Trust gap threatens £42bn small-business AI prize, FSB says

TL;DR:

  • AI use among UK small firms has nearly tripled to 55% in two years, but 92% now worry about the risks.
  • The FSB estimates wider, deeper adoption could add more than £42bn a year to the UK economy.
  • It is calling for clearer rules, including standardised “model cards” and stronger data and liability protections.

A lack of trust around data, copyright and legal liability is holding back wider AI adoption among small businesses, even as new Federation of Small Businesses research suggests the technology could add more than £42bn a year to the UK economy. Adoption has surged — 55% of small firms now use AI, up from 20% in 2023 — but anxiety has risen alongside it, with 92% of owners worried about the risks, compared with 73% two years ago.

Realism, not refusal

The headline concerns are inaccurate outputs, security, misuse of intellectual property, opaque training data, legal liability and uncertainty over responsible use. Yet the picture is far from sceptical: 59% of adopters report productivity gains, 24% higher revenue and 22% business growth, with firms seeing an average 3% revenue uplift. Only 8% said AI had helped them cut staff — a useful corrective to the automation-equals-redundancy narrative. The findings draw on a survey of 904 small-business owners.

The FSB wants government to provide the “rules of the road”, including standardised model cards setting out how business data is used, stored and whether it trains models; clearer liability when things go wrong; stronger IP protection; practical support from DSIT; and tax incentives to invest. “Business owners can see the potential, but they are also asking sensible questions,” said policy chair Tina McKenzie. The data complements Google’s finding that UK AI use has hit a “tipping point” and the skills gap reported by London firms.

Looking forward

For Resultsense’s core audience, this is the most directly relevant data point of the week. The numbers suggest the barrier to AI’s economic payoff is no longer awareness or even access — it is confidence. Small firms are adopting, seeing results and yet hesitating to go deeper because the governance scaffolding around data and liability remains unclear. If government delivers the certainty the FSB describes, the constraint shifts from trust back to capability. The £42bn figure is an estimate, but the underlying message is concrete: the bottleneck is now policy and assurance, not enthusiasm.

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