Small businesses embrace AI for quick productivity wins, study finds

Small and local businesses across the UK are increasingly adopting artificial intelligence (AI) tools to boost productivity and efficiency, according to new research that highlights the technology’s growing appeal for time-poor entrepreneurs.

A study led by Professor Ross Brown at the University of St Andrews Business School found that UK SMEs using AI tools could achieve productivity gains of between 27 and 133 per cent. The findings, based on interviews with nearly 10,000 businesses conducted by the Department for Business and Trade, suggest that AI has the potential to address the UK’s long-standing productivity challenges — particularly among underperforming small and medium-sized enterprises.

“AI potentially offers SMEs short cuts that provide quick productivity wins, like planning staff rotas or reducing food waste in a small restaurant,” Brown said. “These solutions are inexpensive and relatively easy to implement.”

The findings are supported by recent data from Faire, a wholesale marketplace for independent retailers, which found that 83 per cent of 300 surveyed small businesses had used AI tools, and more than one in three were using them daily. Only 10 per cent said they had no interest in adopting the technology.

One such adopter is Kate Tompsett, owner of Happy & Glorious, a Canterbury-based shop selling British-made gifts. With just two part-time staff, she uses AI platform ChatGPT to support her marketing efforts — from writing product descriptions to drafting blog posts.

“I find product descriptions really tedious, especially when I’ve got the same tote bag in eight colours,” she explained. “Google needs something unique for each, and ChatGPT helps me get started.” While she always rewrites the content to maintain her tone of voice, Tompsett described AI as “a kind of mini-me” that makes life easier. She’s now considering using it for scheduling and business planning.

Charlotte Stubbs, who runs Creativity, a gift shop in the coastal town of Sheringham, Norfolk, has taken a more cautious approach. Her younger sister uses built-in AI tools on social media platforms like Instagram, Facebook and TikTok to enhance post visibility. This has helped boost sales of popular items such as Jellycat soft toys.

However, Stubbs remains sceptical about relying too heavily on AI. “When you’re a small business like mine, I know what stock I need and when I need it — I don’t need a computer to tell me that,” she said.

Despite the varied levels of adoption, the trend is clear: AI is becoming a valuable tool for small businesses, particularly when used to tackle time-consuming tasks that don’t require specialist technical knowledge. For many owners, the technology provides a helping hand — or at least a head start — in running lean, agile operations in an increasingly digital world.

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Small businesses embrace AI for quick productivity wins, study finds