Fears around data, liability and copyright are holding small businesses back from adopting AI which could add more than £42 billion to the UK economy, according to new research.
The Federation of Small Businesses (FSB) has today published the results of a survey which has revealed that 55% of small firms now use AI (artificial intelligence) technology, up from 20% in 2023.
However, it also uncovered growing worries about the technology, with 92% concerned about risks from AI– up from 73% in 2023.
The biggest concern, at 54%, is fear about AI producing inaccurate responses. This is followed by security risks and abuse of their intellectual property (IP) rights, both at 39%.
After this, the fears are lack of transparency around how models are trained (38%), exposure to legal liability or risk (30%), and uncertainty around using AI legally, ethically and responsibly (27%).
Only 8% said AI technology had helped reduce staff levels but 59% reported productivity gains, 22% said it helped them grow their business and 24% reported higher revenues.
The average small business adopting AI also reported a 3% increase in revenue, leading to the FSB’s calculation that increasing the depth of use could add more than £42 billion to the UK economy each year.
The FSB’s policy director, Paul Wilson, is due to speak to the Business & Trade Committee today (16 June) as part of its inquiry into AI, business and the future of the workforce.
The organisation is calling on the government to mandate standardised AI “model cards” so businesses can easily see what happens to their data, where it is stored, whether it is used to train AI models, who owns the outputs and who is responsible when things go wrong.
Some providers already publish this information, but not always in a consistent or easily accessible format.
The FSB also wants small businesses to be given greater protection over their data and intellectual property, including stronger enforcement against AI companies that use copyrighted content without permission when training AI models.
It is also calling on the Government to introduce rules on who is liable when AI tools make mistakes, giving businesses the confidence to adopt the technology.
Other recommendations include help for small firms to adopt AI safely and securely through practical support and certification from the Department for Science, Innovation and Technology (DSIT) and the introduction of tax incentives to help small businesses invest in AI and other productivity enhancing technologies.
Tina McKenzie, policy chair of the FSB, said: “There is a healthy realism among small businesses when it comes to AI, and it’s encouraging to see so many already finding practical ways to use it to save time, improve productivity and grow.
“Business owners can see the potential, but they are also asking sensible questions about how their data is used, who is responsible when things go wrong, and how they can adopt the technology safely.
“It’s only natural that people want to know the rules of the road before they take the leap and begin using AI. Small firms are looking for the confidence and certainty to use it well.
“If we can provide that, the prize is enormous. AI has the potential to help small businesses work smarter, reach new customers, develop new products and compete more effectively, unlocking benefits not just for individual firms but for the wider economy too.”
