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Mark Hickman is the managing director for Sage in North America, a leader in accounting, financial, HR and payroll technology for small and medium-sized businesses.

It’s been just over a year since generative artificial intelligence and its various applications joined the cultural zeitgeist. As the technology matures, AI is quickly becoming synonymous with innovation and competitiveness. Unfortunately for many small businesses in Canada and around the world, it’s easy to fall behind in AI adoption, creating a digital disparity among businesses.

According to a recent report from Toronto Metropolitan University, only 3.7 per cent of Canadian businesses have deployed AI in their business in any capacity. The report also found that the adoption of AI has been uneven across businesses in Canada.

Larger businesses with more than 100 employees have been faster to adopt and integrate AI into their business, with one in five large businesses actively using AI. Conversely, only 3 per cent of the smallest firms are using AI.

At this stage of the AI revolution, the adoption lag can be partly attributed to smaller budgets and fewer resources or lack of in-house expertise to be able to test, integrate and use the technology effectively. According to Sage’s Small Business, Big Opportunity report, less than a quarter (24 per cent) of Canadian small- and mid-sized businesses (SMBs) are planning to increase their investment in AI in the next 12 months.

On the flip side, there are still a lot of questions about how AI and automation can be leveraged across different industry sectors and its longer-term impact. As a result, many small businesses are often unsure about how the technology can be used or have serious doubts about the ethical and responsible use of AI.

As AI advances and more applications become available, the technology will become less cost-prohibitive for smaller businesses. However, it is equally as important that technology partners help dispel myths and educate SMBs about how the technology can help save time and resources in a safe and secure way. Building trust in AI and removing barriers to adoption are critical to accelerating the use of AI and closing the digital gap between small and large businesses.

Trust and responsible AI strategies go hand-in-hand

To bridge the gap in AI adoption, it is imperative to address the underlying issues that may be contributing to this reluctance. One key factor is trust.

According to a recent survey from cybersecurity vendor Palo Alto Networks, more than two-thirds of Canadian business decision-makers (69 per cent) believe the emergence of more AI technologies has increased the threat level to their organizations.

SMBs must feel confident in the reliability, security and ethical use of AI technologies to fully embrace them. This is especially true given the growing concerns around data privacy and security. To build trust in AI, it is important that SMBs understand how AI can be used to enhance the effectiveness of employees in their daily tasks, while dispelling the myth that it may replace them outright. Always remember that AI is about tasks, not roles.

For example, accounting, finance and people management processes can often be repetitive and take up a considerable amount of time in a person’s day. Many of the latest financial tools today incorporate AI-powered productivity assistants, like Sage Copilot, to help streamline and automate processes such as forecasting, cashflow management and generating and sending invoices. This can save businesses a significant amount of time and resources, while freeing up employees to focus on more strategic tasks like expanding the business.

Businesses should also consider adopting responsible and ethical AI strategies that prioritize transparency, fairness and accountability in their AI initiatives. According to a recent report from Amazon Web Services, a quarter of business leaders have started building a strategy or framework for implementing responsible AI strategies, while 47 per cent plan to increase investment in responsible AI in 2024. Conversely, 35 per cent note that if they don’t develop, design or use AI responsibly, it could cost their company at least $1-million (likely more) or potentially jeopardize the business itself.

Responsible AI strategies help outline how a technology is leveraged, how data is secured and used and that algorithms are monitored to ensure the insights derived are unbiased, explainable and aligned with ethical standards. Having clear guardrails and demonstrating a commitment to responsible AI practices allows businesses to instill confidence among internal and external stakeholders and mitigate concerns about any potential risks of AI.

Building awareness to break down barriers

Dispelling the myths surrounding AI is the first step to accelerating its adoption. Educating SMBs on how AI can benefit their organization means focusing on the business challenges where operations can be streamlined, and AI and automated solutions can have the most immediate impact on efficiency and productivity.

It is important that businesses understand that they do not need to deploy state-of-the-art AI platforms or implement a bespoke AI solution at the start of their AI journey. They can begin by taking small steps, as many business applications today already have AI capabilities built in to automate repetitive tasks and increase efficiencies. Understanding how these AI-powered capabilities ­– such as error detection, auto-fill or automated invoicing – can help their business, is an effective way to get familiarized with the overall benefits of AI technology.

It is also important for businesses to understand the role that data plays in the digital-first economy. Data has become the lifeblood that drives today’s fast-paced businesses. It is fundamental for driving business growth, increasing real-time decision-making, improving the customer experience and increasing businesses’ agility to respond to sudden shifts in the market.

It is crucial for businesses to know that not all data is created equal. Understanding which tasks can be automated and which data can be leveraged will lay a solid foundation as you build an effective AI strategy for your organization.

Closing the gap

To address the digital divide and accelerate AI adoption among Canadian SMBs, collaboration is key. Policymakers and industry leaders need to work together to help advance the responsible use of AI through regulation, training and education for businesses, as well as by providing more resources.

There are programs available like the Canadian federal government’s Grow Your Business Online Grant program, which provides a microgrant of $2,400 to small businesses to help accelerate the digitization of their business. Ontario’s Digital Mainstreet Digital Transformation Grant Program provides qualified brick-and-mortar small businesses with a digital assessment, online training and a $2,500 grant to implement their digital transformation plan. However, as AI and automation become critical differentiators for success, federal and provincial governments should not be complacent and must do more to help businesses modernize and successfully compete in the digital-first economy.

This column is part of Globe Careers’ Leadership Lab series, where executives and experts share their views and advice about the world of work. Find all Leadership Lab stories at and guidelines for how to contribute to the column here.

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