Enhancing MSME Competitiveness Through AI Integration for a Sustainable Global Economic Ecosystem

Abstract

Micro, Small, and Medium Enterprises (MSMEs) play a vital role in driving national and global economic growth. However, amid rapid digital transformation and intensifying global competition, MSMEs face significant challenges in remaining competitive and adaptive. The integration of artificial intelligence (AI) into the MSME ecosystem is viewed as a strategic solution to enhance operational efficiency, market insights, and product and service innovation. This study aims to examine how AI can be effectively integrated into MSME business processes to strengthen sustainable competitiveness. Using a qualitative approach and exploratory case studies involving MSMEs in Indonesia’s manufacturing and service sectors, this research identifies relevant and affordable strategies and models for AI implementation. The findings indicate that the use of AI in customer data analytics, business process automation, and supply chain management can improve productivity and open opportunities for global market expansion. The study also identifies key challenges in technology adoption, including limited digital human resources, technological infrastructure constraints, and low digital literacy among MSME actors. The results are expected to serve as a foundation for national policies and strategies to build an inclusive and sustainable digital economic ecosystem. This study contributes by proposing an AI integration model tailored to the MSME context in developing countries, particularly Indonesia.