How a Cohesive Nationwide AI Policy Can Unlock Massive Growth Potential for Thousands of UK SMEs

Marmalade Marketing MD Jo Perotta, alongside Kavita Cooper, founder and chief executive of Reading-based Novo-K and Buying Station, which provides procurement software, and Rana Harvey, founder and MD of online homeware retailer Monster Group are all fully committed to continuous learning which is why they make the effort to take time out every few months to work ‘on’ their business, instead of ‘in’ it. In fact, they all recently attended a prestigious 12-hour AI themed Hackathon which culminated in a visit to Number 10 Downing Street in December 2024. Business and Investment Special Advisor to the Prime Minister, Varun Chandra, invited Jo, Rana and Kavita, along with other Alumni to attend a 10KSB & No10 Policy Workshop to build on ideas which were initially published in February 2024’s Generation Growth: The Small Business Manifesto.

This manifesto was led by representatives from Goldman Sachs and The University of Oxford, alongside graduates from the 10,000 Small Businesses (10KSB) UK alumni community. It culminated in an AI policy pitch presentation which offered the Government a set of recommendations on how it and the wider business ecosystem deliver this support to small businesses, and the impact this will have on the longer-term growth of the national economy. So instead of working on just Marmalade Marketing, Novo-K, Buying Station and Monster Group, it’s safe to say it was a real privilege for Jo, Kavita and Rana to be invited to contribute to this conversation around AI and the wider SME business community.

Their pitch was delivered to The Rt Hon Robert Halfon, Former MP and Minister of State for Skills, Apprenticeships and Higher Education and Liz Scott, Director of Turing Innovation Catalyst Manchester, which aims to accelerate Greater Manchester's £5bn digital economy by supporting existing start-ups and creating new ones - especially in the field of AI.

You can read the policy findings in their entirety here but it essentially focuses on the enormous challenges UK SMEs face and how they can work with the government to support the national mission for growth, as well as the new small business strategy due in spring next year.

The wishlist for SME growth included easier access to funding, subsidised AI training and employability skills embedded into the school curriculum. 

The event comprised seven workshops - including access to finance, talent and the workforce, taxation and trade, international markets, AI, the climate transition and infrastructure - all of which gave a brilliant insight into how UK small businesses are tackling these challenges head-on.

And now, while the government is receptive to the ideas being presented, action is required to bring the blueprint to life. 

This is because, while most businesses recognise the power of AI, according to the Small Business Manifesto, only 46% are actually using it. This means more than half of small and medium-sized businesses are missing out on the significant opportunities AI can bring.

AI ultimately offers two major advantages:

1. It drives huge efficiencies, automates processes, cuts down on time-consuming tasks and enables businesses to do more with less.

2. It actively creates revenue by unlocking new opportunities in unexpected and out-of-the-box ways.

So why aren’t more businesses adopting it? We believe that the biggest barrier is a lack of education. Many business owners simply don’t know where to start, what’s relevant to them or how to integrate AI tools and platforms into their existing processes. There’s so much information available online that it becomes overwhelming rather than helpful. Better education is key - and not just around how AI works - but in how to use it effectively, ethically and safely.

Within that, security concerns like GDPR, data breaches and AI compliance need to be properly addressed, giving businesses the confidence to embrace AI without fear of risk. If education and accessibility improve, the UK has the potential for phenomenal growth. Not only could businesses become more competitive, but the UK could also position itself as a world leader in AI, driving innovation and economic success on a global scale.

SMEs - like most businesses have competing priorities - so to deeply integrate AI into organisational culture, to ultimately support growth, there is a need to provide clear and attractive incentives to business leaders. As leaders, a number of options and actionable steps to make AI a driving force for organisational growth. They included:

1. AI-Specific Training Grants: Building Knowledge at Every Level

In the realm of AI, knowledge is much about profit as it is about power. Offering grants for AI training - like the government’s recent AI Upskilling fund - which are tailored to different skill levels, are imperative not least because they ensure that employees at all levels are equipped to integrate AI into everyday business practices, processes and operations. This isn’t just about learning how to navigate new tools and platforms, it’s about fostering an AI driven mindset that unites an organisation.

Why it works: Subsidised training lowers the barrier to entry and accelerates adoption,
making AI an accessible and integral part of every SME’s toolkit.

2. Access to Debt Funding: Fuelling Innovation and Training

Debt financing, a form of business finance that involves a company borrowing money from a financier like a bank or working capital funding organisation, has the potential to be a real game changer. These funds can be reinvested into innovative AI technologies and the continuous upskilling of employees. By creating a financial gateway for tangible AI initiatives, SMEs can take calculated risks that lead to revenue boosting rewards.

Why it works: Flexible funding provides SMEs with the capital they need to experiment, innovate and grow their AI strategy without the immediate pressure of high costs.

3. Certification for Opportunities: Tying AI to Procurement and Growth

Public sector procurement could require AI certification as part of the new Procurement Act, which came into force on February 24, 2025 and will change how the public sector buys goods and services. When it comes to AI, the act will encourage SMEs to invest in systems and processes, knowing that certification opens the doors to lucrative contracts and partnerships.

Why it works: Linking certification to tangible benefits motivates businesses to adopt AI
systematically, driving both compliance and growth.

The Bigger Picture: A Global Leadership Opportunity

By combining these three strategies, the UK can position its SMEs as global leaders in leveraging AI for growth. This isn’t just about individual businesses thriving, it’s about fuelling the wider economy with the tools it needs for real innovation, change, productivity and resilience.

The path moving forward is clear, SMEs that embrace AI systematically and strategically will have the tools they need to outpace the competition. With the right incentives in place, integrating AI into a business’s organisational culture isn’t just a possibility, it’s an inevitability.