Businesses in the North West lack AI understanding, finds British Business Bank

Only 27% of businesses in the North West said they have a basic understanding of generative AI, finds new research conducted for the British Business Bank.

Research, conducted by YouGov on behalf of the Start Up Loans programme, revealed less than half (46%) of UK small businesses use AI at work. Furthermore, a third (34%) of small business leaders nationwide reported only have a ‘basic understanding’ of AI tools. 

On average, only 12% would refer to themselves as ‘expert’ in the technology, when thinking about their proficiency in five core pillars of AI: Generative AI, chatbots and virtual assistants, speech to text and vice versa, text analysis and summary, and AI-powered text editing. This figure is higher in the North West, with almost a fifth of businesses referring to themselves as ‘expert’ level (17%). 

In the North West, the biggest barriers to further AI adoption were found to be IT security issues (20%) and a lack of appropriate financing possibilities (16%). Insufficient digital skills of employees (14%) was the third largest barrier. 

Within UK smaller businesses there was a clear divide between those at the larger end of the spectrum and those at the micro end when it comes to using AI. The survey found AI is used in 36% of micro businesses (0-9 employees) and 44% of small businesses (10-49 employees) but rises to 60% of medium-sized enterprises (50-249 employees).  

Louise McCoy, Managing Director, Start Up Loans Products, British Business Bank said:

“AI has the potential to transform the way smaller businesses operate, but people running those businesses face a plethora of barriers which need to be overcome if they are to benefit from the technology. We hope our information, as well as start-up financing, one of the biggest hurdles identified, can help drive more use of AI. By adopting AI responsibly, smaller businesses could unlock new opportunities for growth and innovation, ensuring they remain the driving force of the UK economy.”

The government-backed Start Up Loans programme was established in 2012 to help people achieve their ambitions of starting their own business. It provides fixed-interest loans of between £500 and £25,000 to aspiring business owners, many of whom might otherwise struggle to secure finance. The programme also offers pre- and post-loan support packages, including access to Learn With Start Up Loans, a partnership with the Open University, with courses covering key aspects of running a business, that includes advice on how to use AI to grow a business.