Determinants of AI Adoption among Small and Medium Enterprises in Jaffna, Sri Lanka

Abstract

In this digital era, artificial intelligence (AI) has emerged as one of the critical tools for boosting innovation, productivity, and competitiveness in the global market. In that context, the present study aims to analyse the key determinants influencing the adoption of artificial intelligence among Small and Medium Enterprises operating in Jaffna, Sri Lanka. Therefore, the researcher employed the framework Technology Organisation-Environment (TOE) to give a clear picture of the factors influencing AI adoption among small businesses in Jaffna. The present study is based on a cross sectional time horizon, capturing the current state of AI adoption and its determinants at a single point in time. In that context, data were collected from 150 Small and Medium Enterprises owners through a structured, self-administered questionnaire based on a 5-point Likert scale. The data collected were analysed by the SPSS software package using statistical analysis, including reliability analysis, descriptive analysis, the Shapiro-Wilk test, Pearson correlation, and multiple linear regression analysis. The findings of the study proved that technological readiness, perceived usefulness, and organisational innovativeness have a positive impact on AI adoption, while financial constraints negatively influence AI adoption by SMEs in Jaffna. In that context, the present study contributed to policymakers, technology providers, and small business owners in formulating strategies that foster AI adoption. Further, it is recommended to conduct future research by exploring longitudinal impacts and the role of external support mechanisms in enhancing technological uptake among small businesses.