Small and medium-sized enterprises (SMEs) could unlock £78.1 billion in productivity gains by 2035 through the adoption of genAI technology, according to a report by Microsoft and advisory service WPI Strategy.
While large businesses are already adopting AI tools and incorporating them into their operations, the report said that SMEs face barriers such as cost, a digital skills gaps, and limited awareness.
The report said that SMEs, which make up around 99 per cent of UK businesses, are agile and well placed to benefit from genAI technology with the right support.
Adoption of genAI technology could lead to increased economic growth, with the report saying that West Yorkshire could see an uplift of around £4.6 billion while Liverpool could see benefits of around £2.8 billion.
The report made a number of recommendations that national and local leaders could carry out to help SMEs adopt genAI.
Firstly, leaders need to create regional “AI champions” across the four nations and make AI a priority in local growth plans.
The report said that regional genAI “adoption challenges,” which pilot local programmes, could offer SMEs hands-on advice, training and planning to support them in their adoption of genAI.
Finally, it explained that leaders should explore incentives to drive SME digital adoption, which would bring forward business investment in digital adoption and tackle access to finance barriers.
“Small businesses are the backbone of the UK economy but without targeted support, the country’s ambition for growth will falter,” said Hugh Milward, vice president of Microsoft UK. “To unlock it, we need coordinated action from government, regional mayors, and industry to put the transformative benefits of AI into the hands of the people and businesses driving regional growth.”
