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Many UK small firms are reluctant to embrace AI

29 July 2024

The majority of UK SMEs are still not using artificial intelligence, despite a growing acceptance by businesses that it will help boost productivity.

Research carried out by the British Chambers of Commerce (BCC) Insights Unit in partnership with specialist recruiter Pertemps Network Group, has found that most small businesses in the UK are not using artificial intelligence (AI) despite the advantages it offers.

The findings show that only 25% of small firms are currently using a specific AI technology, even though 42% of companies say they believe AI will increase their productivity overall. More than four in ten firms (43%) say they have no plans to use AI technology, while 8% are not sure if they are using AI already and 24% plan to in future.

"AI technology is fast becoming a key part of the business landscape. It will have a huge impact on employment trends going forward. Our data is a stark reminder of the challenge ahead to get all firms equipped for the digital future … The pace of technological change is speeding up, not slowing down. It's vital that all businesses are given the opportunities to embrace AI." Shevaun Haviland, BCC director general.

There are significant sectoral differences in the uptake of AI, it seems. The data shows that B2B companies are most likely to be using AI (33%). Meanwhile, manufacturing firms are least likely to be using AI technology (19%) - with nearly half of manufacturers (49%) also saying they have no plans to adopt the technology, while just 24% intend to use it in the future. Similarly, 50% of customer-facing businesses say they have no plans to use AI technology.

"I was sceptical about AI, assuming it was the preserve of large corporations with deep pockets. Then along came ChatGPT and I began to see first hand how this easy-to-use AI tool could save time and reduce costs (more on this below). This early success laid the foundation for my deeper exploration of AI's potential." Alex Clansey, founder Venture Planner.

The report also examines the labour market, including changing skills needs. It has found that only 11% of businesses say their current training arrangements are allowing them to meet their future skills needs. The report concludes that AI could be key to helping businesses develop their skills.

 

AI can help tackle skills shortages

Carmen Watson, Pertemps Network group chair, said: "AI has the potential to significantly benefit many industries but, as our research with the BCC shows, there is still a nervousness about its applications. One of the areas it can help is addressing skills shortages."

Shevaun Haviland, director general of the British Chambers of Commerce, agrees. AI, she said, "can help free-up time for experienced professionals who, freed from some of the more mundane and process-driven tasks on their to-do lists, can spend time upskilling themselves and, also, mentoring those younger professionals coming through."

The British Chambers of Commerce is calling on the government to do more to help small businesses take advantage of the benefits that AI offers. "Without direct action by the government to help SMEs, many firms risk being left behind," said Haviland. "Businesses need advice and support to make the digital steps forward. That support on AI will also help firms feel more confident in their future skills planning."

Written by Rachel Miller.

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