- Many small and medium businesses want to use AI to free up time and grow, but skills and costs remain hurdles.
- Research shows nearly half of small firms and over half of medium firms plan to adopt AI in the next 12 months.
- Inflation, energy costs, and delays in the Autumn Budget are slowing investment decisions.
- Despite challenges, optimism remains as businesses prepare to invest in AI and training to boost productivity.
The Everyday Struggles of SMB Leaders
Small and medium sized businesses form the backbone of the global economy. In the UK alone, they represent 99 percent of the entire business population. Despite their importance, many leaders in this sector admit they are struggling to find the time and resources needed to focus on long term growth.
According to research by American Express, more than a quarter of small business leaders say they feel trapped in daily operations. Another 24 percent admit there simply are not enough hours in the day to pursue new opportunities.
This is where artificial intelligence could play a role. Business owners are increasingly aware that smart technology can take over routine tasks and free up time. By doing so, leaders could redirect their energy toward expansion and innovation. Yet enthusiasm comes with hesitation. Many small firms remain uncertain about going all in on AI because of costs, training, and skills shortages.
Plans to Adopt AI Despite Concerns
While concerns exist, adoption plans are gaining pace. Research shows that nearly half of small businesses intend to introduce AI in the next year. For medium sized businesses, that figure rises to just over half.
There is a sense that embracing these tools could help them reach stronger performance in 2025. In fact, 60 percent of small and medium businesses expect better results in the final quarter of next year compared with the past two years.
Separate studies support this trend. Barclays research revealed that almost nine out of ten UK businesses expect to use AI in the next two years. Areas of interest include data analysis, forecasting, customer experience, and cost reduction. These are functions that traditionally demand high time investment and often stretch smaller firms. By using AI, many hope to reduce the burden.
Skills Shortages Remain a Major Hurdle
Despite the optimism, there is a recurring theme that holds firms back: skills shortages. Even after nearly three years of publicly available AI tools such as ChatGPT, many businesses are still struggling to train staff and make full use of the technology. This challenge is particularly visible in financial services, IT, telecommunications, and even the tech sector itself.
Industry voices are pointing out the importance of investment in people. Matt Hammerstein, CEO of Barclays UK Corporate Banking, explained that AI is becoming a key driver of innovation.
He also highlighted that investment and upskilling are critical to boost productivity in the long run. Businesses themselves seem to agree, with plans to direct resources into training, digital products, and research and development.
Economic Uncertainty Slows Investment
Even with the intent to invest, wider economic uncertainty is shaping decisions. Many businesses are waiting to see what impact the delayed Autumn Budget will have before committing to significant spending. Inflation is also adding pressure, with 33 percent of businesses pointing to rising prices as a barrier to growth. Another 22 percent see utility costs as a major obstacle.
The financial strain is forcing many firms to rethink how they spend. Barclays research suggests that 39 percent of UK businesses have adjusted their budgets in response to energy costs. Some are choosing to invest in efficiency measures or renewable energy, while others have had little choice but to pass on rising costs to their customers. Around one in four small firms admit they have had to increase prices for their goods and services.
Optimism Remains Despite Challenges
While the picture is mixed, there is a clear sense of resilience. Abdul Qureshi, Managing Director at Barclays Business Banking, noted that businesses are pressing ahead with AI and skills investment. His comments reflect the optimism seen across the small business community. Despite energy costs, inflation, and uncertainty around government policy, there is still momentum toward innovation.
The promise of AI lies in its ability to reduce the burden of daily tasks, offer new insights through data, and improve customer experiences. If businesses can overcome the training gap and manage the financial pressures, AI could help unlock growth and productivity in the years ahead.
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