Adopting AI could increase small business productivity by up to 133%
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Posted: Thu 17th Apr 2025
Small and medium sized businesses that use artificial intelligence (AI) tools could see the productivity boosted by as much as 133%, according to new research.
The St Andrews Business School study found that adopting AI results in productivity gains of between of 27% and 133%.
The analysis of the government's annual longitudinal small business survey (LSBS) of around 10,000 UK SMEs also found that it is firms with the lowest productivity levels which are most likely to adopt AI technologies.
Researchers said the benefits from AI adoption are sector specific with service businesses, such as catering and hospitality, particularly prominent among the beneficiaries.
Professor Ross Brown, who led the study, said:
Our findings are quite emphatic and show a clear-cut productivity premium for SMEs who adopt AI. Given the UK government's mantra about raising productivity levels, increasing AI adoption could potentially play a pivotal role at addressing the endemic problem of weak productivity in poorly performing SMEs.
"AI potentially offers SMEs "short cuts" that are easy to yield quick productivity "wins", such as planning staff rotas and reducing food wastage in a small restaurant, but are relatively inexpensive and easy to enact."
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