Small businesses are adopting technology and artificial intelligence to compete, according to a study released by the U.S. Chamber of Commerce.

While 23% of small business owners said inflation is their biggest challenge, the second biggest challenge is technology needs.

The study found that nearly 60% of small businesses are using AI in their business operations, which is double the amount from 2023.

Technology is being credited by 8 in 10 business owners with helping them cope with inflation, supply chain disruptions and improving their access to capital. And 77% are concerned that limits on technology would negatively impact their growth, operations, ability to reach customers and bottom line.

Many are concerned that AI could create job loss, but according to the study, 82% of small businesses using AI reported increasing their workforce over the past year. 

About 44% of small businesses are using the Gen AI chatbot, 20% AI are using coding tools and 16% are using image creation tools.

According to the study, here are the top users of AI across various industries:

  • Technology, 77%.
  • Financial services, 74%.
  • Entertainment and media, 65%.
  • Education, 64%.
  • Health, medical and pharmaceutical, 61%.
  • Agriculture, 58%.
  • Real estate, 58%.
  • Hospitality, 58%.
  • Tourism, 58%.
  • Construction, 47%.
  • Manufacturing, 46%.

The study found that 77% of businesses using only one or no technology platforms reported growth, compared with 86% of businesses using two or three. Of those high-tech adopters using four or five platforms, 84% reported growth, and 82% of businesses using six or more reported growth.

Overall, 99% of small businesses surveyed reported using at least one technology platform, and 58% reported using four or more. Only about a third are using six or more. Those using six or more were the only group showing less profit, pointing to a possible balance between spending on technology and reward.

Use of AI tools is right behind search engines as the top technology on the list. About 25% are using virtual assistants and cybersecurity tools, according to the study. Roughly a third of small businesses reported using technology for marketing, managing payroll and managing customer relationships. That is followed by accounting (29%), managing inventory (28%), communicating with customers/prospects (28%) and processing sales (28%).

According to the study, 4 in 5 small businesses said technology helps them prevent passing on cost increases to consumers and overcome difficulties with their supply chain. Tech also helps more than 4 in 5 small businesses stay better connected with their customers and other businesses.

About 83% said technology platforms are helping their business compete with larger companies. Only 8% are mostly or entirely creating their own AI platforms, while two-thirds rely mostly or entirely on using AI tools developed by others.

Concerns that their competition is already using AI is pushing others to adopt it as well. The study found that 80% of small businesses have sped up their use or plans to use AI based on what the competition is doing.

However, only 40% are offering training to upskill their employees, while 39% are providing the tools and hoping employees will learn to use them on their own.

In Ohio and Pennsylvania

In Ohio, 95% of small businesses said they are currently using at least one technology platform, and 75% plan to increase their use in the next two to three years. Of those using technology, 59% are using an AI platform, but only 68% believe AI will help their business, which is behind the national average of 80%.

In Pennsylvania, 97% are currently using at least one tech platform, and 81% plan to increase their use in the next two to three years. Fifty percent currently use an AI platform, which is behind the 58% national average, and only 72% believe AI will help their business in the future.

The complete report can be found HERE.