NORTHAMPTON, MA / ACCESSWIRE / September 20, 2024 / Mastercard
By Dorothy Pomerantz
Originally published by the Mastercard Center for Inclusive Growth
Given that Colombia is the second-largest exporter of coffee, the mission of Azahar Coffee might seem a little counterintuitive: Keep as many Colombian beans in Colombia as possible. The rationale? Colombians deserve to drink the best coffee too.
As a small business built upon a reputation for fare that's both on trend and fresh, Azahar needs to stay sharp to be able to compete in a growing market. Using artificial intelligence (AI) could help, by giving the café a way to use its own data to make smarter, more efficient business decisions. For example, by analyzing how many sandwiches are sold per day, it could eliminate waste by buying only as much as bread as is needed that day. Knowing which tables are busiest at which times could improve staffing, and analyzing how many people prefer oat milk over cow's milk could help fine-tune dairy inventory.
These kinds of tools are already being adopted by large organizations. According to one recent study, about 42% of companies with more than 1,000 employees have already deployed AI to help their business. But barriers remain for smaller companies that don't have the time or money to hire AI experts and build their own technology. To truly democratize AI, we need to find ways to make these tools more accessible to smaller businesses so they can compete in an evolving tech landscape.
Small businesses will need customized, easy-to-use, accessible solutions. Here are three that are being developed with support from Mastercard Strive.
Building chatbots to harness data
Azahar is part of a pilot program from Datasketch, a small social technology company that is democratizing data science to combat social inequality.
The program is bringing chatbot-enabled AI to small businesses in Bogotá. Existing data analytics services are out of reach for the 50,000 independent stores and restaurants in Bogotá that could benefit from using AI to simplify their data for better decision-making.
For years, these businesses have grappled with a significant challenge: how to harness the power of their data with limited resources. The corner café 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 get to the next level by working with models trained exclusively on a small company'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, Datasketch's founder. "We are able to integrate that data and put an AI chatbot interface on top of it so they can ask questions about their businesses in a simple way and get an answer based on the company's data."
For example, a manager at one of the Azahar cafés could ask, "How much milk should I buy for next week?" and get a simple answer based on complex analytics of café traffic, local preferences and seasonal sales. The tool gives Azahar and other small Colombian businesses a way to compete against bigger companies using the latest technology.
Empowering 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 for exponentially more entrepreneurs. Take Community Reinvestment Fund, USA (CRF), for example, which offers lending and technical solutions to help community finance organizations better support and grow the small businesses they serve.
In Chicago, CRF is working with Allies for Community Business (A4CB), which provides the capital, coaching and connections entrepreneurs need to grow stable businesses, which in turn create jobs and wealth in their communities. The partnership is bringing better insights to the small-business owners they work with.
CRF Insights, the latest technology innovation from CRF, enables A4CB advisers to sit down with small-business owners and, within a minute, compile a snapshot capturing two years of financial performance and health trends. Typically, this process could take up to two weeks and mean manually collecting financial statements, then doing the data entry and the modeling. CRF's tools use open banking to automate this process, pulling financial data from multiple sources (bank accounts, payments systems, etc.) to present all the information in one easy-to-read dashboard.
Coaches then use those insights to help businesses set goals and benchmarks that can be tracked and measured over months and years. The system also responds to data insights, with the option to provide nudges and alerts to the coach. For instance, the platform can help advisers evaluate the impact of a marketing campaign or address demand spikes and suggest actions like a line of credit for inventory needs.
We shouldn't expect, small business owners to be data scientists. We should build 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 businesses.
Patrick Davis
Senior vice president, technology & platform service, Community Reinvestment Fund
Helping small businesses compete on sustainability
It's becoming increasingly clear that for small businesses to compete on a bigger stage, they'll need to be able to measure and report their ESG (environmental, social and governance) risks, opportunities and impact. Doing so can lead to new business opportunities, given that the proportion of major organizations that require small-business owners to disclose ESG metrics is expected to 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 the skills for this," says Kimberley Abbott, founder of Vested Impact, a U.K.-based global company that leverages AI and 300 million science-based and other relevant data points to automatically assess and quantify the impact of companies and investments. "We need to meet small businesses where they are. Democratizing this technology is also about making sure the price is fair for everyone."
In Europe, the Middle East, Africa and Latin America, Vested Impact, with support from Mastercard Strive, is developing an affordable small-business platform 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 company does and where it does it, along with impactful data points, and measures the company's impact against U.N. Sustainable Development Goal targets. The platform will be able to quickly create an impact report that small companies 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 also help these businesses attract and maintain customers, make marketing more targeted and efficient and increase cybersecurity. To make sure AI reaches small businesses will require involving them in the design process to ensure solutions are meeting real needs.
One way we're helping to democratize AI is through the Artificial Intelligence to Accelerate Inclusion Challenge (AI2AI Challenge) - a partnership with data.org and Dasra to recognize organizations that offer innovative AI solutions that have demonstrated success and are ready to scale with additional funding and technical support.
Mastercard has joined forces with Create Labs and diverse global media partners to develop and pilot a new inclusive AI tool that delivers customized assistance to small-business owners.
The bottom line is that the AI revolution is here, and it's up to all of us to ensure that everyone, everywhere can benefit. We need to be intentional about helping small businesses access AI technology and tools, whether that means creating easy-to-use chatbots, helping business coaches in underserved communities or bringing ESG measuring tools to businesses already doing good work. The power, resources and opportunities are there. It's time to embrace them.
Learn more about Mastercard's work in artificial intelligence.
Dorothy Pomerantz is a managing editor at Fitch Ink where she writes and edits stories for Mastercard Newsroom and beyond. She spent 15 years at Forbes Magazine where she was L.A. Bureau Chief.
Originally published by the Mastercard Center for Inclusive Growth
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SOURCE: Mastercard
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