Small and local businesses across the UK are increasingly embracing artificial intelligence (AI) tools to streamline operations and improve productivity, according to new research highlighting the growing appeal of the technology among entrepreneurs.
A study led by Professor Ross Brown of the University of St Andrews Business School, based on interviews with nearly 10,000 companies conducted by the Department for Business and Trade, found that small and medium-sized enterprises (SMEs) using AI could see productivity gains ranging from 27% to as high as 133%.
“AI potentially offers SMEs short cuts that provide quick productivity wins, like planning staff rotas or reducing food waste in a small restaurant,” said Professor Brown. “These solutions are inexpensive and relatively easy to implement.”
The findings come amid a wider trend of digital transformation among small businesses. A separate survey by Faire, a wholesale marketplace for independent retailers, found that 83% of 300 small businesses had already used AI tools, with over a third using them daily. Only 10% reported having no interest in adopting the technology.
For many small business owners, AI offers practical solutions to everyday challenges. Kate Tompsett, who runs Happy & Glorious, a gift shop in Canterbury, has integrated AI into her marketing workflow. With just two part-time staff, Tompsett uses ChatGPT to help write product descriptions and blog posts.
“I find product descriptions really tedious, especially when I’ve got the same tote bag in eight colours,” she said. “Google needs something unique for each, and ChatGPT helps me get started.” While she rewrites content to match her brand’s tone, she describes AI as “a kind of mini-me” that helps lighten the load.
Others are more cautious. Charlotte Stubbs, owner of Creativity, a gift shop in Sheringham, Norfolk, benefits indirectly from AI through her younger sister’s use of social media tools that enhance post visibility on platforms like Instagram and TikTok. Although this has helped boost sales, Stubbs remains hesitant about relying on AI for business decisions. “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 differing attitudes, the trend is clear: AI is becoming a valuable asset for UK small businesses, particularly in handling time-consuming administrative tasks. As the technology becomes more accessible, it is helping time-pressed entrepreneurs run leaner, more agile operations in a rapidly evolving digital economy.
