tech2035 opinion - Gifftd on why the UK should rethink its support for SMEs and look to AI
Small businesses and SMEs are the engine of the UK economy, numbering 5.5 million strong. Yet only 36,000 are classified as scalable. That’s less than 1%. We often talk about start-ups and unicorns, but the true opportunity lies in helping the real backbone of our economy grow.
What’s stopping them?
The barriers are familiar: slow digital adoption, fragmented support, limited skills, lack of time and capital. But beneath these symptoms is something deeper, a lack of usable data and credible evidence. SMEs are not seen as “investible” because they are effectively invisible to capital markets, supply chain ecosystems, and public procurement. They lack the data, insights, and integrated infrastructure that larger firms benefit from. And this is precisely where Gifftd believe AI must play a central role.
SMEs are the “Missed Opportunity”
Every major strategy from the UK Industrial Strategy to DSIT’s AI and digital roadmaps recognises that technology adoption is critical to improving productivity. But techUK’s response to the Industrial Strategy Green Paper goes further:
“There is a lack of focus on raising technology adoption across the UK’s long tail of unproductive SMEs… despite their crucial role in improving productivity and economic resilience.” – techUK, 2024 Green Paper Response.
This is a national oversight. The OBR estimates that faster digital and AI adoption could contribute £47 billion per year in value to the UK economy. But adoption alone isn’t the goal.
Why AI Is the Missing Piece in SME Growth
SMEs don’t just need tools. They need AI-powered infrastructure that works like an advisor, analyst, and connector—doing the heavy lifting in areas they don’t have time, staff, or capital to handle.
AI can enable:
- Automation of data collection and evidence generation from everyday operations (sales, impact, compliance)
- Predictive insights to inform better business decisions, funding readiness, and pricing
- Smart matchmaking with relevant capital, grants, commercial tenders, or supply chain opportunities
- Risk profiling and benchmarking to make SMEs visible to banks and corporate buyers on trusted metrics
Most SMEs are not lacking capability—they’re lacking capacity. AI addresses this gap
Why Real-World Evidence (RWE) Still Matters Even More with AI
Digital tools provide infrastructure. But real-world evidence is what builds credibility.
AI can now help SMEs capture, interpret, and package evidence into trusted insights for financial institutions, corporates, and public buyers, without requiring advanced technical know-how.
So why do RWE matter more than ever in the AI age:
1. Validates Performance and Growth
AI can automatically process financials, customer data, or operations to show: Revenue trends, Product-market fit, Cash flow patterns
This replaces one-off reports with real-time dashboards, turning data into evidence.
2. Communicates Value to Funders and Buyers
AI-generated reports can present ESG metrics, delivery records, or workforce development impact in investor-ready formats - reducing the friction that usually deters funders from working with SMEs.
3. Proves Readiness for Procurement and Investment
AI simplifies certifications, compliance checks, or policy alignment evidence - saving time and increasing win rates for SMEs bidding for contracts or raising capital.
4. Mitigates Risk Perception
Banks and corporate buyers avoid SMEs when they can’t assess risk. AI models trained on SME data can now generate trustworthy risk profiles, making SMEs more discoverable and less “risky.”
5. Creates a Feedback Loop for Growth
AI tools don’t just show what happened—they offer insights on what to fix, forecast, and focus on next. That’s strategic capacity made accessible for the smallest firms.
A Smarter Support System: AI-Enabled, Evidence-Rich, Integrated
Imagine a UK national environment where SMEs can use AI tools to generate real-time performance and impact data. Instantly access capital, partnerships, and procurement portals. Share their business case with investors using standardised insights. Receive AI recommendations for scaling, hiring, funding, or exporting, be visible, comparable, and investible on their own terms.
That’s what we’re building at Gifftid AI. But this vision requires more than platforms. It requires policy, infrastructure, and coordinated action.
Our Proposed Action for techUK, DSIT, and UK Industry
If the UK is serious about scaling productivity, exporting innovation, and closing the SME gap, Gifftd believes we need to shift how we support these businesses while leveraging digital and AI adoption, upgrading tech infrastructure.
We call on the UK Government to consider the following:
1. Invest in SME Evidence Infrastructure: Just like broadband or digital ID, SMEs need systems that let them generate and share data with banks, funders, and buyers.
2. Incentivise Outcome-Driven AI Adoption: Fund AI solutions that don’t just digitise processes, but generate performance visibility, investment readiness, and ESG insights.
3. Create a National SME Evidence & Growth Initiative: Convene a cross-sector coalition—banks, tech providers, accelerators, supply chain bodies to define standards, tools, and performance signals that reduce risk perception.
Authors
Grace Castillo
Grace Almendras-Castillo is a seasoned entrepreneur, corporate executive, AI/technology investor, and a dedicated solver of complex problems with a focus on impact to society. A leader who learns from others.