DIGITAL INNOVATION AND ARTIFICIAL INTELLIGENCE (AI) AS A TOOL FOR BUILDING COMPETITIVENESS OF THE SME SECTOR

Purpose: The main purpose of the article is to indicate the importance of digital innovation in the SME sector with a special focus on the role of AI in building the competitiveness of enterprises. Need for the study: Digital transformation, including the use of artificial intelligence AI, is a relatively new area in which all the world's top developed economies are trying to find their edge. In order to win this race, investment in the development of digital and AI technologies and competencies is essential in the EU. Methodology: Literature studies, secondary data analysis, comparative analysis, logical inference and deduction methods were used. In addition, the authors also shared their own knowledge and professional experience, including business. Findings: Based on the research, a number of barriers were identified that SMEs in Poland face in their attempts to obtain financial resources from EU funds for the implementation of innovative projects. The most important ones include: the lack of product or process innovation in the presented projects at least on a national scale and the lack of ability to finance own contribution. Practical Implications: The presented research and results should be used by institutions creating policies to support economic development at the level of countries and the European Union as a whole. The results of the research can also be used by institutions supporting the development of innovation, including digital innovation, in the SME sector in determining the terms of competitions and financial support.