03 Jun 2025
by Grace Castillo

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 Castillo

Founder & CEO, Gifftid

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.

Currently, Grace directs her focus towards addressing the hurdles in achieving a fair distribution of financial capital, commercial opportunities for impact enterprises. Recognizing the transformative potential of untapped human talent with ambition she aims to empower global impact entrepreneurs, industry and investors through Gifftid. By leveraging technology, data, information, bringing together passionate minds, capital, and impact investors via an innovative digital intelligence platform, Grace is poised to make a significant impact.

With over two decades of global experience in consumer healthcare, life sciences, she achieved a successful exit with the acquisition of Self Care Catalysts, a trailblazing digital health company. Grace now ventures into new territories with Gifftid, challenging conventional norms once again. Her pioneering role in digital health transformation has earned her numerous accolades, including recognition as one of the Top 50 Women in STEM in Canada, an E&Y Entrepreneur of the Year Nominee, and a Springboard Enterprises Alum, JLabs alum, MaRS alum among others. She is a Health Innovator and holds patents for Health Storylines, a digital health platform.

Dedicated to continuous learning, Grace has completed various programs including an Impact Investing, Social Finance and Impact Management at University of Oxford, Executive Development Program from The Wharton School of Business at the University of Pennsylvania, Entrepreneurship studies at The Rotman School of Business at the University of Toronto, and Sustainable Finance and Impact Frameworks at the Yale School of Management, among others. Hailing from a family of women entrepreneurs and micro-finance investors, she upholds the legacy of providing opportunities for impact investing and meaningful impact.

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