77% of UK small business owners are concerned AI development and adoption is outpacing regulation
New research from Xero, the global small business platform, has revealed that UK small business owners are concerned that AI development is outpacing regulation and a third (32%) want more training and resources to support AI adoption, as generative AI tools permeate various industries and the workforce.
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Xero’s Future Focus AI research surveyed over 500 UK small business owners – and 3000 globally – on what they are thinking, feeling and doing about AI and emerging technologies. It revealed that nearly two-thirds (64%) believe emerging technologies such as AI will have an impact on their business in the next five years.
Small businesses are recognising the benefit of AI, with a quarter (24%) planning to experiment with available AI tools in the next 12 months to stay ahead of the curve. But there is some caution and 39% of UK small businesses say data privacy is the biggest ethical challenge to adoption for them.
Alex von Schirmeister, EMEA Managing Director at Xero, said, “Our research shows that UK small businesses are recognising the benefits of AI but more knowledge, training, and regulation is needed to ensure the nation’s smallest firms are not left behind and can continue to thrive. Xero’s always looking at how we can bring new technology safely into the hands of customers, in a way that will make a positive difference in their lives. It’s about putting the customer first; not shipping lots of AI features for the sake of it.”
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Taking steps to mitigate the risks
Many small businesses are proactively exploring ways to use AI in their organisations. A quarter (24%) are experimenting with or investing (16%) in new AI tools, 16% are dedicating more resources to AI use, and 14% are working with third party AI experts. But, 46% of UK small businesses aren’t taking any proactive steps – higher than any other region surveyed and the average of 32% globally.
While exploring the benefits of AI, mitigating any associated risks is a big concern and focus for businesses. The top actions taken by small businesses to help manage the risks of generative AI tools include providing training to employees on identifying biases or inaccuracies (20%), creating policies and guidelines for employees (18%), and establishing procedures for any AI-related incidents (17%).
Despite these concerns, many are trusting AI tools with sensitive data, highlighting a need to support them in assessing security and privacy risks. For example, almost half (49%) of UK small businesses said they trust AI with identifiable customer information, while 40% trust AI with their sensitive commercial information. By being too comfortable with sharing personal identifiable information with AI tools, many small businesses are putting their data at risk. Xero is guided by its responsible data use commitments and strives to support customers navigating data use.
New guide for advisors to help small businesses navigate the world of AI
There is a clear desire for greater education and support, with a third (32%) feeling that training and resources on using AI to increase productivity is necessary for their business. Using AI to increase productivity (35%) and responsible AI practices and the ethical considerations (26%) were also the top knowledge areas that small businesses owners felt were necessary.
As accountants and bookkeepers become trusted advisors to small businesses on new technology and how it can be used, Xero has published the Future Focus: AI Guide for Accountants and Bookkeepers to help them navigate the impact of AI on their practices and clients.
“We wanted to cut through the hype and answer a really simple question: what does AI mean for your typical practice? The Xero guide is intended to help accountants and bookkeepers make well informed choices when it comes to using AI tools, to help manage the risks and realise the benefits for them and their small business customers,” said von Schirmeister.
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