Abstract
This study explored the adoption of Artificial Intelligence (AI) among Small and Medium-sized Enterprises (SMEs) in Davao Del Norte, Philippines. Using a qualitative multiple-case study design, it investigated the experiences, challenges, and coping strategies of five SMEs across diverse sectors: Financial Services, BPO, Transportation, Healthcare, and Construction. Data were collected through in-depth interviews with owners and managers, and analyzed through thematic and cross-case analysis. Findings indicated that SMEs primarily adopt AI to enhance operational efficiency, reduce errors, and improve customer service. They predominantly used readily available, low-cost tools such as generative AI, social media chatbots, and basic automation systems. However, significant barriers to adoption include high costs, a pronounced skills gap, data security concerns, and initial employee resistance. In response, SMEs developed adaptive strategies such as starting with small-scale pilots, relying on self-directed learning via online tutorials, and providing incremental staff training. Ultimately, successful AI adoption for SMEs depends less on advanced technology and more on a pragmatic approach with strong leadership support, focusing on solving immediate problems to ensure long-term viability.
