SMEs' use of AI for new product development: Adoption rates by application and readiness-to-adopt

Artificial Intelligence (AI) is poised to transform all aspects of business, and with it, new product development (NPD). Pioneering companies that are early adopters of AI for NPD have reaped substantial rewards, seeing notable reductions in development timelines and a heightened pace of innovation. These are larger firms like Siemens, GE, Nestle, and Pfizer; but what about the more typical or smaller firm? To address this question, we surveyed Irish small-to-medium-sized enterprises (SMEs), organized by the Innovation and Research Development Group (IRDG) in Ireland. This article unveils the study's findings, shedding light on the current implementation status of AI across 13 crucial applications in NPD. It also delves into the SMEs' intentions to adopt AI in their NP processes in the foreseeable future, along with the improvements that AI has already brought. Importantly, the study also focuses on SMEs' readiness to adopt AI for NPD, the most important metrics gauging readiness, and possible causes of hesitancy to adopt AI. SMEs in the study have not implemented AI across any of the 13 possible application areas in NPD to a great extent, and the intent-to-adopt is also not strong. Performance results from deploying AI in NPD to date are modest, averaging about 27 % improvement on each of the five KPIs. Further, SMEs' readiness-to-adopt AI for NPD reveals that they are not strongly committed to moving ahead with AI in NPD for a variety of reasons, including the high costs of acquiring AI; challenges in building a strong business case; cybersecurity and IP risks; and recent AI failures. The urgency to act and embrace AI in NPD becomes evident as we uncover the immense potential it holds for propelling businesses into a future of enhanced productivity, efficiency, and innovation. • AI has many potential applications and benefits for NPD, but few SMEs have adopted AI for NPD. • Readiness to adopt AI is lacking among SMEs – no management commitment, a lack of trust, and no demonstrated value. • SMEs must start the AI journey now or be left behind. The AI wave will crest before the end of this decade. • Firms should follow a proven technology adoption and deployment map, much like the RAPID process.