Small and medium-sized businesses in Yorkshire and the Humber could generate an additional £3.1bn in revenue through wider adoption of artificial intelligence, according to research identifying the region as Britain’s slowest adopter of the technology.
Only 64% of surveyed SMEs in the region reported using AI, compared with 79% nationally, according to analysis by the Social Market Foundation.
The figures suggest considerable scope for smaller companies to increase productivity through technology already being adopted elsewhere, although the £3.1bn estimate represents a potential revenue gain rather than money that businesses have already lost.
The findings come from the foundation’s Byte-sized Growth report, which surveyed 1,015 UK SME leaders to examine adoption, business outcomes, and the barriers preventing companies from making greater use of AI.
Its economic modelling estimates that wider adoption could generate between £38bn and £47bn in additional annual SME revenue across Great Britain.
However, adoption varies substantially according to business size. Nationally, 60% of surveyed microbusinesses reported using AI, compared with 86% of small companies and 92% of medium-sized enterprises.
Among those reporting barriers, data security concerns were cited by 33%, questions about output quality or reliability by 31%, and insufficient skills by 26%.
The research also suggests that businesses making more advanced use of AI report stronger commercial outcomes than those applying it only to basic activities.
Time savings and improved quality of work were the most commonly reported benefits among companies already using the technology.
Practical skills remain a barrier —
The findings coincide with weaker employment conditions among Yorkshire’s smallest businesses.
According to the November Intuit QuickBooks Small Business Index, employment at businesses with one to nine employees in Yorkshire and the Humber declined 0.64% during October, the fastest regional fall recorded in England.
The index uses anonymised payroll information and statistical modelling to estimate employment trends. Its findings concern a narrower group of businesses than the Social Market Foundation’s wider SME research.
Financial software company Intuit is expanding its practical AI training programme into the region, with a free session scheduled in Barnsley on 13 November.
The programme, delivered in partnership with the British Chambers of Commerce and Barnsley & Rotherham Chamber of Commerce, will cover AI fundamentals, everyday business applications, and responsible use.
Michael Kennedy, senior vice president and chief corporate affairs officer at Intuit, said smaller companies needed access to practical education alongside increasingly sophisticated software.
Local business owners described challenges extending beyond basic awareness of AI tools.
Dean Pattison, founder of six-person utilities consultancy Utility Source, said: “When you’re running a business with six people, every hour counts.”
He said the company was already investing in its own technology but needed clearer guidance about which applications could reduce administrative work without compromising customer service.
Joada Allen, managing director of Barnsley-based video marketing and training company Visualised It, identified the difficulty of connecting existing digital systems as a barrier to more productive technology use.
The Social Market Foundation recommends additional management training, clearer guidance on data ownership and regulatory responsibilities, and more reliable information about the quality of AI products.
Its proposals include a tiered national support programme and tools designed to help SMEs assess potential applications before committing time and money.
The Barnsley training programme will provide businesses with practical demonstrations, while the underlying research identifies a larger regional opportunity dependent on sustained adoption and effective implementation.
