation between digital adoption and business performance. Firms that have integrated digital technologies, including AI, are more likely to innovate, increase their productivity, and expand their market reach. Conversely, digitally illiterate firms risk falling behind, unable to compete effectively in a rapidly evolving market (MDPI ).
Moreover, the lack of digital skills within SMEs hinders their ability to leverage data analytics, automate processes, and enhance customer experiences—capabilities that are increasingly driven by AI. This gap not only affects their operational efficiency but also limits their potential for growth and adaptation in a technology-driven economy.
Financial Barriers and Support Mechanisms
Financial constraints are another significant hurdle for Greek SMEs in adopting AI technologies. The initial investment required for AI integration—covering hardware, software, and training—can be prohibitive for small businesses. Additionally, ongoing costs associated with maintenance and updates further strain limited financial resources (EIB).
Despite the challenges, there are initiatives aimed at supporting Greek SMEs in their digital transformation journey. The Greek Recovery and Resilience Plan, also known as ‘Greece 2.0’, is one such initiative. It includes provisions for digital investments and aims to deliver over EUR 1.5 billion in new financing for Greek SMEs (Greece 2.0 ). This funding is intended to enhance competitiveness, foster sustainable investments, and support the digital transition of small businesses.
Bridging the Gap: Recommendations
The operational challenges faced by SMEs in Greece, especially during economic downturns, lead to the limited adoption of digital tools and technologies due to a lack of digital literacy and financial constraints. Thus, to bridge the AI divide and address digital illiteracy among Greek SMEs, a multifaceted approach is necessary. Here are some recommendations:
- Digital Literacy Training: Implementing widespread digital literacy programs is crucial. These programs should focus on educating SME owners and employees about the benefits and applications of AI. Training should cover basic digital skills, familiarization with AI technologies, and their practical implementation in business operations.
- Financial Incentives and Support: Expanding financial support mechanisms to reduce the cost of AI adoption for SMEs is essential. This can include subsidies, grants, and low-interest loans targeted at digital transformation projects.
- Public-Private Partnerships: Encouraging collaborations between the government, private sector, and educational institutions can create a robust support network for SMEs. These partnerships can facilitate access to resources, expertise, and technologies that small businesses might otherwise find inaccessible.
- Awareness Campaigns: Raising awareness about the importance of digital transformation and the competitive advantages of AI can motivate more SMEs to embrace these technologies. Highlighting success stories and case studies can serve as inspiration and provide practical insights.
- Infrastructure Development: Improving digital infrastructure, particularly in rural and underserved areas, is vital to ensuring that all small and medium companies have access to the necessary technologies and connectivity.
The AI divide in Greece poses a significant challenge to the country’s economic progress. As larger firms continue to advance digitally, it is imperative to bring small businesses along on this journey. Addressing digital illiteracy through education, financial support, and strategic partnerships will be crucial in bridging this gap. By empowering Greek SMEs with the tools and knowledge they need to integrate AI, we can foster a more inclusive and competitive business landscape that benefits the entire economy, and supports social cohesion.
* Dr. Konstantinou is an Executive Leadership Coach and Digital Transformation Consultant. She is a Lecturer at the American College of Greece, where she teaches technology-related courses such as Technology Innovation and Entrepreneurship, and ICT in Tourism in the departments of Management Information Systems and Tourism, Hospitality and Sports of the School of Business and Economics.
