Hiding in plain sight: is AI really taking over without businesses knowing?

According to government statistics, 34% of medium sized companies and 15% of small businesses have already adopted at least one type of artificial intelligence technology.

Research by Pragmatiq found that business management, ecommerce, and marketing are where AI is most used, whether businesses are aware of it or not.

These statistics follow predictions of vertiginous growth in AI technology usage, with annual expenditure expected to surpass £35 billion by 2025.

AI is also predicted to eliminate 85 million jobs and create 97 million new roles by 2025.

Is artificial intelligence taking over?

As dystopian as these statistics sound, according to a Department of Science, Innovation and Technology report, the AI revolution will be a gradual shift rather than a technological Big Bang.

For instance, there is still widespread reticence towards the adoption of AI technology due to knowledge gaps and low public trust.

The government is currently working on bridging this trust gap through its strategy outlined in the AI whitepaper, which aims to create a robust policy program to regulate AI.

Moreover, skills gaps are making it harder to hire the right people to use the new technology. In fact, only one in ten global workers have in-demand artificial intelligence skills.

Nevertheless, there is an acknowledgement that AI represents opportunities for growth. According to government figures, 269 new AI companies have been registered on average each year since 2011.

AI companies also generated £10.6bn in AI related revenues, employed more than 50,000 people in AI related roles, and secured £18.8bn in private investment since 2016.

Where do small businesses sit?

Although AI’s adoption is gradually growing and generating profit, only 39% of small businesses believe it will have a positive impact.

This is due to the funding and product development gaps that SMEs run into when implementing AI projects, leaving the big cake slices to large enterprises.

Of the 3,710 UK AI companies that are currently registered, 28% were small businesses and 60% were micro businesses. However, 71% of all AI revenue (£7.6bn) was generated by large firms despite just making up 4% of the AI business population.

Small and medium sized companies together account for just over a quarter (£2.8bn) of AI revenue.

The skewed contribution between SMEs and big tech reflects how disparately capital is allocated. Most importantly, it illustrates the risk aversion that still handicaps SMEs seeking venture capital investment in the UK.

As a result, AI SMEs are pushed to rely more heavily on external finance to support AI product and service development.

Democratising the AI revolution

The spread of AI is arguably unstoppable. However, it would seem small businesses are quite rightly worried about being given a mere supporting role in the start of a new technological era.

An academic stakeholder, providing a statement for the DSIT report, said, “As a sector becomes more aware of AI and use cases, you will start to see more people dabbling, that will catalyse others.”

However, in order for this to occur, sectors need funding and access to the right tools. Feedback from stakeholders and businesses in the DSIT report suggests SMEs need funding, the right tools and more public sector contracts to generate greater adoption

Whether it’s by improving access to R&D tax cuts for small businesses or providing more support in securing venture capital for AI-related projects, policymakers have an important role to play in democratising the adoption of AI in the UK.