New Study Reveals 80% of Small Business Owners Concerned as AI Development Outpaces Regulation
A recent study conducted by small business platform Xero has shed light on the growing concerns among small business owners regarding the development and adoption of artificial intelligence (AI) outpacing regulation. The survey, which involved over 3,000 small business owners from different countries, found that 80% of respondents expressed worry about the unchecked growth of AI technology.
Among the main ethical challenges associated with AI implementation in small businesses, 41% of participants identified sensitive information disclosure and data privacy violations as their primary concern. This was followed closely by worries about worker displacement, cited by 38% of respondents.
These findings were unveiled during Xerocon Sydney, a major event for cloud accounting leaders in the Asia Pacific region. The event provided insights into Xero’s approach to AI product development, showcasing new AI-powered predictive features, including generative AI pilots and an AI guide tailored specifically for accountants and bookkeepers.
Mark Rees, Chief Technology Officer at Xero, emphasized the importance of equipping small businesses with the necessary knowledge and tools to leverage AI technologies effectively without being left behind.
While many small businesses are actively exploring AI solutions to stay ahead, the study revealed that 32% of them are not taking any proactive steps. To mitigate the risks associated with generative AI tools, businesses are implementing various measures such as developing policies (26%), providing employee training (25%), and seeking client/customer consent (23%).
Despite these efforts, the survey highlighted the fact that some small businesses are entrusting AI tools with sensitive data, indicating the need for greater support in assessing security and privacy risks. More than half (51%) of the respondents expressed trust in AI when it comes to handling identifiable customer information, while 45% trust it with sensitive commercial data.
The survey also shed light on some of the challenges faced by businesses using generative AI tools. These challenges include increased biases or inaccuracies (18%), decreased employee morale (18%), and efficiency loss due to quality control (16%). Additionally, 14% of businesses reported a reduction in headcounts as a result of implementing generative AI.
Despite having a mix of feelings about the impact of AI, with 32% feeling intrigued, 31% feeling anxious, and 30% feeling excited, small businesses tend to lean towards optimism. Half of the respondents believe that AI will be more helpful and have a positive impact on their operations, while 20% express concerns about potential harm.
Looking ahead, three-quarters of small businesses expect AI to influence their operations in the next five years, with 34% anticipating a significant impact. However, 24% remain uncertain about the effects of AI. While 59% believe that AI won’t affect their hiring plans, 31% foresee hiring fewer employees due to the implementation of AI.
Xero’s research also highlighted that AI is not currently a top priority for the majority of small businesses. Concerns about growing revenue, attracting customers, and managing costs still dominate their priorities. Only 8% of respondents ranked adopting or investing in AI as their top priority in the next 12 months.
Addressing the need for education and support, 43% of respondents emphasized the importance of training on different types of AI and their impact. To address these needs, Xero introduced the Future Focus: AI Guide for Accountants and Bookkeepers, aimed at assisting professionals in navigating the impact of AI on their practices and clients.
Mark Rees emphasized that the guide is intended to provide accountants and bookkeepers with well-informed choices when it comes to employing AI tools, allowing them to manage risks and reap the benefits effectively.
In conclusion, the study conducted by Xero showcases the concerns among small business owners regarding the rapid development and adoption of AI technology. While many small businesses are embracing AI solutions, there is a need for greater regulation and support to mitigate potential risks. The survey also highlights the various challenges and opportunities associated with AI, presenting a balanced view of its impact on small businesses in the coming years.
