Britain leads the way when it comes to artificial intelligence investment, with private investment in the UK hitting £3 billion in 2022.
This is nearly double the artificial intelligence investment of France, Germany and the rest of Europe combined.
However, that investment in artificial intelligence is not trickling down to small businesses, which have the lowest levels of AI adoption and trust compared with leading counties, including the US.
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Meanwhile, tech companies have written to Chancellor Jeremy Hunt calling for enhanced tax breaks for small businesses to invest in digital technology, including AI.
Research by the City of London Corporation and EY has found that investment in AI is growing as companies look to boost productivity, develop products, and improve customer experience.
Ninety per cent of banks are dedicating resources to generative AI and machine learning applications, while legal and wider financial services have adoption rates of, respectively, 30 per cent and 26 per cent.
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However, research from IONOS and YouGov has revealed that UK SMEs have the lowest levels of AI knowledge, adoption and trust, compared to those in the US, France, Germany and Spain.
Just seven per cent of UK SMEs consider their level of AI knowledge to be very good, compared to nearly one third in the US.
Meanwhile, business technology providers including Sage, Shopify and Zoom have written to Chancellor Jeremy Hunt calling for increased tax breaks for spending on digital services, including AI.
The companies say that implementing tax breaks for digital services would “empower” SMEs and help them to leverage AI to improve overall productivity – a key Government concern.
Without action, warns the letter, Britain’s global competitiveness will be harmed along with any aspirations to become a science and technology superpower.
Small businesses should be allowed to claim up to 140 per cent on the first £50,000 they spend on “productivity enhancing” digital services, along with an extra 40 per cent deduction against a business’s corporation tax bill, compared to how they can write off business expenses right now, the companies say.
Support could take the form of a scheme like Australia’s small business technology investment boost, which offers companies with an annual turnover of less than A$50 million (£26 million) an additional 20 per cent deduction on technology expenditure.
According to Sage, small businesses unlocking the full benefits of technology could add an extra £232 billion of value to the UK economy, almost doubling the value of tech use to £448 billion annually.
However, the most significant barrier to tech adoption for small businesses is cost, according to Sage, with 41 per cent of SMEs concerned about adopting new tech due to cash flow pressure.
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