Picture two businesses on the same British high street. A café owner is using AI to manage bookings and forecast demand. Nearby, a florist still relies on paper records and instinct, unsure where to begin.
This divide isn’t simply down to personal choices. Research just published by OpenAI shows that AI adoption among Britain’s small and medium-sized businesses is shaped by the size, sector and location of those businesses, and the age of the people who lead them.
Left unchecked, this gap will harden into something more permanent. At the very moment the UK is trying to escape low growth, it risks locking in a new economic imbalance. Our research shows that in London, a whopping 93 per cent of firms now use AI at work; but in Yorkshire, the southwest and Scotland, roughly a quarter still do not. The age divide is also striking, with 40 per cent of small business leaders aged 55 and over not using AI, compared with only 8 per cent of those aged 18 to 34.
Failing to address this will drag on the government’s ambitions to spread prosperity beyond our capital and to improve Britain’s poor record on productivity. To her great credit, Rachel Reeves has the right ambition. In her recent Mais Lecture, the chancellor set out an ambition for Britain to achieve the fastest AI adoption in the G7. There are some positive signs. OpenAI has just announced that our largest research hub outside of the US will be located here; but look beyond tech hot spots in cities like London, Manchester and Leeds and one in three of our smallest firms aren’t using AI at all.
Data security and privacy concerns hold many businesses back, especially smaller firms without the compliance resources or in-house expertise to adopt confidently. We’re addressing that. Skills are another major obstacle: among businesses yet to adopt AI, almost a third point to training and skills as a barrier. Fewer than half of business owners aged over 55 are comfortable using the new technology.
Other European countries are making much bigger steps to embed these new skills in education and their business support programmes. The tech industry also needs to step up. We have to ensure the AI revolution is managed to benefit all. That’s why our SME AI Accelerator is convening 200 small British businesses this month for a hands-on workshop, alongside free online training through the OpenAI Academy.
AI is not something businesses can come back to later. It is quickly becoming the baseline for how work gets done. If the UK is serious about improving productivity and growth, closing the AI adoption gap must be an economic priority.
George Osborne is managing director and head of OpenAI for Countries