Tina McKenzie
Policy Chair, Federation of Small Businesses (FSB)
Find out how small businesses in the UK adopt AI and the crucial need for balanced regulations to ensure their success in this rapidly evolving landscape.
Artificial intelligence (AI) was once hailed as something far-fetched and fictional, but almost overnight, it became part of many people’s daily lives. Today, AI outpaces even the rise of the dot.com boom. However, the current debate often overlooks small businesses and the self-employed.
Small business AI adoption
There are 5.5 million small businesses in the UK. With 20% already using AI, according to the Federation of Small Businesses (FSB)’s ‘Redefining Intelligence’ report, their role in AI’s trajectory is undeniable. Small firms are agile and can make rapid changes to their operations, so with the right framework, they will be able to embrace AI at pace. Forgetting them when looking at the opportunities — and risks — that AI will bring would be a grave error.
AI-powered technologies have the potential to improve business investment and foster growth.
Need for balanced regulations
With AI’s rapid growth, the need for a balanced regulatory framework is urgent. Whether small businesses and the self-employed are adopters or creators of AI, they face vulnerabilities and risks that larger tech companies can mitigate or bypass. FSB’s research shows that 25% of small businesses in the information and communication sector, for instance, fear AI may undermine the long-term viability of their business. Regulation, therefore, is key.
Value of leveraging AI
AI-powered technologies have the potential to improve business investment and foster growth. The role of government extends beyond managing threats; it will have a pivotal role to play in boosting digital trade, raising productivity and breaking down barriers to tech adoption.
Smart AI use within departments such as HMRC and by regulators could dramatically improve customers’ experience and reduce the volume of regulatory requirements facing SMEs. However, any such implementations of AI must be introduced very carefully, to ensure no degradation in customer service levels.
Expanding AI access and regulations to prioritise
One of the most important priorities for policymakers is to address the AI skills gap, with 46% of small firms lacking the knowledge to integrate AI. Policymakers also need to ensure that small firms’ access to cloud services remains affordable; that copyright laws are enforced, to give small businesses control over their creative output; and that small firms are protected, by making use of deepfake technology with the intent to cause commercial damage a criminal act.
AI has the potential to bring endless benefits to the economy. To maximise success, we need to ensure we’re creating the right environment for small firms to thrive in.
