The AI Minister's new Cabinet role gives the UK Government an opportunity to help small firms adopt the technology with confidence, the Federation of Small Businesses (FSB) says.
FSB has published The Confidence Code: The Challenges and Opportunities of AI for Small Firms days after Prime Minister Andy Burnham gave AI Minister Kanishka Narayan, who is MP for the Vale of Glamorgan, a seat at the Cabinet table.
The report found that:
- 59 per cent of AI users have seen productivity gains
- 24 per cent have increased their revenue
- Businesses using AI reported an average three per cent increase in revenue.
However, while AI adoption among small firms has almost tripled since 2023, 92 per cent still have concerns about issues including data security, copyright and liability.
Around a third (34%) say better guidance on implementing technology would encourage them to adopt it, while 31 per cent say support to use AI legally, ethically and responsibly would help.
The rewards, however, are substantial, and FSB figures show that unlocking deeper AI use could be worth more than £42 billion to the UK economy each year.
FSB is now calling on the AI Minister to use his Cabinet role to lead efforts across UK Government to deliver:
- A Government-backed Responsible AI Essentials certification scheme
- AI adoption vouchers to help businesses implement AI safely
- Clearer guidance and training through the AI Skills Hub
- Standardised AI model cards so businesses can understand how providers use their data and who is responsible when things go wrong.
Tina McKenzie, Policy Chair of the Federation of Small Businesses, said:
“FSB is calling on the AI Minister to use his Cabinet role to lead efforts across Government to deliver the changes.
“It's great to see the new Government taking AI seriously and recognising how important it's becoming to the economy.
“The technology is moving at pace, but too many are asking basic questions about data, copyright and liability, and they deserve clear answers.
“The new AI Minister has a real opportunity to make the UK the best place in the world for small firms to adopt AI, but that will only happen if he puts trust at the heart of the Government's approach.
“That means giving them clear answers on who owns AI-generated content, how their data will be used, and who is responsible when things go wrong. He also should use his role to ensure small firms are not left to navigate this rapidly changing technology on their own. They must have access to practical guidance and support to help them adopt AI safely and confidently.
“If he gets it right, more small firms will embrace AI and that in turn will increase productivity. But if trust is overlooked, the UK risks holding back thousands of businesses that are ready to take the next step.”
Joshua Miles, Head of FSB Wales, said:
“As AI adoption accelerates, the key question is whether small businesses across Wales can share in its benefits.
“FSB's research shows that AI can help SMEs boost growth and productivity, but only if they have the right support to use it effectively, safely and with confidence.
“That matters in Wales, where small firms are rooted in every community and will be central to meeting the Welsh Government's target of halving Wales' productivity gap.
“The Welsh Government have an opportunity with its new development agency to make it easier for businesses to start, scale and adopt new technologies such as AI, by providing practical support shaped around the realities of running a small firm.
“The Welsh and UK governments must also work together to ensure the infrastructure and support are in place to boost take-up, from broadband connectivity to access to innovation funding.”
