Just one in 5 UK small companies commonly use synthetic intelligence (AI) with price, abilities and belief holding them again, new analysis has revealed.
The report, UK SME Digital and AI Adoption: The state of play in 2026, based mostly on a survey of 1,320 micro and small companies, discovered that solely 21% use AI commonly, and simply 6% have embedded it into each day work throughout the enterprise.
In contrast, 57% describe themselves as extremely or reasonably digital, which the report stated means that the following problem for the UK isn’t fundamental digital consciousness, however serving to companies flip digital familiarity into significant AI adoption or threat lagging additional behind different nations. In Denmark, for instance, 41% of younger companies have adopted AI.
In different findings from the report by Enterprise Nation’s Tech Hub in partnership with Google, Sage, Dell Applied sciences and Sq., 53% of small companies stated stronger AI capabilities would assist to enhance the standard, consistency and velocity of services or products, and 45% that it may make them extra resilient to future financial and market modifications. Corporations with 10-49 workers, specifically, noticed the potential to enhance workers wellbeing (53%) and retention (37%).
When requested about what’s holding them again from adopting AI, 53% cited price, 46% lack of abilities, 38% issues about privateness and information, and 37% lack of time.
The report additionally highlighted an “rising productiveness divide”. Amongst companies which have adopted AI, 65% stated their use has elevated previously 12 months, suggesting that early adopters are pulling additional forward.
But it surely’s the smallest companies which can be on the biggest threat of being left behind, the examine warned, with solely 34% of one-person companies utilizing AI in any respect, in contrast with 68% of companies with 50 to 249 workers
Chancellor Rachel Reeves stated:
“We all know that many companies wish to use AI however don’t but have the instruments, help or confidence to take action – holding again productiveness and development.
“That’s why this week we introduced a significant nationwide increase for AI adoption – from a £200 million funding in coaching, to agreements with commerce unions to coach employees, help small companies and open up alternatives for younger individuals.
“New advisory development labs and industry-led AI adoption plans may also help companies. Our financial plan is the proper one, and it places AI and innovation on the coronary heart of driving development and nationwide renewal.”
Polly Dhaliwal, COO of Enterprise Nation, stated:
“Small companies are the place the UK’s AI ambitions will both turn into financial development or stay a coverage aspiration. Our analysis reveals companies are already embracing digital instruments, however many have but to make the leap from experimenting with AI to utilizing it commonly and confidently. There’s a actual threat of a brand new divide opening up between companies already benefiting from AI and those who haven’t but been in a position to unlock its potential.
“For small companies, even a number of hours saved every week might be transformative, boosting productiveness, development and resilience. If the UK desires to guide on AI, help should attain the tens of millions of small companies that energy native economies and create jobs.
“The chance is gigantic, however except extra companies are given the arrogance and help to undertake AI, the advantages might be concentrated amongst a comparatively small group of companies somewhat than shared throughout the broader economic system.”
The analysis additionally revealed regional and sectoral variations.
Corporations in London and Scotland led on AI adoption, with 30% and 27% of SMEs respectively utilizing AI commonly, in comparison with solely 10% of SMEs within the North East and 6% in Northern Eire. The North East additionally has the best stage of digital exclusion, with 22% of SMEs principally offline, in contrast with 7% nationally.
By sector, info and communication companies have been far forward, with 74% utilizing AI at some stage, adopted by skilled companies and finance. However adoption was far decrease in development and agriculture, the place solely round 4% and 1% respectively stated they use AI commonly.
Polly added:
“The findings present the small enterprise neighborhood with uncommon readability. Small companies are sensible, time-poor and centered on instruments that clear up fast issues. They need proof, trusted recommendation and inexpensive routes in. Which means help have to be easy, free or low-cost, and delivered by way of the channels companies already use.
“Enterprise Nation reaches greater than 1,000,000 small companies a 12 months by way of our neighborhood, campaigns and partnerships. That offers us a deep understanding of how small companies truly function, not simply how we assume they function. This report is a roadmap for what must occur subsequent if we would like digital and AI adoption to achieve the actual economic system.”
