Three in 10 Welsh small business owners say they are already using AI to support their enterprises, while 29% saying they have no plans to use it.
A further 23% don't regard AI as relevant to their business, according to new research from Novuna Business Finance. It suggests that whilst some Welsh business owners see efficiencies that AI can deliver, many small business owners view AI as being at odds with enterprises that are built on the principle of strong human relationships.
For Welsh small businesses not inclined to use AI, the main reasons cited included:
- 54% said their business is built on strong human relationships;
- Also at a time when much of the UK is under drought warnings, 22% of Welsh small businesses said they had sustainability concerns over the energy and natural resources used to run AI;
- 32% mentioned legal concerns over the collection of sensitive data by AI algorithms.
Of those Welsh small businesses that use AI, the main perceived benefits were:
- 14% said they plan to use AI to make back-office / operational processes more efficient;
- 19% plan to use AI to help with market research and/or product development;
- 15% said they plan to use AI to enhance their online and digital marketing capabilities.
By industry sector, professional services enterprises in the IT/Tech, finance and legal sectors were most likely to already be using AI – whereas small business owners in agriculture (46%), real estate (34%) and construction (36%) were most likely to say they had no plans to use AI – and those in agriculture, transport and hospitality were also among the most likely to say AI was not relevant to their business.
Jo Morris, Head of Insight at Novuna Business Finance, said:
“The Government's backing of AI has significant potential to drive economic growth across the UK – and our data shows there is a correlation between small business growth and AI adoption. For example, AI adoption is more prevalent among small businesses that are significantly growing this quarter (59%) than it is among those enterprises experiencing contraction (23%).
“That said, small businesses are not the same as large corporates, where the efficiencies of scale and the ability to invest in sophisticated tech infrastructure are more central to business planning. For many smaller enterprises across Wales, the personal – and human – touch is seen to be more important. Small business owners often know their customers personally and many are deeply rooted in the communities they serve. This is perhaps why so many survey respondents expressed caution towards AI, precisely because their enterprises were built on enduring human relationships and personal service.
“In truth, humans and AI need to co-exist, and in the early days of AI roll-out, striking the right balance is key. Our research also suggests there is an AI knowledge gap that needs to be addressed – with 29% of small business owners openly saying they were unsure how AI could be used in their business. So, as a new Government taskforce assesses how AI can deliver economic growth, it is important that small businesses are involved in the process, that their voices are heard, and that they have access to the knowledge and toolkits needed to make informed decisions about whether and how they can strike the right balance between embracing technological innovation and delivering the personalised service that remains central to their business.”
