AI remains top challenge for Scottish businesses as adoption across UK surges

Almost four in ten mid-sized businesses in Scotland plan to accelerate AI investment in the coming months, a new survey suggests.

Despite the use of artificial intelligence in UK businesses rising in the last three years, AI adoption remains one of the biggest challenges facing firms in Scotland, according to accountancy and advisory firm BDO’s bi-monthly mid-market tracker.

Almost a quarter (24 per cent) of businesses north of the Border rank AI adoption and technological change as one of their top concerns over the next six months, outweighing reduced customer demand and spending and access to finance. As a result, 37 per cent plan to accelerate investment in AI or automation in response, with the aim of improving productivity.

Almost a quarter of businesses in Scotland rank AI adoption and technological change as one of their top concerns over the next six months.

Earlier this summer, the UK government published figures showing that “self-reported” use of AI in UK businesses - with ten or more employees - has increased from around 12 per cent to around 35 per cent since late 2023, with larger firms more likely to have adopted AI.

Despite the spike in AI take-up, BDO’s tracker - a survey of 500 businesses with revenues between £10 million and £500m - highlights the pressures still facing businesses, with particular concern around skills.

According to the report, just over a quarter of Scottish businesses (26 per cent) are uncertain over what skills the business will need in future, with 44 per cent identifying a specific gap in AI skills among entry-level recruits.

Chris Milborrow, digital transformation director at BDO in Scotland, said: “As part of the government’s industrial strategy, ministers have set out ambitious plans to accelerate AI adoption across a raft of sectors, aimed at boosting productivity, supercharging economic growth, and unlocking billions in added value.

“That ambition is shared by many regional businesses looking to embrace and leverage AI to improve operations. However, given the rapid rate of technological change, there are clearly still significant challenges facing businesses when it comes to transitioning from legacy systems and ways of working, identifying key use cases, and embedding and sustaining AI.

“While the role of AI champions is a positive move, it should form part of a wider support ecosystem to ensure the tangible benefits of AI to Scottish businesses match their ambitions and expectations,” he added.

A survey last month indicated that a majority of Scottish firms plan to step up investment in AI to upskill their workforces.

Some 54 per cent of businesses said they planned to increase such investment in the coming year, according to the findings from the latest Bank of Scotland Business Barometer.

Of those increasing investment, 34 per cent expect to spend between £25,000 and £100,000, while 29 per cent expect to spend between £100,000 and £250,000.

The research indicated that 48 per cent of the country’s firms were using AI, compared with 61 per cent UK-wide, and 38 per cent of those using the technology said it had created new jobs in their business, against 54 per cent across the UK.

Scotland powering ahead as AI tech moves to change the world, for better or worse