AI Adoption on the Rise Among Small Businesses: A Boost for Productivity
According to new research, small and local businesses across the UK are increasingly embracing artificial intelligence (AI) tools to improve efficiency and streamline everyday operations.
A study led by Professor Ross Brown of the University of St Andrews Business School found that SMEs using AI tools could achieve productivity gains of between 27% and 133%. Based on interviews with nearly 10,000 businesses conducted by the Department for Business and Trade, the findings suggest AI could play a significant role in helping small and medium sized businesses make productivity gains.
Professor Brown explained, “AI potentially offers SMEs short cuts that provide quick productivity wins, like planning staff rotas or reducing food waste in a small restaurant. These solutions are inexpensive and relatively easy to implement.”
Faire, a wholesale marketplace used by independent retailers, has also conducted its own research that highlights the growing appeal of AI. It found that 83% of 300 surveyed small businesses reported using AI tools, with more than a third doing so daily.
Examples of its use include using AI to help with marketing tasks, such as writing product descriptions and blog posts.
However, many also remain cautious in what they use AI for. For instance, over-relying on the technology for core business decisions.
While some business owners remain cautious, there’s no doubt that AI is proving to be valuable for managing many time-consuming tasks. For small businesses, AI could become an increasingly important tool in the growth of their business.
Small businesses looking to expand premises could soon find it easier following new government commitments to make business rates fairer. An interim report from the Treasury says that the Chancellor will examine ways to tackle “cliff edges” in the system - sudden jumps in rates that can discourage investment.
From October 2025, businesses that fall under the UK’s Extended Producer Responsibility for packaging (pEPR) scheme will receive their first invoices, covering the period from 1 April 2025 to 31 March 2026.