Despite the growing adoption of artificial intelligence (AI) across the UK economy, small businesses are falling behind their larger counterparts in integrating this transformative technology, according to research by Office for National Statistics (ONS), says The AI Advantage Academy.
The ONS data reveals that AI adoption among UK businesses is rising steadily, with 1 in 7 (15%) now integrating AI technologies into their operations. In contrast, larger organisations with 250 or more employees report significantly higher adoption rates, with 30% actively using AI—double the rate of smaller firms.
Although the overall 15% adoption rate marks a 5-percentage-point increase for AI adoption among UK businesses, compared to global adoption rates of generative AI, which McKinsey reports are as high as 65%, it appears UK businesses could be falling behind.
Why Businesses Are Struggling
The challenges UK businesses face in adopting AI are multifaceted. Key barriers identified in the ONS survey include:
- Difficulty identifying business use cases (6%): Many small businesses struggle to understand how to identify feasible and valuable use cases
- Lack of expertise (6%): The AI skills gap is particularly acute in smaller firms, where resources for training and upskilling are often limited
- Cost (6%): The financial burden of adopting AI technologies remains a significant hurdle for small businesses.
These obstacles contribute to the fact that 80% of UK businesses, many of them small, report no plans to adopt AI in the near future.
“Small businesses have a unique opportunity to harness AI as a powerful ally in the quest for increased growth and efficiency,” says Emma Shepherd, AI Specialist and Founder of The AI Advantage Academy. “Investing in affordable AI training and education is the first step and will help businesses identify where AI integration is both feasible and valuable. Even a small AI investment can deliver significant wins and ensure businesses stay competitive in a rapidly evolving business landscape.”
Why Businesses Are Using AI
The ONS data also highlights the top three reasons UK businesses are using AI technologies:
- Improving operations (40%)
- Personalising products or services (24%)
- Developing new products or services (15%)
These findings reflect AI’s transformative potential to drive operational efficiency, enhance customer experiences and foster innovation.
The Risks of Falling Behind
As larger organisations continue to integrate AI to optimise operations, personalise customer experiences, and innovate new products, smaller firms risk being left behind.
Bridging the Gap: How Businesses Can Catch Up
To overcome these barriers, businesses must focus learning on:
- Identifying clear AI use cases: Understanding where AI can deliver tangible value, such as automating repetitive tasks or improving customer insights.
- Closing the skills gap: Investing in targeted training to build AI literacy and practical skills among employees and leadership teams.
- Prioritising affordable solutions: Exploring cost-effective AI tools tailored to the needs of small businesses.
Supporting Businesses with AI Training
I feel much more confident applying AI to enhance my work – I went from being fearful that AI would eliminate my job to feeling excited about how to incorporate it to optimise the services I already deliver. I highly recommend this course to anyone looking to stay ahead of the curve!” Nicky Jobson, Director, PACE PR
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About the Office for National Statistics Data
This data comes from the Business Insights and Conditions Survey conducted by the ONS between 18 September 2023 and 29 September 2024. The survey tracks AI adoption and its barriers across various industries and business sizes in the UK.
For more detailed insights, including data broken down by industry and size bands, visit the ONS’s accompanying dataset here.
About AI Advantage Academy
The AI Advantage Academy founder Emma Shepherd is a certified AI Specialist. The company is committed to accelerating AI literacy and education through targeted training and workshops. It helps businesses overcome barriers to adoption, close the AI skills gap and unlock AI’s potential for growth and innovation.
Email: emma@aiadvantageacademy.co.uk
Phone: 07954090290
Website: aiadvantageacademy.co.uk