AI adoption has crossed the tech chasm for small businesses

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AI adoption has crossed the tech chasm for small businesses

AI use by small businesses has hit a tipping point, according to a new report from Coventry and Warwickshire-based Dandelion Applied AI.

Use is shifting from early adopters to the early majority, with even the smallest firms now starting to benefit. The latest ONS BICS data shows that nearly a fifth of micro businesses (0-9 employees) are now using at least one form of AI technology.

AI adoption has crossed the tech chasm for small businesses

Improving business operations remains the primary driver. Businesses are most commonly using AI to process data, generate text and create visual content.

Caroline Broadway, Director of Dandelion Applied, AI comments:

“The figures likely understate AI use. Individuals and teams may be informally dabbling. Now is the right time to take a more structured approach and gain early advantage before it goes truly mainstream.“

In the West Midlands, a quarter of businesses (25.2%) are using AI – up from 20.3% last year, a nearly 25% increase.

Despite the growth, challenges remain. The most commonly reported barriers include:

Limited AI expertise (13.1%)
Cost (10.2%)
Difficulty in identifying use cases (9.8%).

Caroline Broadway added:

“Many SMEs benefit from help identifying practical quick wins – often using low- or no-cost AI tools. People are a key part of successful adoption. We recommend treating AI like any other change programme, with a clear business case and engaging your team.”

Read the full SME AI adoption update at www.dandelionai.co.uk.