Mayor unveils £12m AI support package to help London’s small businesses boost productivity and growth

Mayor unveils £12m AI support package to help London’s small businesses boost productivity and growth

• New £12m programme announced at London Tech Week to accelerate AI adoption among the capital’s small businesses and unlock growth across the capital
• Fewer than one in six SMEs currently use AI tools despite growing competitive pressure
• Developed by the Mayor’s growth agency London & Partners and in consultation with the Mayor’s AI and Jobs Taskforce, the initiative will provide practical support to help businesses adopt AI, improve productivity and scale faster
• Programme forms part of the Mayor’s wider plan to make London the best city in the world to start and grow a business

The Mayor of London, Sadiq Khan, today announced a major new £12 million investment to help small and medium-sized businesses harness the power of artificial intelligence and boost economic growth across the capital.

 Unveiled at London Tech Week, the UK's flagship technology festival, the programme will invest £4 million annually over the next three years to support businesses in adopting AI and benefiting from the opportunities of the digital economy.

 The investment reflects London's ambitious but balanced approach to AI: embracing its enormous potential while recognising the challenges and concerns it presents. As one of the world's leading AI hubs and home to Europe's largest concentration of AI startups, London is determined to ensure the benefits of this tech revolution are shared widely. The programme will help businesses innovate and grow, while supporting Londoners to develop the skills and confidence needed to thrive in a rapidly changing economy.

 Building on the Mayor's existing work to prepare London for the opportunities and challenges of AI, including the establishment of a dedicated AI and Jobs Taskforce, AI training for Londoners and the Mayors AI Forum, the funding will help ensure neither businesses nor workers are left behind. By encouraging the responsible adoption of AI, London has the potential to improve public services, unlock innovation across sectors such as healthcare and transport, and strengthen the capital's position as a global leader in technology,

In April the Mayor was invited to be a founding member of the The Mayors International AI Forum, established by Bloomberg Philanthropies with Johns Hopkins University. The Forum will help global cities to navigate the transition, respond to economic disruption and unlock the full potential of AI as a force for good so that all our citizens can share in the benefits.

Speaking at London Tech Week, the Mayor highlighted London’s “power, passion and purpose” alongside its growing global leadership in AI and advanced technology, adding that he wanted the Capital to be the best possible partner for start-ups, scale ups and established companies who believe that tech can be a force for good

While nearly two-thirds of SMEs believe AI will be critical to their competitiveness over the next five years, only 16 per cent currently use AI technologies in their operations (AI Adoption Research, Gov.uk). Many businesses report barriers including lack of expertise, uncertainty around implementation and concerns about cost.

 The new programme, developed by London’s growth agency London & Partners in consultation with the Mayor’s new AI and Jobs Taskforce, will provide practical support to help SMEs identify how AI can improve operations, support staff and unlock growth opportunities.

London and Partners are in active conversations with the Mayor’s new AI and Jobs Taskforce, chaired by Baroness Martha Lane-Fox, to ensure that up to date insight and expertise from the Taskforce is used to inform the design of this programme.

The programme will:

• Provide SMEs with practical support including AI readiness assessments, expert mentoring, workshops and tailored adoption guidance
• Help businesses improve productivity and operational efficiency through AI adoption
• Support SMEs to build workforce capability and confidence in using AI technologies
• Contribute to wider economic growth by helping more businesses scale and compete

 SMEs adopting AI report average productivity gains of more than 35 per cent  (AI Opportunities, Small Business Britain) within the first year, while SMEs overall account for more than half of London’s workforce (Business Population Estimates 2025, Gov.uk)

 The Mayor of London, Sadiq Khan, said: “London has always led the way when it comes to innovation and enterprise, and AI presents one of the biggest economic opportunities of our generation.

 “We want every business to benefit from the opportunities AI can unlock. This investment will help thousands of SMEs adopt new technologies, boost productivity, create better jobs and drive growth across the capital. 

“By backing businesses to innovate and equipping Londoners with the skills they need for the future, we can help build a fairer, more prosperous city for everyone.”

 Businesses already embracing AI are reporting significant gains, including faster customer response times, reduced administration costs and productivity improvements of more than 35 per cent within the first year of adoption.

 The programme forms part of the Mayor’s wider ambition to ensure London remains the leading destination in Europe for innovation, investment and high-growth businesses.

 Laura Citron OBE, CEO of London & Partners, said: “London's one million small business make our city the brilliant place it is. AI has the potential to help entrepreneurs to spend more time growing their businesses and the economy. But we know that many entrepreneurs feel they don't have information they can trust, a peer group to talk to or the confidence to get going with AI. That's why we're launching a new programme to make sure that the benefits of AI can be felt across London's business communities, not just in big businesses with big IT budgets." 

 Anthony Impey MBE, CEO of Be the Business, said: “We’ve spent the last month speaking to small business leaders across London about how they are approaching AI. What’s clear is that the opportunity is enormous – but for many business owners, finding the time, capacity and practical support to turn that opportunity into action remains a real challenge. This new programme will help bridge that gap. By providing businesses with the expertise, tools and support they need to adopt AI successfully, it will help more firms move beyond experimentation and embed AI into the way they operate – driving productivity, growth and competitiveness across London’s economy.”

 Lucy Jung, Founder and CEO, LYEONS "AI is transforming the way we work, think, and innovate. Used ethically and responsibly, it can help small businesses accelerate growth and execute ideas more efficiently.

What matters most is how we use the time it gives back to us - investing more in creativity, team collaboration, nurturing talent, and meaningful human connection. Change can feel challenging, but when approached thoughtfully, AI can strengthen rather than replace the human side of business."

Tacita Small, Founder & MD - The Small HR Company, “We've been on our own AI journey at The Small HR Company, and like many London SMEs, we're still finding our feet. The benefits are tangible - our team is more productive, our workflows more streamlined, and we're better placed to grow. But we've been intentional: AI should amplify what our people do, not replace them. The loudest narrative out there is that AI is taking jobs and leaving workers behind - and we refuse to play into that. What we see is employees who want training, who want to understand these tools, and who thrive when they're empowered to use AI transparently and with confidence. As an HR business handling sensitive data, our biggest barrier has been knowing who to trust ; the market feels like a gold rush right now, and small businesses need access to credible, reliable guidance on safety and responsible adoption, not just another tool to try.”

 Claire Woods, Founder, Kennedy Woods, "AI has the potential to be a game changer SMEs, however I think there's still a lot of misinformation going around which is supporting the fear factor i.e. AI is taking over the world!  Many business owners know they should be paying attention to AI, but they're not always sure how to integrate it within their business processes. The biggest opportunity in my opinion right now is education - we need to help people to have a clear understanding on how to use these tools effectively.

What worries me most is seeing businesses adopt AI simply because everyone else is doing it. AI isn't the strategy; it's merely the tool. The real value with AI comes from having a clear plan for how it can help improve productivity, streamline processes and create more time to focus on growing the business."

The Mayor is committed to helping small businesses and since he launched Grow London Local over 40,000 entrepreneurs across London high streets and industrial estates have been helped to access the support they need.