Small businesses increasingly believe AI will be vital to their survival and growth over the next five years, with a new report from Small Business Britain and BT calling for the UK to boost support to capitalise on the transformative power of AI and avoid smaller firms falling behind.
Majority of Small Firms Predict AI Will Be Essential
The AI Opportunity for Small Businesses’ report – which surveyed 2,000 business owners – shows 60% of small firms predict AI will be essential for them to thrive and continue in the next 5 years, with 62% now using AI.
Unlocking Efficiency Through AI Adoption
With the help of AI, small businesses are automating time-consuming tasks, improving customer service, and streamlining operations, freeing up valuable time to focus on innovation and growth. The most common applications include marketing (47%), operations (17%), and customer service (8%).
Barriers Preventing Widespread AI Adoption
However, the data also shows the potential of AI is being held back by significant barriers to entry, which disproportionately affect smaller firms. Over two-thirds (68%) want more affordable AI solutions, with half of entrepreneurs admitting they lack understanding of the new technology (60%) and want more practical support (51%).
A Call for National Support and Policy Action
With many small firms at vastly different stages of adoption, the report has issued thirteen recommendations for Government, technology providers, educators, and business networks to bridge this gap and avoid creating an ‘AI disparity’ among the nation’s 5.45m small businesses.
Key Recommendations to Bridge the AI Divide
It calls for coordinated, targeted action to open up the AI opportunity for all small businesses, helping them to increase productivity, reduce costs, and open new markets.
The recommendations include:
More cost-effective AI solutions
Incentives such as funding, grants, and tax breaks
Tools to measure AI return on investment
Expanded education and practical guidance
Promotion of accessible and easy-to-use AI tools
A centralised national AI resource hub
Peer-led mentoring tailored to sectors
Clearer Regulation and Sector-Specific Support Needed
Authors of the report also believe increased regulatory clarity is needed, with easy-to-understand guides on compliance and ethics.
Small Business Voices Emphasise Urgent Support
Michelle Ovens CBE, Founder of Small Business Britain, said
“AI is transforming industries across the UK and is now a critical conversation for small businesses… We cannot risk any small businesses being left behind.”
The report highlights particular benefits for under-represented founders. For example, 64% of Disabled entrepreneurs are already using AI, though only 14% report strong understanding—revealing a major opportunity for focused training.
BT and Entrepreneurs Urge Inclusive AI Adoption
Dr. Chris Sims, Chief Commercial Officer, BT Business, said
there is an “urgent need for accessible training, affordable tools, and inclusive pathways to AI adoption,” to ensure no small business is excluded.
Amelia Peckham, co-founder of Cool Crutches, added
“Incorporating AI in the right way to have maximum impact is key… the key is knowing how to use it the right way, from experts who know.”
Report Launches at National Event in London
The report will launch with an event at the Science Museum in London, welcoming entrepreneurs from across the country, AI experts, and other business representatives.
