AI Adoption Helps Small Businesses Grow Faster

Small businesses that are using artificial intelligence (AI) as part of their business operations are growing faster, creating more jobs and generating more revenue than those that don’t.

This data, published in Venture Forward’s annual report, illustrates how this entrepreneurial spirit manifests with microbusiness owners betting on themselves. The analysis comes from Venture Forward, a multi-year, international research project from GoDaddy that analyses data from more than half a million British microbusinesses.

It shows the transformative effect that investment in technology has had on Britain’s microbusinesses, with those harnessing AI for their business, reporting significantly improved growth prospects.

AI Driving Job Creation

While some narratives suggest that AI may lead to the loss of jobs, GoDaddy’s data suggests that among microbusinesses it is quite the opposite. Microbusinesses using AI are twice as likely to employ at least one other person than those that do not, while nearly half (47%) of employees are at AI-supported businesses work full time, compared to 34% of employees at non-AI businesses.

Entrepreneurs are utilising the technology to automate time-intensive jobs such as copy-writing (70%), summarising information (51%) and content creation (40%), which is allowing many to focus on expansion.

Meanwhile, in the next twelve months, more a third (36%) of entrepreneurs using AI plan to hire more staff, compared to one in six (15%) who are not. They were also three times as likely anticipate “substantial” workforce expansion in the coming year.

AI-Enabled Microbusinesses Outperform Their Peers

Microbusinesses utilising AI are also generating higher revenues and are more bullish on their prospects. One in five (19%) entrepreneurs using generative AI report annual revenues over £100k, compared to 15% of those that are not.

Looking ahead, four in five (78%) AI-supported microbusinesses expect revenue growth over the next year, versus three in five (58%) not using AI. Additionally, 60% of entrepreneurs utilising AI anticipate personal income growth, compared to 40% of non-AI users.

Microbusinesses Vital To Economic Growth

Analysis of Venture Forward data by economic consultancy Frontier Economics demonstrates the importance of microbusinesses to the national economy.

Every new microbusiness founded generates five new jobs, through direct and indirect factors. Analysis of microbusiness density, which measures the concentration of microbusinesses against local population sizes, found just a 10% increase in regional microbusiness density correlates to a £320 hike in median annual wages for full-time workers.

Andrew Gradon, Head of GoDaddy UK and Ireland commented: “Generative AI may be relatively new, but it’s already demonstrating a sizeable impact on Britain’s microbusiness community. AI has enormous potential, and now we’re starting to see results. Entrepreneurs embracing generative AI are enjoying increased revenue and enhanced business prospects. It’s enabling them to be more ambitious with their plans as they look to scale and take on additional employees."

"Microbusinesses are vital to the national economy, generating jobs and increasing wages in their local communities. Our Venture Forward research has demonstrated that encouraging AI adoption is key to ensuring this demographic thrives and can continue to drive growth.”