Development practitioners are focusing on the wrong AI narrative. We are debating ChatGPT’s impact on humanitarian aid and fret over whether 90% of corporate AI pilots fail. Yet, something extraordinary is happening in India that challenges every assumption about technology adoption in emerging markets.
Indian professionals are starting businesses at record rates because of AI.
The numbers are staggering: 73% of Indians say AI has made them more likely to start their own business, and Indian LinkedIn members adding “founder” to their profiles surged 104% year-over-year – the highest globally. Let’s be honest about what this means for development strategy.
The Development Sector’s Blind Spot
Most development programs still treat small businesses as beneficiaries of capacity building rather than drivers of economic transformation.
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We design interventions around large-scale infrastructure projects and government partnerships while missing the fundamental shift happening at the grassroots level. The truth is more complex than our programmatic frameworks acknowledge.
Small businesses account for 90% of all businesses and 70% of global GDP,
Yet small businesses receive minimal attention in digital development discourse. Meanwhile, India’s small businesses are proving that AI adoption doesn’t require the institutional support structures we typically prioritize. They’re moving faster than governments, corporations, and development organizations combined.
Here’s what caught my attention in recent LinkedIn research on Indian small businesses:
- 82% of Indian small business founders say starting a business is easier with AI.
- 83% of business leaders in India say it’s key to growing their business
- 97% of small businesses in India are already using AI in some form
Three Drivers Reshaping India’s Economic Landscape
We’re witnessing the emergence of AI-powered microenterprises that can compete globally from day one.
1. AI as the Great Business Equalizer
The conventional wisdom suggests that AI requires massive technical infrastructure and specialized talent. The reality in India tells a different story. Small businesses with 11-50 employees saw AI engineering skills grow 17% year-over-year, while AI literacy surged 52% across both small and mid-sized companies.
What makes this remarkable is how it’s happening: 73% of small business professionals in India are learning AI on their own time, paying for courses and upskilling themselves.
They’re not waiting for government programs or donor-funded training initiatives.
- 40% are using AI tools to practice real-life scenarios
- 33% are learning through real-life projects
- 32% engage in virtual training
The economic implications are profound. Research shows that of the $621 billion in India’s productivity capacity that could be unlocked by generative AI, up to 30% of GDP may be driven by small businesses.
2. Networks Become Competitive Infrastructure
Development programs typically focus on formal business support systems – incubators, accelerators, government services. Indian small businesses are building something more powerful: professional networks that grow 28% year-over-year, faster than their counterparts at large companies (25%).
This isn’t just networking; it’s strategic infrastructure for small business professionals.
- 73% say trusted input from their community helps them make decisions more quickly.
- 86% believe building relationships matters more than ever.
- 48% cite AI tools as their top source for work advice.
The implications for digital development programming are significant. Instead of building institutional capacity, we should focus on strengthening the peer-to-peer knowledge networks that entrepreneurs actually use.
3. Authentic Branding Through Digital Platforms
While development practitioners debate the digital divide, Indian small businesses are leveraging platforms for brand building and customer acquisition.
- 86% of Indian small business marketers believing video is essential for engagement.
- 77% of marketers say audiences rely on networks for vetting brands.
This connects to broader research on how digital platforms amplify entrepreneurship, particularly for marginalized entrepreneurs. The authenticity advantage of small businesses – their ability to show real people solving real problems – translates directly into market advantages when amplified through digital channels.
Generative AI Skills Revolution
Don’t ask what Generative AI skills Indians should learn. Small business founders already learning them. The better question is why development programming hasn’t caught up to this reality.
Indian small businesses aren’t choosing between AI engineering skills and people skills; they’re investing in both. 88% of Indian companies agree that people skills are even more important in the age of AI. The most valued soft skills among small business leaders are communication, creative thinking, innovative thinking, adaptability, and collaboration.
This challenges the traditional approach to ICT4D skills development, which often separates technical training from business development. Indian entrepreneurs are proving that AI fluency and human relationship skills are complementary, not competing priorities.
Why This Matters for Development
Small businesses create economic resilience in ways that large-scale projects cannot. When 92% of small businesses in India expect growth and 95% are investing in AI adoption, we’re seeing bottom-up economic transformation that traditional development indicators miss.
The wealth creation potential is enormous.
Small businesses provide entrepreneurial pathways that don’t require formal employment in large corporations or government agencies. They enable economic participation for people who might otherwise be excluded from traditional development beneficiary categories.
For India’s social and economic development, small businesses offer several critical advantages:
- Democratic access to global markets through digital platforms and AI tools
- Distributed economic resilience that doesn’t depend on single large employers
- Innovation at local scale that addresses community-specific challenges
- Skills development pathways that combine technical and entrepreneurial capabilities
Digital Development Implications
Digital development practitioners need to recognize that AI adoption is happening organically among small businesses, often faster than in the organizations we typically partner with. Rather than building new institutional capacity, we should focus on strengthening the networks and platforms that entrepreneurs already use.
This means rethinking funding priorities.
Instead of large-scale digital infrastructure projects, consider supporting the peer-to-peer learning networks that drive actual AI adoption. Instead of government partnerships for AI strategy, focus on programs that connect small businesses with global markets and knowledge networks.
The evidence from India suggests that small business entrepreneurs are the most effective AI adoption pathway for economic development. They combine technical innovation with local market knowledge, scale rapidly through digital networks, and create economic opportunities that don’t depend on external institutional support.
