AI adoption by small and medium‑sized enterprises

Artificial intelligence (AI) holds significant promise for enhancing business productivity and innovation, including among small and medium-sized enterprises (SMEs). SME AI adoption remains relatively low compared to other digital technologies and to larger firms. Canada’s 2025 G7 Presidency has made accelerating AI adoption by SMEs a key priority. This discussion paper, prepared by the OECD Secretariat at the request of the G7 Presidency, seeks to inform G7 discussions on a proposed Blueprint for SME AI Adoption. The paper examines recent evidence on AI diffusion across G7 economies, highlighting persistent gaps between SMEs and large firms. It introduces a taxonomy of SME AI adopters based on digital maturity, complexity of use, and scope of application, with a view to supporting targeted policy design aligned with firm-specific needs. Drawing on case studies from G7 countries, the paper illustrates diverse adoption pathways and identifies key enablers − connectivity; data, algorithms and compute; skills; and finance − that are prerequisites for SMEs to successfully adopt AI. The findings underscore the need for governments to accelerate AI uptake among SMEs and promote digital transformation that benefits all via differentiated support strategies.