What the Latest Industry Shift Means for SMEs - 'bubble bursting and immunity'?

A Talisman AI Perspective

In recent weeks, the landscape around artificial intelligence has shifted noticeably – and the implications for small and medium-sized enterprises (SMEs) are substantial.

While the original article (from BBC) addresses broader themes, the key take-aways for SMEs are worth unpacking. At Talisman, we work with businesses to translate big trends into actionable change.

Here’s what this development means for you, and how you can respond.

Why it matters now

Accelerating moves in AI regulation, governance and adoption are creating a sharper divide between organisations that are ready for the change and those that risk being left behind. That's the real catalyst.

For any organisation, this presents both risk and opportunity:

• Risk: if you delay, you may face a competitive disadvantage, an increased compliance burden, and missed value.

• Opportunity: if you act now, you can gain early advantage, build trust with stakeholders and embed AI as a strategic enabler.

What are the key implications for Businesses?

Here are five major themes, and what they mean for you:

1. Regulatory and governance pressures

   
   

   Even though many regulatory frameworks are still emerging (for example in the EU, via the Artificial Intelligence Act), SMEs cannot assume “small size = no impact”. The legislative net is widening, and downstream users of AI systems may be caught by obligations. 

   
   

   What this means for you:

   
   

   • Review any use of AI-enabled systems (including third-party tools) to check risk, compliance and transparency.

   • Be prepared to demonstrate appropriate controls (data governance, human oversight, traceability) even if you’re not the vendor.

   • Build governance into your AI adoption plan as a core element, not an afterthought.

   
   

2. The “AI readiness” gap is widening

   
   

   Many SMEs recognise the promise of AI but struggle with where to start, skills gaps, and internal confidence. For example, fewer than 1 in 3 small businesses feel confident about embracing AI. 

   
   

   What this means for you:

   
   

   • Don’t wait for perfect; focus on “good enough to start”.

   • Prioritise training and upskilling to boost internal confidence.

   • Use a scaffolded approach: quick wins first (e.g., automating a routine process), then scale.

   
   

3. Competitive advantage through early adoption

   
   

   Research shows that AI adoption by SMEs can deliver real productivity gains. 

   
   

   What this means for you:

   
   

   • Identify high-leverage use cases in your business where AI or automation can free up time, improve quality or reduce cost.

   • Think “augmenting humans” rather than “replacing humans” – that tends to deliver higher buy-in and faster results.

   • Use early wins to build momentum and stakeholder confidence.

   
   

4. Data, tools and ecosystems matter

   
   

   The infrastructure behind AI (data availability, quality, tools, integration) remains a barrier for many smaller firms. The government’s sector study finds that scaling AI requires attention to data, people and infrastructure. 

   
   

   What this means for you:

   
   

   • Understand your data: what you have, what you lack, and what you need to succeed.

   • Align any AI or automation tool choices with your existing systems and business model.

   • Consider partnerships or platforms which reduce cost and complexity (rather than trying to build everything in-house immediately).

   
   

5. Strategic mindset shift: from “nice to have” to “must have”

   
   

   For many SMEs, AI has still been treated as a peripheral project. But the evolving regulatory, competitive and operational environment means it’s increasingly strategic.

   
   

   What this means for you:

   
   

   • Anchor AI in your business strategy: how will it support your mission, how will it enhance engagement, change or transformation?

   • Consider how AI will affect your stakeholder communications, your change plan and your digital transformation roadmap (especially relevant for you, given your consultancy work in change and engagement).

   • Use a phased playbook: Explore → Enable → Embed (which aligns perfectly with Talisman’s playbooks).

   
   

Practical next steps for Your Business

Here’s a quick set of actions you can take now:

• Conduct an AI Readiness Snapshot: Assess where you stand – in terms of data, skills, processes, governance and culture.

• Identify 1-2 “low-hanging” AI/automation use cases: Prioritise areas of repetitive work, high cost, or high risk where AI could add value.

• Governance & ethics check: For any AI tool or system, ask: “What data are we using? Who is human-in-the-loop? What transparency do we provide? What risk is there of error, bias or reputational harm?”

• Build your communication and change plan: Engage your people early. Help them understand why this matters, how it will impact their work and how you will support the transition.

• Create a roadmap aligned to Explore→Enable→Embed: Use the structure of Talisman’s three-stage approach (and possibly the Accelerate variant) to organise your investment, build capability and scale sustainably.

Why Talisman is particularly well-placed to help

At Talisman AI Consulting we specialise in helping SMEs navigate exactly this space: how to use AI to support change, engagement and transformation (rather than just tech for tech’s sake). We bring:

• A practical, phased approach (Explore → Enable → Embed) aligned with your strategic mission.

• A focus on human-centric engagement (critical when AI touches people, change, culture).

• Expertise in SMEs: we understand the constraints and the levers of small-medium organisations.

• A commitment to enabling self-sufficiency – we help you build the capability so you’re not reliant for the long term.

If you’d like to explore how this recent shift affects your business and what you can do about it, we’d be happy to talk.

Closing thoughts

The era of “AI as an optional bolt-on” is rapidly passing.

For SMEs, the question is no longer if but how and when. The changes highlighted by the BBC article aren’t distant - they are actively reshaping the playing field.

By moving thoughtfully now, you can avoid being caught off-guard and instead turn the shift into strategic advantage.

Feel free to reach out if you’d like a tailored conversation about your business’s AI readiness, or how to embed AI into your change and engagement plans.