The rapid integration of Artificial Intelligence (AI) into various business sectors continues to gather momentum, according to a comprehensive report by three senior lecturers from notable UK universities, Dr David Dowell of St Andrews University, Dr Robert Bowen of Cardiff University, and Dr Wyn Morris of Aberystwyth University. Published in the "Senedd Research" on 31 January 2025, the article highlights a significant trend: AI is being adopted faster than any other technology in business, a claim supported by findings from the Forbes Technology Council that named AI the fastest ever adopted technology in 2023.
The UK AI market is now estimated to carry a valuation of £16.8 billion, spurring interest from businesses worldwide. Investment levels in AI vary significantly from region to region, informed largely by the prevailing belief that its implementation will inherently affect job availability. Recognizing these developments, the UK Government has underscored the importance of AI through its UK AI Opportunities Action Plan, which aims to contribute to economic growth, enhance public services, and improve overall quality of life.
Particularly in Wales, opportunities for AI growth have emerged, exemplified by the proposal for a data centre campus in Bridgend. However, there is a marked difference in AI adoption rates between small and medium enterprises (SMEs) and larger organisations. The 2023 UK Innovation Study revealed that only 9% of SMEs utilise AI for production processes, contrasted with 23.3% in larger businesses. The research further indicated that for 'broader innovators', the disparity widens with SMEs at 12.5% against 28.8% for larger organisations; even less, only 4% of non-broader SMEs, employ AI technology compared to their larger counterparts at 13.9%.
In Wales specifically, the uptake of AI in SMEs stands alarmingly low at just 7.42%, compared to 9.78% in England, 8.08% in Scotland, and 9.50% in Northern Ireland, emphasising a consistent trend seen since 2021. AI adoption is posited to enhance business performance and could contribute approximately 3.4% to annual productivity growth, presenting a clear opportunity for SMEs to improve their operational processes in sectors like marketing, transportation, and data analysis.
The article scrutinizes the landscape of AI adoption among rural SMEs in Wales, highlighting both the advantages and the obstacles faced in this transition. This demographic often grapples with specific challenges, including workforce attraction, logistics, and innovation, yet AI offers a pathway to address these issues. However, the compatibility of AI with the Welsh language remains an unresolved concern and requires further development. Additionally, technological barriers such as internet access, mobile coverage, cyber risks, and the costs associated with AI tools could inhibit progress.
The potential for AI to improve productivity in rural SMEs is significant, driving local economic benefits. It's presented not as a wholesale replacement of existing processes, but as a means to enhance low-level business functions incrementally. The authors identify that while overall adoption rates remain low, there are substantial opportunities for integrating AI into rural SMEs incrementally—specifically in production and construction, business services, and transport sectors.
The effectiveness of AI uptake in rural SMEs is largely influenced by internal and external organisational factors and the willingness of businesses to engage within networks. Minimal staff training is needed for basic AI integration, making it relatively simple for SMEs to adopt. Furthermore, sustainability practices have been linked positively to AI adoption, motivating SMEs with environmentally conscious agendas to embrace the technology, even though AI's energy consumption presents a paradox.
Policymakers are urged to consider these factors in the formulation of strategies to promote AI adoption within rural Welsh SMEs. Initiatives should focus on those enterprises that are less innovative or environmentally driven while also raising awareness about both the benefits and drawbacks of AI technology. Networks already present in rural landscapes, such as Farming Connect, may serve as platforms to promote AI by showcasing successful local applications and encouraging broader participation.
In conclusion, the insights gleaned from the research conducted by Dr Dowell, Dr Bowen, and Dr Morris indicate that a lack of AI adoption could lead to disparities among businesses in Wales, making it imperative to foster awareness and understanding of AI among rural SMEs. With applications ranging from basic to advanced levels, it's suggested that local networks can provide the support necessary for these businesses to successfully integrate AI solutions, thereby enhancing their operational capacities and positioning them for future success.
Source: Noah Wire Services