EMPOWERING SMALL BUSINESSES IN INDIA THROUGH DIGITAL TRANSFORMATION: THE ROLE OF AI AND DATA-DRIVEN INSIGHTS

Abstract

Adopting digital transformation has become a crucial strategy for Indian small businesses seeking to
enhance customer engagement, competitiveness, and operational efficiency. This study examines how digital tools
and artificial intelligence (AI) are driving the desired change. Through an analysis of data gathered from 500 small
firms across various industries, the study identifies key factors that promote, hinder, and result from digital
adoption. To extract valuable information, statistical techniques, including Factor analysis, ANOVA test and
descriptive statistics, were used. Results show that companies are using AI for predictive analytics, consumer
interaction, and inventory management. Issues like financial limitations and a lack of computer knowledge are
brought to light. To close the digital divide, the report emphasises the need for capacity-building programs and
government support.