How Agentic AI could transform the SME sector

Pakistan's SMEs account for nearly 90% of businesses, yet many remain trapped by weak organisational capacity, fragmented workflows and limited managerial resources. The rise of Agentic AI may offer SMEs enterprise-level organisational intelligence they could never historically afford.

Currently, discussions around AI have focused on large language models, chatbots, content generation and automation. But the next wave of AI is shaping up to be far more transformative for businesses. The world is rapidly moving from generative AI to Agentic AI, systems capable of reasoning, planning, coordinating workflows and autonomously executing tasks with minimal human supervision. This shift could fundamentally redefine how SMEs operate.

For perspective, generative AI can draft an email or report. An Agentic AI system can manage customer interactions, monitor inventory, coordinate procurement, prepare compliance and optimise supply chains autonomously. For Pakistan, this may become particularly significant for SMEs.

SMEs form the backbone of Pakistan's economy. According to SMEDA, Pakistan has more than 5 million SMEs, accounting for nearly 90% of all enterprises, contributing around 40% to GDP and approximately 30% of exports. These firms dominate sectors such as textiles, logistics, retail and manufacturing. Yet despite their economic importance, most SMEs struggle with low productivity, fragmented operations, weak managerial systems and limited digitisation.

Historically, advanced organisational intelligence was largely limited to big corporations with the resources to invest in ERP systems, consultants, compliance teams, data analysts and sophisticated supply chain tools. Small firms often survived through improvisation rather than optimisation. Agentic AI may change this equation.

The real opportunity of Agentic AI is that it is replacing organisational inefficiency. Imagine a textile SME that may soon use AI agents to autonomously coordinate procurement schedules, track export documentation, manage supplier communication, monitor inventory shortages and optimise production timelines in real time. This, Agentic AI may democratise organisational intelligence itself.

This matters because one of Pakistan's biggest economic problems is not merely a lack of entrepreneurship or innovation; it is weak organisational scalability. Many SMEs struggle to grow because managerial complexity increases faster than operational capacity. Agentic AI could potentially allow SMEs to operate with capabilities previously associated only with large firms.

Globally, this transition is already underway. Microsoft, OpenAI and Anthropic are rapidly embedding autonomous AI agents into enterprise workflows. The race is about who builds the most capable AI-driven organisational ecosystems.

Importantly, Agentic AI is becoming more financially accessible, which is one of the most significant barriers for SMEs. Low-cost cloud-based subscription models are available for SMEs. Microsoft Copilot, Salesforce Agentforce and SAP's AI copilots increasingly operate on monthly subscription models rather than expensive in-house AI infrastructure. Thus, eliminating the need to acquire resources and capital to build AI systems themselves. Yet this transition also creates serious risks.

The greatest danger may not be technological unemployment alone, but widening organisational inequality. Big corporations are better positioned to adopt Agentic AI rapidly because they already possess digital infrastructure and technological expertise. SMEs, particularly in developing economies, risk falling further behind if they cannot access affordable AI ecosystems.

This is where public policy becomes crucial.

Pakistan's AI discourse remains largely limited to broad digitisation narratives, with little focus on how AI can fundamentally transform SME productivity. What Pakistan urgently needs is an SME AI Readiness Framework. Developed economies are already moving in this direction. Singapore's National AI Strategy 2.0, the European Union's AI Act and Japan's Society 5.0 framework all prioritise AI integration for SMEs transformation through targeted policies, innovation ecosystems and workforce modernisation strategies.

However, Pakistan's fiscal constraints and IMF-linked economic conditions make large-scale tax relief difficult. This is precisely why the government should consider a different approach: state-supported access to enterprise AI platforms for SMEs. Instead of expensive industrial subsidies, Pakistan could negotiate national partnership programmes with Microsoft, OpenAI or Google to provide discounted or free access to AI copilots and Agentic AI systems for SMEs, exporters and startup ecosystems.

Such a policy could function as digital infrastructure support rather than direct financial subsidies, and also reduce AI adoption cost barriers for SMEs.

This is where Pakistan's SME mindset may need to evolve. Many SMEs still view AI as an expensive technology. But Agentic AI is increasingly becoming an operational system capable of reducing coordination costs and enhancing business scalability.

Pakistan's SME sector needs a similar strategic transformation to that adopted by developed economies. Business owners should begin by identifying bottlenecks within their operations where Agentic AI systems create immediate operational value.

According to the World Economic Forum's Report, nearly 44% of workers' skills are expected to be disrupted by AI over the next five years. But for SMEs, the larger disruption may not simply involve jobs. It may involve how organisations themselves are structured and managed.

Historically, industrial revolutions transformed production. Agentic AI may transform how organisations scale.

Nations that understand this shift early could optimise productivity gains. Those that fail may find their SMEs increasingly unable to compete in an economy driven by autonomous organisational intelligence.

Pakistan cannot afford to enter this transition passively. Its SMEs already face rising production costs, taxation pressure, global competition, digital disruption, compliance pressures and export vulnerabilities. Agentic AI may not solve all structural economic problems. But it could become one of the first technologies capable of giving SMEs enterprise-level coordination capacity at scale. And in the next phase of global competition, organisational intelligence may matter as much as capital itself.