Across the business world, AI has become the topic everyone’s talking about. We spoke to David Darlington, Associate Director at Accenture Newcastle, about how North East SMEs can capitalise on the AI revolution to drive business growth.
The artificial intelligence (AI) revolution is a present-day reality and a major economic engine for the North East of England. Our region has been designated a national AI Growth Zone (AIGZ) and is set to attract £30 billion in potential investment and create over 5,000 high-skilled jobs.
While the UK's multinationals are leading AI adopters, slower uptake among smaller firms is holding back national progress. Ensuring AI is adopted safely, effectively, and swiftly will strengthen our global competitiveness and unlock new growth opportunities for SMEs. The North East AIGZ provides an opportunity to partner with Government and lead coordinated efforts to drive AI adoption, with a strong focus on supporting SMEs and tackling the unique challenges they face.
This article is designed to provide SMEs with a practical roadmap to confident AI implementation.
What is AI and what does it mean for small businesses?
Artificial intelligence (AI) is technology that enables computer systems to perform tasks that normally require human intelligence, such as decision-making, speech recognition, and content creation. For an SME, it is best seen as the intelligent engine within modern software; working to automate processes and generate insights. The implications for small businesses are transformative.
AI enhances productivity by automating repetitive tasks like data entry and diary management, freeing staff for higher-value work. It improves decision-making by analysing vast datasets to reveal patterns and trends that would otherwise be invisible. This leads to significant cost efficiencies as automation optimises workflows and reduces manual errors, all without large upfront hardware investments.
Ultimately, AI acts as a "force multiplier", allowing a small team to operate with the efficiency of a much larger organisation and levelling the competitive playing field.
What are the most common misconceptions SMEs have about AI?
Despite the benefits, 43% of SMEs have no plans to adopt AI; a hesitation often rooted in common misconceptions:
AI is too expensive
The reality is that many powerful AI tools are available via affordable cloud-based subscriptions or even free versions.
AI is too complicated
Most modern AI tools are designed to be user-friendly, with intuitive interfaces. Many are already embedded in familiar software like Microsoft 365 or Google Workspace.
AI will replace my staff
For SMEs, AI is far more likely to augment human roles than replace them. It handles repetitive tasks, freeing employees to focus on creativity, strategy, and client relationships.
AI is only for large businesses
SMEs often have an advantage in AI adoption due to their agility. With only 25% of UK SMEs currently using AI, early adopters can gain a significant competitive edge.
AI leads to costly errors
While not infallible, AI risks can be managed with human oversight. AI should be used as a powerful assistant, with a human providing the final review and approval for any critical task.
How to get started: what are the simplest, most accessible AI tools SMEs can start using today?
The most effective way to build confidence is through hands-on experience. A wide array of user-friendly and affordable tools can deliver immediate value. Many offer free versions, allowing for risk-free experimentation.
The British Business Bank has compiled a list of high-impact, low-cost tools that are ideal starting points for any SME.
How can SMEs identify which parts of their business would benefit most from AI?
Successful AI adoption is driven by business objectives, not technology. SMEs can identify the best opportunities by using a simple framework. First, pinpoint your pain points by auditing internal processes to find the most repetitive tasks, frequent errors, or workflow bottlenecks.
Second, follow the data. Identify areas of the business that generate significant data, for example customer interactions and sales figures. AI excels at analysing this data to uncover valuable insights that can inform better business decisions.
Finally, align with strategic goals. Every potential AI project must be directly linked to a core business objective, whether it's reducing costs, increasing sales, or improving customer satisfaction. This ensures AI is deployed as a targeted tool to drive the business forward.
Are there specific sectors or business models where AI delivers the strongest ROI?
While AI is transforming entire sectors like finance and manufacturing, the most immediate Return on Investment (ROI) for SMEs often comes from applying AI to common business functions.
High-ROI areas include customer service automation, where chatbots handle routine queries 24/7, freeing up human agents for complex issues.
Another key area is marketing and sales personalisation, where AI analyses customer data to deliver tailored campaigns. Accenture research suggests companies using generative AI for customer initiatives can achieve 25% higher revenue after five years.
Finally, financial and administrative automation tools can manage invoicing and payroll, providing a direct and measurable ROI through reduced admin hours and fewer errors.
How can SMEs assess their readiness for AI adoption?
Successful AI adoption depends on a foundation of strategic alignment, data maturity, and a supportive culture. A key challenge is the "readiness gap" within companies. While 84% of leaders expect human-AI collaboration, only 26% of workers have received training. An assessment must evaluate if leadership is ready to support staff through the transition.
The following checklist can help North East SMEs conduct a self-assessment.
