New research suggests that small and local businesses across the UK are increasingly embracing artificial intelligence (AI) to improve efficiency and streamline operations.

A study led by Professor Ross Brown at the University of St Andrews Business School found that SMEs adopting AI tools could see productivity gains of between 27% and 133%. Based on interviews with nearly 10,000 businesses, the findings indicate AI could play a significant role in helping SMEs close the productivity gap.

Professor Brown explained, “AI potentially offers SMEs short cuts that provide quick productivity wins, like planning staff rotas or reducing food waste in a small restaurant. These solutions are inexpensive and relatively easy to implement.”

AI in everyday business

The trend is echoed by a separate survey conducted by Faire, a wholesale marketplace used by independent retailers. Their research found:

• 83% of small businesses surveyed are already using AI tools.
• More than a third use AI daily to support tasks such as marketing, writing product descriptions, and managing content.

While many businesses remain cautious about using AI for critical decision-making, it’s clear that AI is becoming an increasingly important tool for tackling time-consuming administrative tasks.

What this means for SMEs

For smaller businesses, AI is not about radical transformation overnight. It’s about making marginal gains – those quick wins that free up time, improve efficiency, and allow business owners to focus on strategic priorities.

Whether it’s automating scheduling, sharpening marketing output, or managing stock levels more intelligently, AI offers practical solutions that are increasingly accessible and affordable.

However, careful integration is key. Blind reliance on AI without oversight can create risks – particularly around decision-making, data security, and customer experience.

The takeaway

AI isn’t just a trend – it’s becoming a powerful tool for growth, especially for SMEs willing to adopt it thoughtfully. As the technology evolves, businesses that blend AI’s efficiencies with human judgement and strategic oversight will be best placed to thrive.