SME survey

Analysis of the impact of artificial intelligence on the Geneva economy

Insight
10 minute read
05/12/24

The Analysis of the impact of artificial intelligence (AI) on the Geneva economy report was prepared by PwC Switzerland on behalf of the Cantonal Office for Economy and Innovation of the Republic and Canton of Geneva (OCEI). It presents the results of a survey conducted in the first quarter of 2024, aimed at assessing the perception, readiness and expectations of Geneva-based companies with regard to AI. The survey gathered responses from more than 200 small and medium-sized enterprises (SMEs) in various sectors, primarily from senior management to gain a strategic perspective. The report analyses the survey responses by company type, size and sector to provide a detailed view of the impacts of AI on the Geneva business landscape and to assess the need for cantonal support.

54%

of Geneva SMEs have adopted AI systems

68%

of companies surveyed consider AI as "important" or "very important"

72%

of Geneva SMEs expect AI to boost revenues

40%

of companies in Geneva lack the necessary skills and internal resources to implement and manage AI systems

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The survey Main conclusions

The main objective of this survey is to understand how Geneva-based companies perceive AI, their level of preparedness for its adoption and the challenges they face. Ten main conclusions were drawn from the analysis of the responses to the survey.

AI adoption rates among the Geneva SMEs surveyed show a divide. 54% have integrated AI into their business processes, while 46% haven’t. The smallest companies (1–10 FTEs) have the highest adoption rate, with 63% having integrated AI systems into their operations. In comparison, only 33% of medium-sized companies (50–249 FTEs) have adopted AI systems. Business sectors with the highest AI adoption rate are financial services (76%), IT (71%), communications/marketing (67%) and real estate (67%).

88% of the respondents said they had a “basic” to “very good” understanding of AI applications and concepts, with 45% having a “good” to “very good” understanding, while less than 1% said they had no knowledge at all. However, the level of awareness of AI among senior executives varies by business sector, with cybersecurity and information technology (IT) topping the list.

Responses relating to the perceived impact of AI on costs differed: 48% of companies expect an increase in total costs and 27% expect them to decrease. 25% of companies believe that AI will have no impact on costs, reflecting a degree of scepticism or uncertainty about the ability of AI to generate savings.

The most significant consequence experienced by companies after adopting AI is an increase in productivity (73%). In addition, 43% of companies reported an improvement in quality as a result of integrating AI. The findings also indicate that for many companies (31%), it’s still too early to assess the impact of AI. This underlines the fact that AI is still a relatively new technology for many companies.

68% of the companies surveyed consider AI to be “important” or “very important”. Only 10% indicated “low” or “no” importance. The importance of AI is emphasised above all by large SMEs (81%). The majority of companies (72%) expect AI to increase revenues, with most of them expecting this in the short term of one to three years.

The main barrier to AI adoption, mentioned by 44% of companies, is a lack of knowledge about AI and its potential applications. 40% of companies also lack the internal skills and resources needed to implement and manage AI systems, and 39% are concerned about data security risks. High costs are an obstacle for only 10% of companies, indicating that skills and expertise are more significant obstacles. Resistance to change is also a major factor, particularly in larger companies, highlighting the importance of addressing cultural challenges.

Companies are mainly concerned about data privacy (48%) and cyber attacks (59%), as well as the ethical and social implications of AI (38%). While AI offers sophisticated solutions to businesses, it also opens up potential opportunities for malicious activity and cybercrime threats. This combination underlines the importance of robust security measures and ethical considerations in the adoption of AI.

While many initiatives are being taken at a national level, there’s a clear trend towards channelling these efforts into city-specific programmes and applications. The main areas of focus are developing talent with AI skills, ensuring ethical implementation, promoting collaboration and engaging citizens. Given that 40% of the Geneva-based SMEs surveyed lack the in-house skills and resources needed to implement AI, initiatives to develop AI talent can be particularly beneficial for the canton.

The legal and regulatory framework surrounding AI is evolving at a fast pace, with many jurisdictions around the world, including Switzerland, actively seeking to ensure the responsible development and use of AI systems. Despite this, almost half of companies have little or no knowledge of current AI regulations, which is evidenced by the fact that a majority take a neutral stance on satisfying the current regulations.

60% of companies expressed a desire for cantonal support. The preferred forms of support are education (70%), a collaborative platform for sharing knowledge (55%) and awareness-raising through the demonstration of use cases (55%). Although the canton already offers a range of AI initiatives, including online educational resources on the use of AI, the survey results indicate a strong interest in developing these even further. In addition, the canton offers scope for further action.

By integrating our company’s data with AI technology, it will revolutionise the workplace and enhance the capabilities of AI. We could, for example, ask the system about our daily tasks or monthly turnover, and it will retrieve the information from our company database.

Quote from a survey participant

The survey AI adoption framework

Survey results, including in-depth interviews with selected companies and discussions with AI experts, revealed that the adoption of AI in a professional setting requires consideration of several critical parameters. These are detailed in the following "AI adoption framework", which structures the analysis of the survey results.

Awareness: It’s essential that organisations and their senior executives understand the capabilities and potential impacts of the technology before conducting further assessments or making decisions.
Strategic relevance of the technology: This often depends on the expected impacts on the business, both in terms of revenue and costs. Once the technology is understood and deemed strategically important, the company can prioritise it strategically.
The company’s ability to implement AI: At this stage, companies recognise the need for resources, both financial and human, including the expertise required to implement specific technologies such as AI. These requirements are prioritised, with each tier building on the previous one.

The survey Inspiration for companies

Drafting a clear AI strategy

Identification of priority areas for implementing AI
(Re)allocation of the necessary resources
Definition of success measurements
Regular review and update to capture new technological developments and changing business needs

Setting up an AI governance framework

Ensuring compliance with legal, ethical and security aspects
Definition of the roles, responsibilities and processes for overseeing the development, deployment and monitoring of AI
Integration into existing governance processes

Investing in education and continuous training

Education and training programmes for employees and management
Partnerships with educational institutions
Raising awareness of current AI legislation and regulatory requirements
Encouraging cross-disciplinary and cross-functional collaboration

Measuring and communicating the impact of AI

Tracking the benefits derived from the implementation of AI
Reviewing the return on investment
Communicating with stakeholders

Link to the website of the Cantonal Office for the Economy and Innovation of the Republic and Canton of Geneva