More UK small businesses using AI tools but barriers still persist for ongoing digitalisation

March 21,2024

New research from IONOS, the leading European digitalisation partner for small and medium-sized businesses, has revealed an increase in AI tool adoption among SMBs – rising from 14% in August 2023 to 20% in January this year. However, the barriers they face in furthering their digitalisation efforts, including lack of time and costs, are unchanged from 2023.

For the fourth consecutive year, IONOS, in partnership with YouGov, polled 1,005 UK SMBs with up to 250 employees, to understand how digitalisation is supporting business priorities. The study uncovered the factors that are considered important for driving business performance and any challenges holding SMBs back.

Overall, SMBs in the UK are realising the benefits of digitalisation with over four in five (82%) deeming it useful for their presence and ease of discovery online, compared to 78% in 2023. Three quarters also agree it is good for winning new customers, a slight increase from 72% in 2023. Other key findings include:

• AI is already delivering value – More SMBs are seeing the value of AI tools, with 20% now using tools regularly compared to 14% in August 2023.
• Visibility the top priority – Ensuring greater visibility of their company on the internet continues to be the primary focus area for digitalisation (52%), with IT security and data protection the next highest priority (43%).
• Biggest barriers are still the same – However, the same barriers to digitalisation still exist with almost half (48%) of UK SMBs believing lack of time is the biggest barrier, a slight increase from 45% in 2023. Costs (46%) and lack of know-how (38%) were also growing issues.
• Training is a priority for cyber security – Almost half (44%) of SMBs are now training staff on the safe use and secure operation of IT or the cloud, compared to 35% in 2023. However, 7% are not doing anything to protect themselves from cyberattacks, unchanged from 2023.

The survey also showcased how UK SMBs compare to their counterparts in France, Germany, Spain, and the US. In the UK, uncertainty around security and data protection was minor, with less than a third (30%) seeing it as a major barrier to digitalisation, compared to 43% in Germany and 44% in the US – this rose to 51% in France and over half (59%) of Spanish respondents. Energy costs was also a significantly bigger obstacle in some markets, with 48% in Spain and 44% in France, compared to 21% in the UK.

The data used is based on an online survey conducted by YouGov on behalf of IONOS among a total of around 4,800 people from small and medium-sized companies with up to 250 employees in Germany (1,005 people), the UK (1,005 people), Spain (1,002 people), France (801 people) and the USA (1,001 people) in January 2024.