UK businesses widen AI adoption but limit deeper operational use

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UK businesses widen AI adoption

Highlights

ONS data shows UK businesses increased average AI tools used from 1.4 to 1.6 since 2023, indicating limited deeper operational deployment.
AI adoption rose to 35 per cent among UK firms with over 10 employees and 48 per cent in large companies, but only 10 per cent use it extensively.
60 per cent of businesses cite operational efficiency as the primary AI driver, while fewer than 20 per cent use it for product development, with creative roles and clerical jobs most impacted.

ONS data shows shallow deployment patterns

As reported by Financial Times, citing the Office for National Statistics, the average number of AI tools used by businesses has increased only slightly since 2023, rising from 1.4 to 1.6 despite rapid advances in the technology. The agency says this suggests limited transformative effects for most firms that have adopted AI.

About 35 per cent of UK businesses with more than 10 employees report using AI, up from 12 per cent in September 2023, while the share reaches 48 per cent among large companies. Even so, only one in 10 businesses using AI says it does so extensively, and 15 per cent say more than half of employees use AI in their daily work.

Large language models are the most widely used tools, followed by visual content creation. In most sectors, free tools are the most common option, although businesses in technology, professional services and construction are more likely to pay for external software or build in-house models.

Productivity debate and sector impact

The findings arrive as economists debate the reasons behind a recent improvement in the UK's weak productivity growth. Some see early signs of an AI-driven uplift, while others argue that gains in GDP per hour worked may reflect job cuts in low-wage sectors over the past two years rather than a broad technology effect.

The ONS analysis indicates that AI use remains relatively low in retail and hospitality, the sectors where job losses have been most visible. It also says there is limited evidence so far that AI is affecting overall employment, with most businesses saying headcount is unchanged, the impact is uncertain, or the question is not applicable.

Businesses are more likely to use AI to improve operational efficiency than to create new products or services, with 60 per cent citing cost and efficiency goals and fewer than one in five pointing to product development. Creative and design roles are a notable exception in employment effects, while more than half of businesses using AI for image processing say clerical and administrative jobs have been affected.

In our earlier coverage of UK CFOs’ rising optimism about AI, we noted that finance leaders at major companies increasingly see AI as a potential driver of operational improvement. At the same time, they remained focused on cost reduction and cash control, reflecting ongoing concerns about the UK’s productivity and competitiveness even as some external risks eased.

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