TL;DR

Ask a Yorkshire mid-market business what worries it most about the next six months and roughly a quarter will say AI — ahead of softening customer demand and ahead of higher taxes. BDO’s bi-monthly Mid-Market Tracker, covering 500 firms turning over £10m to £500m, puts the figure at 24%. The response is not retreat: 41% intend to speed up spending on AI or automation.

The skills problem underneath it

The concern is less about the technology than about the people expected to run it. Some 26% of Yorkshire firms admit to uncertainty about which capabilities they will require down the line. Nearly half, 47%, report a specific AI skills gap in entry-level recruits — the cohort employers usually rely on to arrive already fluent in whatever is new.

That combination is awkward. Firms are committing capital to AI while uncertain what capability they are buying it for, and finding that the traditional route to fresh skills is not delivering them either.

What it says about the national picture

Government figures published earlier this summer showed self-reported AI use across UK businesses climbing from roughly 12% to about 35% in the period since late 2023, and bigger companies further ahead. Set that against the Manchester and Edinburgh research also published this week, which found adoption concentrated in London and the South East and warned it could entrench regional divides. The BDO data is what that looks like from inside a region: adoption rising, confidence not keeping pace.

Dan Brookes, BDO’s partner for Yorkshire and the North East, pointed to the practical obstacles rather than the ambition. “Given the rapid rate of technological change, there are clearly still significant challenges facing businesses when it comes to transitioning from legacy systems, scaling technology, and sustaining new AI models, often hindered by workforce capability gaps,” he said, adding that AI champions help but more support is needed.

Looking forward

For business leaders outside the South East, the useful signal is that peer firms are not hanging back — 41% are accelerating investment. The risk this data exposes is spending ahead of a skills plan. Naming the capability you need before signing the contract is unglamorous, and it is the step most likely to determine whether the investment returns anything.