Powering productivity: why small businesses are pivotal to the UK's digital and economic future

As the UK looks to chart a course toward long-term, inclusive economic resilience, one group remains vastly under-leveraged: small and medium-sized enterprises (SMEs). These companies have always been central to the UK economy, driving innovation and job creation. With the right tools and policies, today’s SMEs can scale faster, compete more effectively, and unlock even greater potential to jumpstart growth.

Signs of momentum

The Intuit QuickBooks Small Business Insights Survey reveals that 36% of SMEs are currently growing—a sharp rise from 21% in July 2024. This is a promising sign of renewed economic activity and optimism across the small business sector. But to sustain and broaden this growth, more firms need support in adopting and integrating new technologies.

The AI edge

AI is quickly becoming an essential part of the modern SME toolkit. Among firms already using AI, 77% have reported improved productivity, with nearly half seeing benefits in under three months. These tools are helping businesses reduce manual admin, personalize customer engagement, forecast more accurately, and optimize financial planning.

Yet adoption is uneven. One-third of UK SMEs have yet to embrace AI, missing out on critical efficiency gains. The International Monetary Fund estimates that full AI adoption among UK SMEs could add an additional £470 billion to the UK economy by 2035.

There is also an urgent need to challenge the perception that AI is only for big business. In reality, some of the most impactful uses of AI are in solving everyday pain points—automating invoicing, managing inventory, or generating the first draft of marketing content. When positioned this way, AI stops being a buzzword and becomes a practical lever for growth.

Tackling the adoption gap

That’s why it’s so important to help prepare business owners who feel unprepared to navigate AI adoption. While 40% of them prioritize productivity, only 21% are planning to upgrade tech infrastructure. Often, businesses adopt tools in isolation, leading to disjointed systems and inefficiencies.

This can look like software programs that don’t sync up and transfer data like they should, overly advanced tools that come with a steep learning curve, or confusion about which tools meet important compliance requirements—all leading to lost time and money, and an understandable hesitation to start the cycle over again.

A Smarter Infrastructure for SMBs

Still, more is needed. The UK must treat digital enablement for SMEs as a core part of its economic infrastructure. This includes targeted tax relief, widespread access to training, and expert guidance on selecting and integrating AI tools.

Earlier this year, Intuit launched the Small Business Growth Council to help give entrepreneurs a voice in shaping smart policy, and to help ensure government understands the urgency and opportunity before them. A major early success was the inclusion of national AI champions in the UK Industrial Strategy. Another was the government’s commitment to train 7.5 million workers in AI by 2030.

In addition to policy reform, there’s a vital role for industry to play. Tech providers must focus on designing solutions that are not only powerful but also intuitive, cost-effective, and tailored to the unique needs of smaller firms. This means removing friction from onboarding processes, providing ongoing support, and ensuring that SMEs can see tangible value quickly. It also means stronger partnerships between large technology companies and local business networks to close the information gap.

Community-led transformation

Local communities, too, can be a driving force. Regional digital hubs and business support organizations can play a critical role in building AI confidence among entrepreneurs. Peer-to-peer knowledge sharing and access to real-world case studies can help make AI less abstract and more actionable for time-pressed business owners.

The bottom line

The groundwork has been laid but policymakers and business leaders alike must now move faster and more cohesively. While the Industrial Strategy offers a strong starting point, unlocking real growth will require a sharper focus on the transformative potential of AI.

The Digital Economy is accelerating at break-neck speed, and to remain competitive on the global stage, the UK needs to match the speed of innovation with equally agile policy and delivery. The message from SMEs is clear: They want to use it as a springboard for growth. But they need support to turn potential into performance.

If we get this right, small businesses won’t just boost productivity—they'll power a stronger, fairer, and more resilient economic future for the UK. The tools are there. Let’s get them into the right hands.

We've featured the best small business website builder.

This article was produced as part of TechRadarPro's Expert Insights channel where we feature the best and brightest minds in the technology industry today. The views expressed here are those of the author and are not necessarily those of TechRadarPro or Future plc. If you are interested in contributing find out more here: https://www.techradar.com/news/submit-your-story-to-techradar-pro