Smaller businesses are the engines of the UK economy but right now, too many are stuck in first gear. Right now, 36% of small businesses are growing—an encouraging sign, up from 21% in July 2024—but most small firms are ready to put their foot on the accelerator.
Those using digital tools are shifting into higher gears: boosting revenue, increasing sales confidence, and enhancing productivity.
Yet one in three small businesses still haven’t tapped AI tools. That’s a missed opportunity the UK can’t afford. In fact, the IMF estimates that small and medium-sized businesses fully embracing AI could help grow the UK economy by £470bn by 2035.
With many businesses stuck at red lights, we need the right policies and support to close this digital divide and drive a new era of inclusive, nationwide growth. As we ask “Where’s the growth?”, new survey data of nearly 1000 small businesses provides an answer: it’s in the hands of small businesses ready to scale and in the AI tools ready to serve them. But they need access to the right tools, digital skills and critically, the right policy support to reach their full potential.
Artificial intelligence is the turbocharger of the small business world. New data from the Intuit QuickBooks Small Business Insights Survey shows a significant shift in how SMBs are putting AI to use to help them go faster and farther:
- 77% of small businesses now say AI has boosted their productivity—up from about 40%, a number which had held steady over the past three quarters.
- More than 3 in 5 (63%) now use AI regularly, a 50% increase from July 2024, and nearly 1 in 6 now say AI is a “core component” of operations.
- Nearly half (47%) say their productivity has improved over the last 3 months alone.
- Small businesses are sharing where AI is helping them most: with administrative tasks (38%), marketing (38%), data processing (36%), customer service (35%), bookkeeping (30%), financial planning (23%), and innovating (22%).
These numbers are proof positive of technology’s power to put small businesses in the fast lane—and that some small businesses have already shifted gears and are moving into position.
Increasing productivity— i.e. getting more output without increasing costs—is a key priority for 40% of small businesses. In an environment where high and rising costs remain the biggest challenge small businesses face, digital tools and embedded AI capabilities are already helping to improve efficiency, save time, and make fewer errors.
Yet only 21% are looking to upgrade their systems, including software, AI tools, or other digital technologies. Some firms are clearly lacking the understanding of how to make the productivity improvements they seek. And there are other obstacles: too many apps don’t communicate or work together as they should, resulting in time lost and operational friction that undermines the benefits of digital adoption.
Without proper guidance and relevant resources, businesses risk installing new systems that do more harm than good—like fitting racing tyres without checking the brakes. To keep productivity gains speeding ahead, it’s essential we remove friction and streamline the journey.
