New report from ICIC provides insights into the AI mindset of small businesses owners

If you are an entrepreneurship service organization (ESO), you likely are seeing more companies within your scope adopting artificial intelligence (AI). But how well do you understand their needs for further assistance with the transformative platform technology? A recent report from the Initiative for a Competitive Inner City (ICIC), “How small business owners are learning, using, and navigating challenges with AI tools,” sheds light on what your companies may be experiencing and offers some recommendations. The findings are based on 3,752 business owners nationwide who responded to an ICIC survey, as well as five focus groups.

Eighty-nine percent of business owners who responded to the survey reported that someone in their organization currently utilizes AI. However, who, exactly, is using AI within a company at a specific organizational level varies from industry to industry. The industry where most business owners reported using AI themselves was real estate and rental and leasing, at 63.7%. These same owners in the industry reported that mid- and lower-level management in their companies were using AI at 37.3%, a significantly lower percentage than owners’ usage. In the professional, scientific, and technical services industry, 39.7% of business owners reported using AI themselves, and 36.7% of their mid- and lower-level management were using it. Owners of businesses in the information industry reported the lowest usage of AI for themselves, at 17.8%, but reported that 49.9% of their mid- and lower-level management were using the technology.

The rate of AI usage for entry-level workers and interns varies differently than the usage of higher-level workers in these industries. The information industry business owners reported the highest rate of usage by entry-level workers at 33.7%. The professional, scientific, and technical services companies weren’t far behind, at 31.3%. Real estate and rental and leasing small business owners reported that 28.9% of their entry-level workers use AI. The number of interns using AI, according to business owner responses, was 21.1% at professional, scientific, and technical services companies, 12.9% at real estate and rental and leasing companies, and 10.9% at information companies.

Those findings suggest ESOs may find it useful to tailor outreach and technical assistance by occupational level for the various sectors. For instance, differentiating support offerings between how business owners and leadership uses of AI versus their mangers and rank-and-file workers.

The survey also investigated the uses and functions supported by AI among the survey participants. Small business owners most commonly used AI for data analysis, at 26.8% of respondents. The second most-cited use was for creating marketing materials (25%), and the third was for drafting emails and other communication (23.4%).

These percentages may change as companies mature in their use of the technology and AI improves. The researchers found that small business owners anticipated the greatest increase in usage to be used for 

• market exploration (27%, a nearly seven percentage point increase over current use),
• accounting and finance (23%, also just under seven percentage point increase over current use),
• strategic planning (26%, a roughly six percentage point increase over current use), and
• product design (25%, a nearly six percentage point increase over current use).

Understanding and adopting AI is not without barriers, the ICIC researchers found. One obstacle might be one’s comfort level with the technology. Less than half of business owners from all industries expressed a high level of confidence in AI. Small business owners from the professional, scientific, and technical services industry expressed the highest level of comfort, at 45.4%. The industry with the lowest percentage of confidence among the small business owners was the healthcare and social assistance industry, at 18.0%. The report also tallies the levels of confidence by age, gender, race, and business size.

The top reason for not using AI in their business was that they didn’t know enough about new digital tools, as indicated by 71.9% of the survey responders. Additional barriers for adoption include: not seeing AI tools were not useful for their businesses (33.6%), and concern with know how to keep sensitive data safe when using AI (30.4%).

The top two reasons cited for not improving their understanding of AI were that the technology was changing too quickly (30.9%) and the high cost of AI tools (30.4%). 

Lack of time was also a frequently cited barrier to learning about AI (27%). The percentage of small business owners who said time was an issue increased as the size of the business decreased. Twenty-nine point six percent of business owners with 21-50 employees cited lack of time as a barrier, 38.4% of businesses with 1-5 employees cited this issue, and 41.3% of businesses run by solopreneurs also cited lack of time to learn the technology. The authors noted that “(t)hese findings suggest that smaller businesses with lower bandwidth, or those whose workers need to “wear more hats,” are having more difficulty contending with the administrative burden of staying up to date on AI.”

When they do take time out to learn about AI, the largest percentage of business owners reported that they have relied on podcasts, videos, online forums, and social media (33 percent each). Other top learning vehicles included 

• online courses and trainings (30 percent),
• learning by doing (29%), and
• webinars (27 percent). 

ESOs should note that small business owners also said the top resources that would help them understand AI were online tutorials (35.0%), online courses and trainings (35.5%), and in-person courses or trainings (33.4%). The report provides further insights into what survey respondents said would help them better understand AI, broken down by age and gender.

According to the survey results, most (42%) want to learn about how AI can help their business grow and become more profitable. The second most cited topic was data privacy and security (36.6%), followed closely by learning how to achieve the best results by using effective keywords and writing compelling prompts. The researchers dive into the topic of what the business owners want to learn and reveal different results based on business size. They found that owners of the smallest businesses are most interested in learning to use AI effectively and in learning how AI could help them improve their businesses’ operations. Learning how AI can help with growth and profitability (47%) and learning how to achieve the best results from AI (42%) are among the top interests for business owners with between one and five employees.

The report concludes with a discussion of the authors’ three recommendations: 

1. Educational programs should be flexible and reflect the diversity in needs and preferred training styles of small business owners.
2. Small business owners should be aware of the advantages of including employees in decision-making around new technology for effective AI adoption.
3. Transparency about the benefits and risks of AI use will help small business owners understand how to use AI responsibly.