In today’s rapidly evolving business landscape, artificial intelligence is no longer just a buzzword. It is what’s making the difference between the “top dogs” setting the pace of innovation and the companies being slowly pushed to the sidelines.
Companies leveraging AI aren’t leaving growth to chance. They are creating predictable, scalable results that no mega millions lottery win would ever guarantee. However, there is a big chance that many SMEs are missing out on this AI revolution, and it’s not a pretty sight.
New research has shown that SMEs are significantly missing out on AI adoption, placing their competitiveness and innovation at risk. A recent report by Employment Hero’s Work That Work across the UK showed that 38% of SMEs had never used AI tools. A further 54% stated that they used them less than once a month. This slow assimilation is contrary to the economy, which is constantly being shaped by automation and digital acceleration.
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The current trajectory of businesses using AI
So, what are businesses not using AI currently missing out on? Research on small business leaders and employees revealed that small businesses using AI were reaping tangible benefits. For example:
- 66% of the respondents stated that the quality of their work had improved
- 62% stated that they felt more creative and were less overwhelmed than before
- 57% said that they procrastinate less
- 51% reported working fewer hours
Looking at all these, you’ll realise that the incorporation of artificial intelligence not only helps to boost technology in a company, but also enhances the wellness of employees. It therefore makes you wonder why more companies are not embracing this tech.
In fact, only 24% of professionals feel like their organisations are invested in the tools and training. This just shows how big a gap there is between the real-world implementation of AI and its potential. Now the real question remains: why is there a gap?
The notion that the cost is too high
The truth is, AI is not cheap, especially for advanced tools. It, therefore, needs businesses with deep pockets to manage the price tags that come with it. Take, for example, Microsoft 365 Copilot. Before 2024, this AI model required a minimum of 300 users at USD 30 per user per month. Do the math, and that’s at least USD 108,000 annually. On another front, a custom, internal-only GPT from OpenAI could cost millions. But if there are considerations to be made, USD 2 to USD 3 million would be a good place.
When you look at these figures, it would be so hard for businesses with little capital to access the tools. For instance, during an interview between Sidharth Yadav and a founder of a five-person startup, Yadav stated the licensing fees for ChatGPT’s copilot’s enterprise, the founder laughed, saying that that was more than her payroll for three months.
When you look at big companies, they are investing seven figures into AI infrastructure and tools. But for small businesses, which make up the majority of all UK companies, they are trying to think whether they can justify GBP 30 a month for a single AI slot.
Difference in data
Large enterprises have large tracts of saved customer data from years. This included purchase histories, CRM Records and call transcripts. With all this data, they have the advantage of fine-tuning and personalising. In contrast, small firms do not store their data in elaborate ways, meaning that by the end of the day, they only depend on spreadsheets and email threads. The data they have is just not high-quality labelled and thus can’t help build robust models.
The difference in data ends up showing in the sales. Data by Pipedrive found that SMEs adopting AI led to sales jumping from 35% to 80% within a year. However, most of that adoption comes from off-the-shelf assistants and not customised modes. On the other hand, large companies embed predictive scoring and hyper-personalisation into their workflows.
By the end of the day, the difference is not that small and medium-sized enterprises avoid AI. It is just that their AI remains generic while big companies know how to train theirs better to understand their customers better.
AI skill and education are still lacking
Large companies often bring in new hires for special roles like machine learning engineers and AI data scientists. Additionally, they invest in training their employees. This ensures that the people working with the AI have good knowledge and skills to operate the tools. Conversely, smaller businesses often face the challenge of insufficient skills and a lack of general AI knowledge among the workforce. Funny enough, a 2024 Work Trend Index Annual Report from Microsoft and LinkedIn revealed that 60% of SME leaders say they do not want to hire someone without AI skills.
Now, looking at a report by McKinsey & Company, many employees are asking for more formal training. According to the report, more than a fifth of the respondents stated that they had minimal to no support and wanted more training on Generative AI. Unfortunately, the Work Trend Index report revealed that 76% of leaders believed that employees can use AI effectively with just minimal training. That’s why only one-third of SME AI users have received training.
When you put down the difference in thought between the SME employees and leaders, you’ll realise that there is still a huge misunderstanding in skills that will need to be sorted in order to clear the gap.
Many people still believe that AI is just for the tech-savvy and large organisations. However, it is important to note that artificial intelligence is the future of technology, and it makes the difference between businesses that thrive and those that will be discarded in a few years. Therefore, it is important that business leaders find a way to work out their business models in order to accommodate this tech.
