Findings from a survey conducted by Umpqua Bank indicate that companies are continuing to adopt artificial intelligence (AI) into their business practices. Key results from the bank’s annual 2024 Business Barometer Survey of small and midsize companies show across-the-board advances in generative AI adoption, especially among midsize firms.

According to this year's survey, midsize companies are rapidly embracing generative AI, while small business adoption is also on the rise, albeit at a more modest pace. Particularly noteworthy, midsize businesses are prioritizing hiring AI-proficient personnel, with 86% likely to recruit for the skillset in the next 12 months.

"Businesses of all sizes are diligently examining their technology options in search of new and enduring efficiencies to drive improved profitability," said Richard Cabrera, head of Commercial Banking at Umpqua Bank. "AI may still be in the early innings of a long game, but its capabilities are progressing expeditiously, creating potentially enormous opportunities that more and more companies are eager to understand and harness."

Survey highlights focused on generative AI implementation and use among midsize companies include:

• More than half (56%) are making AI investments their top priority, ranking it first among 10 other investment options.
• Nearly 8 in 10 are moving forward quickly to implement generative AI broadly or for at least a few specific functions.
• A strong majority believe the technology is already having, or will have in the next 12 months, a significant impact on productivity (72%), their competitive advantage (71%), profitability (70%) and acceleration of new products (69%).
• 51% see AI specifically benefiting their IT, cybersecurity, marketing, and customer services initiatives.

Small businesses are also sharpening their collective focus on the merits of generative AI:

• 45% are planning ways to implement capabilities, researching AI tools or conducting small pilot projects.
• 29% are likely to hire individuals with the expertise to strengthen internal capabilities.
• 31% believe the technology will benefit their marketing and customer service efforts the most.

While these findings trail those of midsize entities, the slower pace tracks with broader trends. Small businesses must manage fewer resources and tighter margins as they pursue implementation of new technology.

"The fact that nearly a third of small businesses are taking notice of generative AI and weaving it into their strategic plans speaks to its potential impact on their bottom line," said Amy Davis, director of Retail Business Banking at Umpqua Bank. "AI holds the potential to level the technology playing field for companies across the size spectrum, giving some small businesses as much reason as any of their larger competitors to embrace it as part of their strategy."

On behalf of Umpqua Bank, DHM Research conducted an online survey of 1,200 owners, executives, and financial decision-makers at U.S. small and middle market businesses during April 22 to May 2, 2024. Of middle-market respondents, 22% are minority-owned businesses, while 19% of small-business respondents are certified woman-owned and 15% minority-owned. The margin of error is: ±2.8%.