Published 09/23/24
Submitted by MasterCard
Originally published by the Mastercard Center for Inclusive Growth
Given that Colombia is the second-largest coffee exporter, Azahar Coffee’s mission may seem a little counterintuitive: to keep as many Colombian beans in Colombia as possible. The justification? Colombians also deserve to drink the best coffee.
As a small business built on a reputation for dishes that are both trendy and fresh, Azahar must stay on the cutting edge to compete in a growing market. The use of artificial intelligence (AI) could help, giving the cafe a way to use its own data to make smarter, more effective business decisions. For example, by analyzing the number of sandwiches sold per day, the company could eliminate waste by purchasing only the amount of bread needed that day. Knowing which tables are busiest and at what times could improve staffing, and analyzing how many people prefer oat milk to cow’s milk could help refine dairy inventory.
This type of tool is already adopted by large organizations. According to a recent studyaround 42% of companies with more than 1,000 employees have already deployed AI to help their business. But obstacles remain for small businesses that don’t have the time or money to hire AI experts and develop their own technology. To truly democratize AI, we need to find ways to make these tools more accessible to small businesses so they can compete in an evolving technology landscape.
Small businesses will need customized solutions that are easy to use and accessible. Here are three that are currently being developed with the support of Mastercard strive.
Create chatbots to leverage data
Azahar is part of a pilot program of Data sketcha small social technology company that democratizes data science to fight social inequality.
The program brings chatbot-based AI to small businesses in Bogotá. Existing data analytics services are out of reach for Bogotá’s 50,000 independent stores and restaurants, which could benefit from using AI to simplify their data and improve their decision-making.
For years, these companies have faced a daunting challenge: how to harness the power of their data with limited resources. The local coffee shop or local store often relies on gut instinct, basic spreadsheets, or incomprehensible reports from the various digital platforms they use. Datasketch’s chatbot generates the insights small businesses need to take themselves to the next level by working with models trained exclusively on a small business’s own data.
“If you’re a small business, you may have one software for payments, another for accounting, and another for online sales,” says JP Marin Diaz, founder of Datasketch. “We’re able to take that data and add an AI chatbot interface to it so they can ask questions about their business in a simple way and get an answer based on the company’s data.”
For example, a manager of one of the Azahar cafes might ask: “How much milk should I buy for next week?” » and get a simple answer based on complex analyzes of cafe traffic, local preferences and seasonal sales. The tool gives Azahar and other small Colombian businesses a way to compete with larger companies using the latest technology.
Empower community business coaches with faster data insights
Building new ways for small businesses to use advanced data science can even have a ripple effect, improving the prospects of an exponential number of entrepreneurs. Take Community Reinvestment Fund, United States (CRF), for example, which provides loans and technical solutions to help community finance organizations better support and grow the small businesses they serve.
In Chicago, CRF works with Allies for Community Business (A4CB), which provides the capital, mentoring and connections entrepreneurs need to grow stable businesses, which in turn create jobs and wealth in their communities. The partnership brings better information to the small business owners they work with.
CRF OutlookFIU’s latest technology innovation, allows A4CB advisors to sit down with small business owners and, in one minute, build a snapshot capturing two years of financial performance and health trends. Typically, this process can take up to two weeks and require manual collection of financial statements, followed by data entry and modeling. CRF tools use open banking to automate this process, pulling financial data from multiple sources (bank accounts, payment systems, etc.) to present all information in a single, easy-to-read dashboard.
Coaches then use this information to help businesses set goals and benchmarks that can be tracked and measured over months and years. The system also responds to insights provided by the data, with the ability to provide nudges and alerts to the coach. For example, the platform can help advisors assess the impact of a marketing campaign or respond to peaks in demand and suggest actions such as a line of credit for inventory needs.
We shouldn’t expect small business owners to be data scientists. We need to create products and services for small business owners that help them make sense of their data, make better decisions, connect to resources at the right time, and better manage the overall financial performance of their business .
Patrick Davis
Senior Vice President, Technology and Platform Services, Community Reinvestment Fund
Helping small businesses compete on sustainability
It is becoming increasingly clear that for small businesses to compete on the bigger stage, they will need to be able to measure and report their ESG (environmental, social and governance) risks, opportunities and impacts. This may lead to new business opportunities, as the proportion of large organizations requiring small business owners to disclose ESG measures it is expected that reach 92% this year. But ESG measurement solutions can often be expensive and out of reach for many small businesses.
“Small businesses don’t have the capacity or skills to do this,” says Kimberley Abbott, founder of Acquired impacta UK-based global company that leverages AI and 300 million scientific and other relevant data to automatically assess and quantify the impact of businesses and investments. “We need to meet small businesses where they are. Democratizing this technology also means ensuring that the price is fair for everyone.
Across Europe, the Middle East, Africa and Latin America, Vested Impact, with support from Mastercard Strive, is developing an affordable platform for small businesses to measure a company’s impact in seconds. Their goal is to assess 1.2 million small businesses by the end of 2024. Their platform takes into account what the business does and where it does it, along with important data points, and measures the business impact in relation to the United Nations Sustainable Development Goals. The platform will be able to quickly create an impact report that small businesses can then use as proof of the good work they are doing.
Ensuring everyone benefits from the AI revolution
These are just three examples of how AI can help level the playing field for small businesses. AI can help these businesses too attract and retain customers, make marketing more targeted and effective and increase cybersecurity. Ensuring AI reaches small businesses will require involving them in the design process to ensure solutions meet real needs.
One way we help democratizing AI requires the Artificial Intelligence Challenge to Accelerate Inclusion (AI2AI Challenge) — a partnership with data.org and Dasra to recognize organizations that deliver innovative AI solutions that are proven and ready to scale with additional funding and technical support.
Mastercard has joined forces with Create Labs and various global media partners to develop and pilot a new inclusive AI tool which offers personalized assistance to small business owners.
Ultimately, the AI revolution is here, and it’s up to all of us to ensure that everyone, everywhere can benefit from it. We need to help small businesses access AI technology and tools, whether that’s creating easy-to-use chatbots, helping business coaches in underserved communities, or providing tools of ESG measurement to companies that are already doing good work. The power, the resources and the opportunities are there. It’s time to welcome them.
Learn more on Mastercard’s work in artificial intelligence.
Dorothy Pomerantz is an editor at Fitch Ink where she writes and edits articles for Mastercard Newsroom and beyond. She spent 15 years at Forbes Magazine where she was Los Angeles bureau chief.
Originally published by the Mastercard Center for Inclusive Growth
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