Abstract
Micro, Small and Medium-Sized Enterprises (MSMEs) have revolutionary prospects to improve sustainability and efficiency in the digital age thanks to the quick development of artificial intelligence (AI). Micro, Small, and Medium-Sized Enterprises (MSMEs) have revolutionary prospects to improve sustainability and efficiency in the digital age thanks to the quick development of artificial intelligence (AI). However, due to obstacles including scarce resources, a lack of technical experience, and unclear implementation pathways, MSMEs have yet to adopt AI despite its potential. By creating a Framework for AI-Driven Sustainable Enterprises (F.A.S.E.) to help MSMEs successfully integrate AI while adhering to social, economic, and environmental sustainability objectives, this study fills this crucial gap. This study employs a mixed-methods approach, integrating qualitative insights from interviews with AI specialists and MSME stakeholders with a systematic literature analysis on AI and sustainability in MSMEs. The methodology is then validated by the study using quantitative surveys of MSMEs in a variety of industries, evaluating the results, facilitators, and barriers of AI adoption. Key elements for successful AI enculturation are identified by the suggested F.A.S.E. framework, which includes organizational culture, skills development, financial accessibility, and technological preparedness. Preliminary evidence indicates that MSMEs utilizing AI report 20–35% increases in operational efficiency and 15–25% reductions in resource waste, underscoring AI's role in sustainable growth. The study advances theory by bridging the gap between the literature on AI adoption in the MSME setting and sustainability. From a practical standpoint, it offers a thorough strategy for MSMEs to adopt AI ethically, as well as policy recommendations for organizations and governments to support digital transformation. This study highlights the urgent need for structured AI frameworks tailored to MSMEs to support the UN Sustainable Development Goals (SDGs) and allow them to participate in the rapidly digitized global economy. The F.A.S.E. framework is an essential tool for creating resilient, future-ready enterprises.
Keywords
- Artificial Intelligence Search this journal for Artificial Intelligence (opens in a new tab)
- MSMEs Search this journal for MSMEs (opens in a new tab)
- Sustainability Search this journal for Sustainability (opens in a new tab)
- Digital Transformation Search this journal for Digital Transformation (opens in a new tab)
- Framework Search this journal for Framework (opens in a new tab)
- Productivity Search this journal for Productivity (opens in a new tab)
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Copyright (c) 2025 Nor Lela Ahmad, Ruzita Manshor, Rozita Naina Mohamed, Masrur Mohd. Khir, Farrah Diana Saiful Bahry (Author)

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Keywords
- Artificial Intelligence Search this journal for Artificial Intelligence (opens in a new tab)
- MSMEs Search this journal for MSMEs (opens in a new tab)
- Sustainability Search this journal for Sustainability (opens in a new tab)
- Digital Transformation Search this journal for Digital Transformation (opens in a new tab)
- Framework Search this journal for Framework (opens in a new tab)
- Productivity Search this journal for Productivity (opens in a new tab)
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