Is Artificial Intelligence and Virtual Reality a Reality for UK Businesses?

The rise and escalating interest in artificial intelligence (AI) and virtual reality (VR) have growing societal implications, shaping the roles and responsibilities of decision-makers and policy analysts. While there exists a substantial body of literature on AI and VR techniques, the same cannot be said for the adoption of AI and VR by small and medium enterprises (SMEs). In this article, we use a large longitudinal survey of UK SMEs to question whether AI and VR adoption is as widespread as many perceive. Second, we question what types of firms are early adopters and which are laggards. Our findings show that only 3.97% of SMEs have adopted AI and 2.09% VR, which suggests that the reality does not yet match up to the hype. We also find that larger SMEs are stronger AI and VR adopters. Innovation and exporting are strongly correlated with AI and VR adoption. We conclude that despite the hype and speculation, AI and VR are not yet pervasive features in the UK SME sector, and particularly amongst small firms.