Small businesses are arguably the backbone of Britain’s economy. According to recent UK government statistics, they account for approximately 99.8% of all UK businesses, employ 16.6 million people and generate £2.8 trillion in turnover (more than half of the UK total).
Now, we are set to see a new wave of entrepreneurship across Britain, thanks to AI tools that enable more people to start businesses. That means more jobs, investment and expansion, which is good news for a government looking to AI to deliver growth “in every postcode”.
These signs come from recent Shopify data which uncovered how the barriers to starting a business are falling. More than two-thirds (69%) of UK founders believe starting a business is more accessible than ever and almost three-quarters (74%) say technology and AI have made it easier.
But making it easier to become a founder is not entirely the same as building a successful business. Lack of money remains a major barrier to getting started, while standing out, generating consistent demand, and managing cash flow are all still holding businesses back once they launch.
As Andy Burnham’s new AI Taskforce looks to harness renewed potential across the country, there is both opportunity and challenge. AI can help Britain create a new generation of founders, but turning their ideas into sustainable businesses will require tackling the barriers technology alone cannot solve.
AI is lowering the cost and complexity of starting a business
According to the Shopify data, 30% of UK founders say AI has made it possible to do things they otherwise wouldn’t have been able to do, from content creation to customer communication and analysis.
A quarter say it has reduced the time or effort needed to run their business, and improved their ability to make decisions or solve problems in real time. A similar proportion say it has made it easier to move from an idea to actually selling something.
These efficiencies can make a difference from the very beginning, offering founders new ways to tackle tasks faster and cheaper. They enable founders to test ideas and start selling without having every capability in-house from day one.
Our data found 38% of founders would have started more quickly or efficiently with access to today’s digital tools. That offers reason to be optimistic that today’s technology can widen the pool of people able to pursue entrepreneurship. But easier access is only the first step.
Significant barriers to entrepreneurship still remain
Technology can lower the barrier to entry, but it cannot remove many of the practical barriers involved in building a viable business.
Money is the clearest example. Almost half of UK founders (46%) say not having enough money or capital was something they had to navigate when getting started, and 30% identify it as their single biggest barrier.
Prospective founders see the same challenge. Among UK non-founders and decision-makers, 43% say more financial resources or stability would make them more likely to start a business, while 34% point to lower financial risk.
AI can help founders operate more effectively around these problems, but it cannot solve the fundamentals. It cannot create demand for something customers do not want, or remove the need for capital to support the organisation’s growth.
Such challenges also continue after launch. Standing out in a crowded market remains an ongoing priority for 45% of founders, while 34% point to building consistent demand. It helps explain why 41% say starting is easier than it used to be, but running a business successfully over time remains challenging.
Founders need the conditions to turn a start-up into a sustainable business
If Britain wants to capitalise on a new generation of AI-enabled entrepreneurs, we need to think about the whole founder journey.
At the outset, access to resources is vital. Even with today’s digital tools, platforms and AI, 23% of UK founders say they would still have needed more resources when starting, including 15% who would have needed more money first. And that need does not disappear after launch. Founders need access to appropriate finance as their businesses develop, including flexible options that can help them manage cash flow and invest when opportunities emerge.
Once up and running, the challenge shifts to building sustained demand. Among those entrepreneurs who found digital tools helpful, 35% say platforms that made it easier to reach customers played the biggest role in enabling them to start when they did. But while technology can help to put a product in front of someone, it cannot guarantee they will buy it, or become a repeat purchaser. Founders still need to understand their customers, test propositions and turn early traction into repeat demand.
Founders also need access to the right guidance at the right time. Nearly three in ten whose biggest barrier was as difficult or harder than expected say a lack of support or guidance contributed to that difficulty. This is particularly important when so many founders overwhelmingly learn by doing; 73% of UK founders relied on trial & error approaches. Useful advice and expertise therefore need to be accessible when challenges arise, from finding customers to managing cash flow.
Government initiatives can help create the conditions for founders to access that support, too. Among prospective UK entrepreneurs, 29% say more government support and less red tape would make them more likely to start a business.
AI can unlock entrepreneurship, but Britain must unlock growth
AI could create a new generation of UK founders and broaden access to entrepreneurship. But more business creation will not automatically mean more growth. That will depend on what happens after those businesses are created: whether founders can secure finance, find customers, build sustained demand and access the support they need to grow.
Enabling that pathway should be the ambition as Britain looks to capture the economic opportunity created by AI. The goal should not simply be more businesses being created, but more successful, lasting businesses contributing jobs, investment and growth to communities across the country.
AI can make it easier to become a founder. Now Britain needs to make it easier for those founders to succeed.
