It is a well-established truth that small and medium-sized enterprises (SMEs) make up the vast majority of businesses and contribution to global GDP.
But while the economic importance of small businesses has been known for decades, a fundamental shift is taking place, one that could radically alter what makes SMEs thrive and how an entrepreneur can achieve success.
Looking to determine how the SME experience is changing and what small businesses can do to succeed next year and beyond, LinkedIn UK has examined all of this and more in its new report: Work Change Special Report How Small Business Can Win in 2026: UK Edition.
AI: The equaliser for small businesses
Adopting new technologies has always been important for competitive businesses, and LinkedIn UK’s data reflects this, with 64% of SMEs describing the practice as key to their growth.
LinkedIn UK has found that small businesses are particularly involved in the adoption of AI, with 89% of British SMEs using the technology in some form.
While much of that includes early-stage experimentation and small-scale efficiency boosts, the potential impact for small teams could be enormous.
As well as AI being deployed to automate tasks such as customer service and data analytics, it is also increasingly being used to support the hiring process.
Based on analysis of the use of its own AI-assisted hiring tool, LinkedIn found qualified candidates are being selected on average five days faster than without it.
These tools can be useful for companies of any size, but small businesses are recognising their impact the most, with the technology allowing them to compete with larger teams at a lower cost.
According to LinkedIn’s data, UK firms with 11-50 employees are growing their AI skills 24% year-over-year, outpacing large companies at just 15% growth.
“We’re witnessing a fundamental shift in how businesses are created and scaled across the UK,” said Janine Chamberlin, head of LinkedIn UK.
“AI has lowered the barriers that once made starting a business prohibitively difficult, and our smallest businesses are now leading the charge. They’re nimble, willing to experiment, and seeing real results.”
Chamberlin noted that SMEs are “not just keeping up, they are ahead. They are nimble, they are willing to try things, and they are seeing it pay off.
“The new normal is not about having the biggest team anymore. It is about having smart people who know how to use AI properly. That is where Britain’s small businesses have a real edge.”
Human connection is more important than ever
Despite the growing impact of automation on how companies operate, the report notes that the significance of the human touch is even greater,
Its poll of SMEs found that 77% agreed that people skills are even more important in the age of AI, while 70% of professionals said building human networks is more vital than ever.
Building a relevant network is seen as essential to making a small business thrive, with 65% of SMEs saying that trusted input from their community helps them make decisions more quickly.
These communities are used as early-warning systems for industry shifts, as research and development departments providing essential technologies and sources of competitive intelligence.
According to the report, these networks must be treated like critical infrastructure for a business and must be nurtured proactively.
“Most UK small business marketers say their buyers check with people they trust before making any decisions,” said Chamberlin.
“They also say networks play a massive role in vetting brands. When everyone’s got access to AI-generated content, what actually cuts through is trust.
“The businesses doing well right now are using AI for speed and scale, but their networks are what give them credibility, proper market intelligence, and the relationships that actually drive growth.”
