UK SMEs pause innovation due to resource constraints as AI promises £198bn unlock

TL;DR:

  • 59% of UK SME owners have paused game-changing ideas due to lack of time and resources
  • Google Cloud research suggests AI tools could boost SME productivity by 20%, equivalent to one free day per week
  • Only one in three UK workers currently use generative AI at work, with training identified as the key barrier

Nearly two-thirds of UK small and medium-sized enterprise owners have put innovative ideas on hold due to resource constraints, despite recognising that these innovations could significantly boost revenue, according to new research from Google Cloud.

Context and Background

The research reveals that UK SMEs could unlock £198 billion through productivity gains enabled by AI tools. Google Cloud’s analysis suggests that AI-powered tools, such as its Gemini-backed Workspace applications, could raise SME productivity by 20%—the equivalent of gaining an extra working day each week.

Current adoption remains notably low, with only 34% of UK workers using generative AI in the workplace. Of those who have adopted the technology, just half use it daily. The study identified insufficient training as the primary barrier to broader adoption, though it found that even a few hours of training was sufficient to double or triple AI usage amongst employees.

Looking Forward

In response to these findings, Google Cloud has launched a partnership with the Department for Business and Trade and NatWest to deliver a nationwide tour visiting Manchester, Leeds, Edinburgh, and Cardiff. The initiative aims to demonstrate how AI can improve efficiency and drive innovation for local businesses.

Google EMEA President Debbie Weinstein emphasised the potential for AI to address resource gaps, noting that 64% of UK SMEs acknowledge they could unlock significant revenue growth simply with additional time. UK Secretary of State for Business and Trade Peter Kyle confirmed the government’s commitment to partnering with private sector companies to deliver training initiatives and support mechanisms for SMBs.

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