Small Firms Association Sound Alarm Over ‘Shallow’ AI Adoption
- SFA Survey reveals 92% of small businesses use generic AI tools but only 30% are customising tech.
- More firms are developing customised tech and building standalone software compared to last year.
- Lack of technical expertise and severe time constraints are top barriers to adopting AI.
- SFA urges Government to use trusted, existing funding channels under National Training Fund to assist small firms with AI training and digital transition.
New research from the Small Firms Association (SFA) shows that a significant gap remains between basic AI usage and true strategic adoption among small businesses. The survey, conducted by Amárach over the summer, did show an increase in small businesses adopting more customised tech and building standalone software in the past year. This is the second year that the SFA has conducted this survey on AI usage within the small business community.
92% of small firms acknowledge that they use generic off-the-shelf generic tools such as ChatGPT and Microsoft Copilot. In contrast, just 30% of companies surveyed using customized AI models tailored specifically to their distinct business needs, but that is up from 22% in 2025. In 2026, 20% of small businesses surveyed are building or coding standalone in-house software, up from 10% last year.
For the companies that do actively use customised or strategic AI, 65% report an immediate boost in business efficiency, and 45% credit it with improving the speed of service delivery to customers.
The 2026 data shows that technology usage across core business operations remains widespread with 61% of businesses surveyed using AI for automating simple tasks (up from 56% last year) and 52% relying on AI for digital dashboards and analytics. The most popular usage for AI is holding digital business files, with 65% of businesses doing so, up from 40% in 2025.
Despite the increase in developing customised AI technology and standalone software, the research shows that barriers remain to adopting AI remain. 31% of companies blamed a lack of technical expertise and 28% blame a lack of time investigate the technology while 17% say it is a lack of finance that is the problem. All those percentages are up from the previous year. This year 31% of small businesses surveyed that they have not started or investigated adopting AI for the business, up from 17% the previous year.
Commenting on the AI survey SFA Director, David Broderick said:
"Small businesses are continuing to embrace off-the-shelf generic tools, mostly to use for basic administration and file storage. A significant majority of small businesses, however, have not yet embraced the development customised tech and building stand-alone software. Although more businesses are doing that more so compared to last year. Those businesses that have adopted more advanced AI systems have seen benefits in terms of efficiencies and cost.”
"Small businesses are feeling the squeeze of spiralling operational costs. AI has the unmatched potential to dramatically boost productivity and lower overheads, but owners simply do not have the hours in the day, technical staff or finances to figure out how to deploy it strategically. If our small business community is going to survive alongside large corporate competitors, they cannot do it alone.
A once again is calling on the Government to utilise existing trusted, funding channels from the National Training Fund to address technical skill deficits among small businesses. AI can make huge gains for a small business’s productivity, but small business owners need assistance in identifying where those gains can be made for their specific needs. This operates very well when businesses get assistance through the SFA’s MentorsWork programme where experience mentors engage with owners on the specific company needs. Any unlocking of the National Training Fund should prioritise these types of existing funding channels that are established, effective as well as trusted. Speed of delivery and early impact is essential here. This needs to be done quickly so that our small firms do not fall behind. To protect Ireland's broader competitiveness, we must transform our small firms from passive tech-users into active tech-innovators."
Key Findings from the 2026 SFA AI Survey:
- Where AI is Winning: AI adoption is heavily concentrated in low-risk operational areas. Sales and marketing content generation leads the charge at 63%, equalled by administration workflows at 63% and data analytics at 43%.
- The Sentiment Split: Sector sentiment remains generally positive, particularly within Financial and Professional Services where enthusiasm peaks. However, 31% of total respondents remain completely neutral or indifferent toward workplace AI implementation.
- The Sectors Lagging Behind: Retail and Hospitality continue to show the highest rates of tech hesitation, with 38% of retailers and 41% of hospitality operators reporting they have still not investigated using AI whatsoever. The Finance / Professional Services sector show the most enthusiasm for AI at 88%.
- How AI supports businesses: Of those using AI, 63% use it for Sales / Marketing while 63% also use it for basic administration (emails and internal workflows).
-ENDS-
Notes to Editor:
- About the Survey: The Small Firms Association (SFA) AI Survey was conducted among a representative sample of N=404 small business respondents across Ireland in 2026, following the baseline survey of N=357 in 2025.
- About the SFA: The SFA proudly represents homegrown businesses employing up to 50 employees across every sector of the Irish economy.
- Please find here: Details of the AI survey which was part of the annual Small Business survey.
- Details of the SFA’s MentorsWork programme can be found here.
Media Contact: Jonathan McDade at Jonathan.McDade@sfa.ie or 0876253551
