Despite the use of artificial intelligence (AI) in UK businesses rising in the last three years, according to the latest government figures, AI adoption remains one of the biggest challenges facing businesses in the region – a new survey has found.

According to research from accountancy and advisory firm BDO LLP, almost a fifth of businesses in the North West (18%) rank AI adoption and technological change as one of their top concerns over the next six months, outweighing higher taxes.

As a result, almost a quarter of North West businesses (24%) plan to accelerate investment in AI or automation in response, to help improve productivity.

Earlier this summer, the government published figures showing that ‘self-reported’ use of AI in UK businesses [with 10 or more employees] has increased from around 12% to around 35% since late 2023, with larger firms more likely to have adopted AI.

It follows the appointment of eight Industrial Strategy AI Sector Champions who will be responsible for setting a clear national vision for how AI should be adopted in their sector, while identifying practical steps to remove barriers and unlock investment. Sectors include: clean energy, professional and business services, advanced manufacturing and digital and technology.

However, despite the spike in AI adoption, BDO’s bi-monthly Mid-Market Tracker, a survey of 500 businesses with revenues between £10m and £500m, highlights the pressures still facing regional businesses, with particular concern around skills. According to the survey, over a third of North West businesses (41%) are uncertain over what skills the business will need in future, with over a fifth of regional companies (21%) identifying a specific gap in AI skills amongst entry-level recruits.

As part of the government’s Industrial Strategy, ministers have set out ambitious plans to accelerate AI adoption across a raft of sectors, aimed at boosting productivity, supercharging economic growth, and unlocking billions in added value.

That ambition is shared by many regional businesses looking to develop, integrate and measure the effectiveness of AI, whether that’s across information and communication, improving business operations, or administrative or clerical roles.

However, given the rapid rate of technological change, there are clearly still significant challenges facing businesses when it comes to transitioning from legacy systems, scaling technology, and sustaining new AI models, often hindered by workforce capability gaps. While the role of AI champions is a positive move, more support will be required to ensure North West businesses benefit from the positive effects of AI on businesses.