New research by Start Up Loans, conducted by YouGov, reveals that less than half (46%) of small businesses use AI at work, while a third (34%) of small business leaders only have a ‘basic understanding’ of AI tools.
On average, only 7% of small business leaders in the South East would refer to themselves as ‘expert’ in the technology, when thinking about their proficiency in five core pillars of AI: Generative AI, chatbots and virtual assistants, speech to text and vice versa, text analysis and summary, and AI-powered text editing. This is slightly lower than the national average (12%).
In the South East, the biggest barriers to further AI adoption were found to be a lack of appropriate financing options (23% vs 25% on a national level) and uncertainty about future digital standards – for example, new legislation and ethical considerations (19%).
On a national level, the biggest barrier was cited to be IT security issues (25% vs 9% in the South East).
There is also a knowledge barrier preventing many small businesses from reaping the full benefits of tech and AI in the workplace. Over a fifth (21%) of business leaders nationally cite insufficient digital skills of employees as being problematic, which decreased to 15% for leaders in the South East, but was nonetheless cited as an issue.
Within smaller businesses, there was a clear divide between those at the larger end of the spectrum and those at the more micro end when it comes to using AI.
The survey found AI is used in 36% of micro businesses (0-9 employees) and 44% of small businesses (10-49 employees) but rises to 60% of medium-sized enterprises (50-249 employees).
Louise McCoy, managing director, Start Up Loans Products, British Business Bank, said: “AI has the potential to transform the way smaller businesses operate, but people running those businesses face a plethora of barriers which need to be overcome if they are to benefit from the technology. We hope our information, as well as startup financing, one of the biggest hurdles identified, can help drive more use of AI.
By adopting AI responsibly, smaller businesses could unlock new opportunities for growth and innovation, ensuring they remain the driving force of the UK economy.”
Start Up Loans offers pre- and post-loan support packages, including access to Learn with Start Up Loans, a partnership with the Open University, with courses covering key aspects of running a business.
For free advice on how to use AI to grow a business, click here.
