AI Adoption Barriers in SMEs Analyzing Through the Technology Organization Environment TOE Framework

Syahidun; Eko Susetyono; Alfri Adiwijaya; Muchlisina Madani; Yasir Mustafa Kareem

doi:10.33050/h6qyfk21

Authors

Syahidun Mercu Buana University Author
Eko Susetyono IPB University Author
Alfri Adiwijaya University of Raharja Author
Muchlisina Madani REY Incorporation Author
Yasir Mustafa Kareem Eesp Incorporation Author

DOI:

https://doi.org/10.33050/h6qyfk21

Keywords:

Artificial Intelligence (AI), TOE Framework, SMEs, Innovation, Digital Transformation

Abstract

Artificial Intelligence (AI) has become a key driver of innovation, improving efficiency, decision-making, and competitiveness in businesses worldwide. However, the adoption of AI tools among Small and Medium Enterprises (SMEs), especially in developing countries like Indonesia, remains limited. This study aims to explore the barriers hindering AI adoption in SMEs in Indonesia using the Technology Organization Environment (TOE) framework. A survey was conducted among Indonesian SMEs across various sectors to capture their perceptions regarding AI implementation. The survey focused on technological, organizational, and environmental factors that influence AI adoption. The findings reveal that technological barriers, such as high implementation costs and system complexity, are significant challenges for SMEs. Organizational barriers, including limited digital literacy, a lack of skilled workforce, and resistance to change, also hinder AI adoption. Furthermore, environmental barriers like insufficient government support, regulatory uncertainty, and low market pressure constrain SMEs' adoption readiness. This study extends the TOE framework to the context of AI adoption in SMEs in developing economies. Addressing the identified barriers is essential for accelerating digital transformation and enabling SMEs to leverage AI for sustainable growth in the digital economy.

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