Do small firms that use AI see gains?
Most say yes on productivity: 65 to 78 percent of AI-using small firms report that AI raised productivity or employee performance, by their own account and with no size of gain attached. Far fewer report higher sales, about 3 in 10, and almost none report changes in jobs.
- Medium confidence
- 2 primary sources
- 2025 to 2026
- Last checked
Every study on one scale
Chart values as text
- Scale: % reporting higher productivity. Shaded range: 65–78%.
- Federal Reserve (2026): 68–78% productivity
- OECD, seven countries (2025): 65.1% performance
Why medium confidence: Two independent creators with different methods agree on the self-reported share, and two official agencies agree that almost no small firm reports job changes. All the benefit figures are perceptions with no magnitude, and the only causal evidence comes from two trials in special populations that point in different directions.
Sources
| Study | Creator | Year | Sample | Method | Figure | Link |
|---|---|---|---|---|---|---|
| 2026 Report on Employer Firms (2025 Small Business Credit Survey) | Federal Reserve Banks | 2026 | 1,738 to 2,011 AI-using US employer firms, September to November 2025 | Weighted convenience sample; owner-reported direction of change | Productivity up 68% to 78% by size band under 50; sales up 30% to 35%; labor costs unchanged for 75% to 78% “71% said its use led to increased productivity” | fedsmallbusiness.org ↗ |
| Generative AI and the SME Workforce | OECD, survey by Ipsos | 2025 | SMEs using generative AI, from 5,232 surveyed in seven countries, late 2024 | Random telephone survey; yes or no on listed benefits, with no size of gain asked | Improved employee performance 65.1%; saved money 45.2%; increased revenue 25.9% “65.1% of SMEs using generative AI report that it helped increase employee performance” | oecd.org ↗ |
Do small firms cut jobs because of AI?
Almost none, so far. 96% of AI-using US firms under 50 employees report no change in employment from AI, and AI mostly supports tasks (43 to 45% of small users) rather than taking them over (8 to 11%), according to the Census Bureau. In the UK, about 4% of AI-using firms under 50 employees report a smaller headcount.
| Study | Creator | Year | Sample | Method | Figure | Link |
|---|---|---|---|---|---|---|
| BTOS AI Supplement Table 2026 | US Census Bureau | 2026 | More than 117,000 responding US firms, November 2025 to February 2026 | Official survey of AI-using firms' effects over the last six months | No change in total employment 95.6% to 96.3% (firms under 50); AI supplemented tasks 42.8% to 44.8%; AI performed tasks previously done by staff 8.4% to 10.9% “how did the use of Artificial Intelligence (AI) affect this business's total employment?” | census.gov ↗ |
What do controlled trials show about small firms and AI?
Few trials exist, and they disagree. In Kenya, 640 small business owners given a GPT-4 business adviser saw no average change in revenue or profit; strong performers gained and weak ones did nearly 10% worse (see F-12). In a trial with 515 early-stage startups, showing founders where other firms use AI led to 1.9 times higher revenue, though only weakly significant, driven by the top tenth of firms, and in a paper not yet peer reviewed.
| Study | Creator | Year | Sample | Method | Figure | Link |
|---|---|---|---|---|---|---|
| Mapping AI into Production: A Field Experiment on Firm Performance (INSEAD Working Paper 2026/20/STR) | Hyunjin Kim and Dahyeon Kim (INSEAD), Rembrand Koning (Harvard Business School) | 2026 | 515 pre-seed startups in an online accelerator; median team of four | Preregistered randomized experiment; working paper, not peer reviewed | Treated startups found 44% more AI use cases and had 1.9 times higher revenue (p < 0.1) “Treated firms complete 12% more tasks, are 18% more likely to acquire paying customers” | ssrn.com ↗ SSRN shows a browser check first; a copy is also hosted by Wharton's Mack Institute. |
| The Uneven Impact of Generative Artificial Intelligence on Entrepreneurial Performance (Management Science) | Nicholas G. Otis, Rowan Clarke, Solène Delecourt, David Holtz and Rembrand Koning | 2026 | 640 small business owners in Kenya, 2023 | Randomized controlled trial, published July 2026 | No average effect on revenue or profit; low performers did nearly 10% worse “low performers did nearly 10% worse due to the AI assistant” | doi.org ↗ |
Numbers you may have seen
These figures circulate widely. Here is what the original source says.
- AI boosts small business revenue by 15% (Harvard Kenya study). The trial found no average effect. Only high performers may have gained over 15%, while low performers did about 10% worse.
- AI nearly doubles startup revenue. The 1.9 times comes from 515 accelerator startups shown where to use AI, is significant only at p < 0.1, is driven by the top 10% of firms, and is not yet peer reviewed.
- Small businesses are cutting jobs because of AI. 96% of AI-using US firms under 50 employees report no employment change from AI (Census, 2025 to 2026).
More from Small Teams
- F-2896–99%How much of the economy do small companies make up?
- F-2920–46%What share of small businesses use AI, and for what?
- F-3013–38 ptsHow does AI adoption differ by company size?
- F-3154–63%What stops small companies from adopting AI?
- F-3345–52 hHow many hours do small business owners work, and how much goes to admin?
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