Small and medium-sized enterprise (SME) owners are showing a growing understanding of the potential of artificial intelligence (AI) but remain hesitant to fully embrace it in their business operations. A recent survey conducted by iwoca, a leading small business lender in Europe, has revealed that 55% of SME owners comprehend AI’s capabilities, with 27% incorporating AI into their businesses. Despite this positive sentiment, several barriers are impeding widespread AI adoption, including concerns about relevance, technical expertise, costs, and algorithmic bias.
SME Owners’ understanding of AI
The iwoca survey highlights that more than half of SME owners have a grasp of what AI can offer. Over a quarter of them are already using AI in various aspects of their business operations. The survey also indicates that SME owners tend to view AI as a positive rather than a negative development, with 20% believing that AI could potentially save their businesses up to 10 hours per week.
Hesitation and concerns
Despite the positive outlook on AI, a significant proportion of SME owners remain hesitant about its adoption. According to the survey, 50% of small business leaders express reservations about integrating AI into their companies. Moreover, 30% of them fear that AI could disrupt their existing business models.
Barriers to adoption:
The reluctance to adopt AI among SMEs is attributed to various factors, including:
1. Relevance: 41% of those surveyed believe that AI is not relevant to their business.
2. Technical expertise: 18% feel they lack the technical expertise required to implement AI.
3. Cost: 17% consider the cost of AI implementation to be too high.
4. Algorithmic bias: Another 17% express concerns about algorithmic bias, which can lead to biased AI decisions.
The importance of AI skills
The survey also points out that AI skills are in high demand but relatively scarce among global workers. Only one in ten workers possesses the in-demand AI skills, even though 25% rank AI proficiency as one of the top three most important digital skills to have. This skill gap underscores the challenges SMEs face in harnessing AI’s potential.
To bridge the AI skills gap and prepare for AI’s expanding influence, 85% of HR managers are planning some form of Learning & Development investment. They recognize the need to future-proof their employees as AI continues to evolve and reshape job roles.
AI as a tool and threat
The perception of AI as either a productivity tool or a threat depends on how well SME owners prepare for its integration into their businesses. Those who embrace AI as a tool for innovation and efficiency can leverage its benefits, while those who resist may find themselves less competitive in the evolving digital landscape.
The hesitance toward AI adoption coincides with a critical policy juncture in the UK. The country recently hosted an AI Safety Summit to assess the risks associated with frontier AI and explore regulatory frameworks. Sixty-one percent of SME owners express the need for established guidelines on AI’s safe use. Clear regulations could help alleviate some of the concerns SMEs have regarding AI.
Educational initiatives
To prepare the workforce for AI’s impact, the government has launched 800 scholarships worth £8 million to equip eligible students with practical AI and data science skills. These initiatives are aimed at ensuring a skilled workforce ready to navigate the digital transformation.
While SME owners are increasingly aware of AI’s potential, hesitance and barriers persist in adopting this transformative technology. Overcoming challenges related to relevance, technical expertise, costs, and algorithmic bias is crucial for SMEs to fully harness the benefits of AI. Investing in learning and development and embracing AI as a tool for innovation can help SMEs stay competitive in an ever-evolving digital landscape. Moreover, clear regulations and educational initiatives play a pivotal role in shaping the future of AI adoption among SMEs.