Strategy & Leadership:
Do we have a clear business problem to solve with AI, and is leadership supportive?
Data:
Is our key business data organised, digital, and accessible?
People & Skills:
Does our team have basic digital literacy and a willingness to learn new tools?
Technology:
Can our existing core software systems integrate with external applications?
Culture:
Do we encourage experimentation and accept that a first AI project may not be perfect?
A high number of 'Yes' answers indicates a strong foundation, while fewer 'Yes' answers highlight foundational gaps in data, skills, or strategy that should be addressed first. The North East offers a rich ecosystem of support, including the National Innovation Centre for Data at Newcastle University, to help close these gaps.
To see if your business is ready for AI and smart technology, complete the Smart Tech Profile on the North East Growth Hub.
What are the key risks, ethics and compliance SMEs should be aware of when using AI?
Adopting AI introduces new responsibilities. For SMEs, the key is to foster awareness and implement practical safeguards.
Data protection and GDPR:
AI tools processing personal data must comply with UK GDPR, including principles of purpose limitation and data minimisation. For high-risk projects, a Data Protection Impact Assessment (DPIA) is essential.
Algorithmic bias:
AI models can replicate and amplify biases present in their training data, potentially leading to discriminatory outcomes that breach the Equality Act 2010. Human oversight for significant decisions is crucial.
Security and privacy:
The most immediate threat for many SMEs is "Shadow AI," where employees paste confidential company or customer data into public AI tools. This can constitute a serious data breach. The most critical risk mitigation strategy is a clear policy: No confidential data is to be entered into any public, non-enterprise AI tool.
Inaccuracy and intellectual property:
Generative AI can "hallucinate" incorrect information or produce content that infringes on copyright. All AI-generated content must be treated as a first draft that requires human fact-checking and editing.
What internal skills or roles are needed to manage AI tools effectively?
For SMEs, the most effective strategy is to upskill the existing team rather than hiring expensive specialists. The focus should be on a spectrum of practical skills.
Non-technical skills (for all staff):
These are the most critical. They include prompt engineering (asking AI the right questions), critical evaluation (questioning AI output for accuracy and bias), and ethical awareness (understanding data privacy).
Technical Skills (for 'AI Champions'):
These include workflow integration (connecting different software), low-code automation, and data interpretation from AI dashboards.
Managerial Skills (for Leadership):
These involve AI strategy development, ROI analysis, and AI governance (setting policies for responsible use).
Rather than a formal 'Head of AI', SMEs should empower internal 'AI Champions' - enthusiastic employees who explore new tools and share their findings with colleagues. This peer-to-peer approach is highly effective. Ultimately, the most valuable skill is adaptive judgment - knowing when to use AI, when to question it, and when to rely on human expertise.
How can SMEs build confidence and buy-in among staff for AI adoption?
Successful AI adoption depends on people. Building staff confidence requires proactive and empathetic leadership.
First, leaders must openly acknowledge staff concerns about job security and communicate a clear vision of AI as a tool for augmentation, not replacement.
Involving staff in the selection and testing of new tools fosters a sense of ownership. Empowering internal 'AI Champions' to lead by example also creates a persuasive peer-to-peer learning dynamic.
To support business owners in the North East to introduce and implement AI within their organisations, Accenture has launched a series of free courses:
Skills to Succeed Academy:
Registration | Skills to Succeed Academy
Learner access code. AIGZ01
Accenture Digital Skills:
Digital Skills: Artificial Intelligence - Online AI Course - FutureLearn
Digital Skills for Work and Life - Online Course - FutureLearn
Digital Skills: Reimagine Your Career - Online Course - FutureLearn
Digital Skills: Digital Marketing - Online Course - FutureLearn
Using Social Media for Business - Online Course - FutureLearn
Digital Skills: Mobile - Online Course - FutureLearn
Digital Skills: User Experience - Online Course - FutureLearn
Digital Skills: Web Analytics - Online Course - FutureLearn
Conclusion: your AI journey starts now in the North East
Artificial intelligence is an accessible, affordable, and powerful tool that is actively reshaping our regional economy. For the SMEs that form the backbone of the North East, the path to successful adoption is clear: start small, focus on solving real business problems, prioritise upskilling your team, and proceed with a clear awareness of the risks.
Now is the time for our region's SMEs to act. By embracing this technology, you will not only unlock new levels of productivity for your own business but will also contribute to the shared prosperity and pioneering spirit of the entire North East.
To find details of more AI training courses and programmes taking place in the region, visit the North East Growth Hub. If you’d like to access support and guidance on developing your business operations using AI, book an appointment with one our expert Business Support Advisers.