Small businesses at risk of falling behind in AI adoption, study shows
Britain risks creating an artificial intelligence divide as small firms face missing out on unlocking new growth, a new study shows, reports BritPanorama.
Research found that 44 per cent of small and mid-market firms use AI, with another four in ten firms expecting to adopt it in the next five years. However, only around 6 per cent have reached a stage where AI significantly changes their day-to-day decision-making and customer experience.
The findings by NatWest indicate that nearly a third of firms, approximately 29 per cent, are utilizing AI in its earliest stages, which limits their growth potential. In contrast, companies with more than 100 employees show a much higher likelihood of using new technology, highlighting a significant gap in adoption rates.
The disparity between small and larger firms raises concerns about revenue streams, with larger firms enjoying a competitive advantage. Those at an early stage of AI adoption report time savings of between 1 per cent and 10 per cent, while more advanced users see average savings ranging from 61 per cent to 70 per cent. Notably, 95 per cent of firms using AI at an advanced level report increased revenue, compared to only 29 per cent for firms in earlier stages.
AI Minister Kanishka Narayan emphasized the potential of AI, stating: “Putting AI to work can help businesses save time, raise productivity and unlock new opportunities for growth. We must ensure firms of every size have the skills and confidence to move beyond experimentation and adopt the technology safely and successfully.”
He added that while the government will contribute, businesses, banks, and technology companies all play crucial roles in supporting this transition. NatWest’s Chief Economist, Seb Burnside, noted that the opportunity from AI is widespread and not limited to the UK’s major technology hubs. He highlighted that factors such as access to skills and the strength of the local industrial base will determine a region’s ability to leverage AI for growth.
The NatWest findings serve as a wake-up call for small firms, highlighting that proactive investment in AI capabilities could be essential for future competitiveness in the rapidly evolving market.
The shift towards AI is poised to reshape not only individual companies but also regional economies, emphasizing the necessity for an inclusive approach to adopting new technologies.
