New figures published today by the Institute of Directors (IoD) Scotland have revealed a significant rise in the use of AI across Scottish businesses, with well over half already using AI tools within their organisations.

According to the IoD’s latest State of the Nation – Directors Survey, 55% of Scottish firms are now utilising AI tech across a range of functions including administrative tasks, research, marketing, and data analytics, with 84% agreeing that AI will provide more opportunities for their businesses in the future, although 4% still view AI as a threat.

The as-yet-unknown impact of emerging tech like AI is causing some concern among Scottish business leaders, with cybersecurity ranking as the third most pressing business issue over the next five years among those surveyed.  

“With automation streamlining business processes, we may see more components of these roles being handled by AI solutions in the not too distant future,” said Catherine McWilliam, nations director for Scotland at the IoD.

“Whether it prompts businesses to reassess hiring strategies and reskilling initiatives is yet unknown, but it’s certainly a discussion we’re having with members regularly.”

The survey highlights that employment remains a top concern for Scottish business leaders, although confidence in skill levels is improving, with 71% of respondents agreeing they have the right number of skilled employees for current jobs and future staffing requirements – an increase of 10% from 2024 and 17% from 2023.

Despite this improvement, engagement with skills development initiatives is still low, as over half of Scottish businesses (56%) reported not employing apprentices or supporting workplace training schemes, while 46% of businesses are not engaging with any type of further education establishment, rising from 35% last year.

The IoD said that 88% of its members are engaging in Continuing Professional Development (CPD) training, with 78 directors achieving their Certificate in Company Direction this year, a 59% increase from last year.

“The skills gap has been at the top of business leaders’ agendas for several years,” said McWilliam.

“While it is encouraging to see increased confidence in recruitment and retention, we cannot afford to overlook the long-term talent pipeline. 

“Ongoing debate about the apprenticeship levy may deter some firms from engaging, but we are working closely with cross-sector organisations and  education bodies to discuss reform – which we would welcome.”

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Beyond employment, business leaders are increasingly worried about taxation, which moved up to fifth place on the list of top concerns for Scottish businesses. The survey found that 63% of respondents believe Scotland’s business tax rates are too high, while 75% feel the same about income tax rates.

Nearly half of respondents expressed serious unease over Scotland’s tax divergence from the rest of the UK (49%). Among them, 40% believe tax differences will impact hiring decisions, and 34% fear it could deter investment.

“Tax policies play a crucial role in shaping Scotland’s business landscape,” continued McWilliam.

“Our survey results show that a number of business leaders remain wary of increasing tax burdens, particularly when we look at Scotland’s ability to attract and retain top talent.”