Ministers must build trust in artificial intelligence if small businesses are to adopt the technology with confidence, the Federation of Small Businesses has said.
The trade body issued the warning after Prime Minister Andy Burnham gave Kanishka Narayan, the AI minister, a seat at the cabinet table.
Its report, The Confidence Code: The Challenges and Opportunities of AI for Small Firms, found that 59% of small business AI users had achieved productivity gains, while 24% had increased their revenue.
Businesses using AI reported an average revenue increase of 3%. The FSB estimated that encouraging deeper adoption could add more than £42 billion to the UK economy each year.
However, although AI adoption among small firms has almost tripled since 2023, 92% still have concerns about matters including data security, copyright and liability.
About a third, or 34%, said better guidance on implementing the technology would encourage adoption, while 31% wanted support to use AI legally, ethically and responsibly.
CALL FOR PRACTICAL SUPPORT
The FSB called on the AI minister to use his cabinet position to co-ordinate work across government. Its proposals include a government-backed Responsible AI Essentials certification scheme and adoption vouchers to help businesses implement the technology safely.
It also wants clearer guidance and training through the AI Skills Hub, alongside standardised AI model cards explaining how providers use business data and where responsibility lies when problems arise.
Tina McKenzie, policy chair of the Federation of Small Businesses, says: “FSB is calling on the AI Minister to use his Cabinet role to lead efforts across Government to deliver the changes.
“It’s great to see the new Government taking AI seriously and recognising how important it’s becoming to the economy.
“The technology is moving at pace, but too many are asking basic questions about data, copyright and liability, and they deserve clear answers.
“The new AI Minister has a real opportunity to make the UK the best place in the world for small firms to adopt AI, but that will only happen if he puts trust at the heart of the Government’s approach.
“That means giving them clear answers on who owns AI-generated content, how their data will be used, and who is responsible when things go wrong. He also should use his role to ensure small firms are not left to navigate this rapidly changing technology on their own.
“They must have access to practical guidance and support to help them adopt AI safely and confidently.
“If he gets it right, more small firms will embrace AI and that in turn will increase productivity. But if trust is overlooked, the UK risks holding back thousands of businesses that are ready to take the next step.”
