Automation and Cost Structures in SMEs: Are Small Firms Disadvantaged vs. Multinationals?

This paper examines how automation reshapes the cost structures of small and medium-sized enterprises (SMEs) compared to multinational corporations (MNCs). Using the dual lenses of economies of scale and the resource-based view, the study analyzes financial, human capital, and informational constraints that disadvantage SMEs in adopting capital-intensive technologies such as artificial intelligence, robotics, and enterprise platforms. Comparative case studies from Germany, Japan, India, Sub-Saharan Africa, the United States, and the European Union highlight persistent adoption gaps shaped by institutional context. Findings suggest that while automation-as-a-service and supply-chain integration offer partial relief, structural disadvantages risk widening productivity inequalities worldwide.