How is AI transforming small businesses in 2025?

How is AI transforming small businesses in 2025?

Artificial intelligence (AI) is no longer just an abstract technology for large companies with massive budgets; today, it can also help small businesses improve their efficiency, enhance customer experiences, and drive growth.

AI provides employees with an immense gift: time. Employees can utilize this AI gift to repurpose hours spent on low-value tasks, focusing instead on building relationships, innovating solutions, and maintaining work-life balance activities. Although AI doesn't exist as a panacea solution for business productivity, it can make an immense difference for productivity levels overall.

AI can offer many small businesses an edge. Yet, many remain wary about adopting it due to concerns about its impact on jobs or training needs, or its complexity when implemented into new systems. Leaders should remember that by adopting an approach more focused on employees' concerns and meeting them halfway, leaders can help reduce fear among employees while realizing their true potential for their businesses.

Human-centric AI requires businesses to foster an open, collaborative environment where all contributors feel welcome to contribute their thoughts. One solution may be creating agile pods where technical teams sit alongside employees from other functional areas - this way, teams can work on AI projects collaboratively while applying design thinking principles such as incorporating feedback throughout development processes.

This approach can also boost employee engagement. By creating agile pods with various business functions, employees can collaborate to develop AI solutions tailored to their specific needs, aligning with business goals while upholding key ethical considerations, including privacy, fairness, and explainability. Furthermore, taking an inclusive governance approach reduces leadership oversight of every AI solution as they can set policies and processes to monitor models for fairness, safety, and explainability while delegating some monitoring responsibilities to business units.

These human-centric approaches can also create a healthy balance between innovation and operational risk. By emphasizing collaboration, transparency, and the ability to understand what's happening with data, business leaders can develop AI tools that are more trusted and accepted by their workforce.

Successful companies use an approach to AI implementation that takes into account technological, employee, and business outcomes in equal measures. While it may be tempting for leaders to prioritize immediate operational metrics over organizational ethics concerns, achieving long-term success and ethical compliance requires taking an inclusive view.

Even with its challenges, most C-suite leaders believe they will be among the pioneers of AI. While there remain concerns regarding cost, technological progress, and measuring ROI, with AI becoming more accessible and affordable than ever, first movers could find themselves leading this charge.