Mid-Market AI Adoption Hindered by Lack of Expertise and Inadequate Technology Foundations, Klarus Finds

• On average, 91% of mid-market companies are confident in their internal expertise across all areas of AI deployment but lack of AI expertise is top reason pilots stall
• 83% report poor data quality and 69% say it is delaying or preventing AI activity
• 45% say AI helps junior staff work better or faster and 24% say it is creating new roles and opportunities

LONDON--(BUSINESS WIRE)--Klarus, a specialist technology consultancy with a focus on artificial intelligence (AI), has published new research showing that mid-market companies in the UK and Ireland are embracing AI but practical expertise, data quality and governance are holding many back from scaling beyond pilot stage.

The report, “The state of AI in the mid-market”, based on a survey of 500 senior decision makers at mid-market companies, found that almost three quarters (73%) of companies have partially or fully deployed AI but there is a clear gap between perceived expertise and ability to deliver. On average, 91% of mid-market companies are confident in their internal expertise across all areas of AI deployment, yet lack of AI expertise was the joint top reason projects failed to move beyond pilot stage, cited by 48% of respondents that had explored AI.

That 39% of respondents highlight building internal expertise as one of their top priorities for AI over the next 12 months suggests companies are recognising that confidence needs to translate into execution capability.

Mid-market companies are crucial to economic growth. In the UK, they represent just 0.5% of companies yet account for 30% of UK economic Gross Value Added (GVA), according to NatWest (1). The Irish mid-market is also heavily interconnected with this economy. According to an Enterprise Ireland survey, 64% of Irish companies maintain a permanent physical footprint in the UK, with 35% operating across multiple UK locations (2).

AI is an enabler of this growth. However, the Klarus research reveals that only 10% of respondents that have explored AI have successfully scaled all of their initiatives beyond the pilot stage. The remaining 90% still have some AI initiatives in the early stages or have experienced stalled pilots.

Inadequate technology and data foundations are a blocker to AI

The research found that many mid-market companies continue to struggle with technology and data foundations, which are critical to AI success. Alongside lack of expertise, concerns around guardrails, including governance, ethics, security and privacy, were also cited by 48% as a primary reason for stalled pilots. More than half (59%) have yet to establish a comprehensive AI governance framework, with companies lacking either formal policies, controls, or both.

Among those that have piloted or deployed AI, 83% experience poor data quality and 69% say it is preventing or delaying their AI activities. Where AI projects delivered against expectations, strong data quality was the most common critical success factor, cited by 59%, followed by effective governance, security, privacy and ethical controls at 54%.

The findings suggest companies recognise how important these foundations are to AI delivery. Improving data quality is the joint top priority for the next 12 months, cited by 43% of respondents, while 35% plan to strengthen their AI guardrails.

AI will reduce some roles but increase the value of AI-enabled talent

The research also highlights the impact of AI on talent beyond automation and headcount reduction. While cost savings and productivity gains remain important expected outcomes, AI is also improving the quality of work. When asked the impact AI is mostly having on junior staff, nearly half (45%) say it is enabling them to do their job better or quicker and 24% say it is creating new roles and opportunities.

Alper Gunaydin, CTO at Klarus, said: “Mid-market companies have a real advantage because they can often move fast, particularly when it comes to technology transformation. We see this agility in action when companies are turning to AI and automation to address productivity and accelerate growth. However, our research shows that too many pilots stall because companies lack AI expertise, quality data and effective governance. Making that agility count requires clear priorities, strong foundations and access to senior expertise, all of which will help translate investment into tangible business outcomes and unlock growth without increasing the cost base.”

Tim Flagg, CEO of UKAI, the UK's trade association for AI businesses, said: “The findings come as AI adoption becomes a central priority, with UK government policy now focused on closing the productivity gap by embedding AI across businesses, as well as public sector organisations. While tech giants often dominate headlines, it is the mid-market that will be the true driver of this transition. It’s clear from the research that there remain some common hurdles that we need to address together, such as setting out guardrails, building capabilities and governance processes to earn consumer trust, and mid-market companies have a key role to play in turning government policy into mainstream economic reality.”

The report is available to download at: https://www.pages.klarus.com/en/research-the-state-of-ai-in-the-mid-market

ENDS

(1) NatWest report, “The Critical Middle”, published December 2024
(2) Enterprise Ireland’s 2026 UK Market Sentiment Survey

Methodology

The research was conducted by Vitreous World among 500 respondents at mid-market companies in the UK and Ireland in May and June 2026. For the purposes of this survey, mid-market companies were defined by both revenue and organisational size, with participating businesses having annual revenues between £200 million and £2 billion and employing between 300 and 3,000 people.

Respondents were senior decision makers with responsibility for, or influence over, IT and technology decisions, including owners, founders, managing directors, C-level leaders, vice presidents, directors, department heads and other senior management across both IT and business functions. The sample included privately owned businesses, whether owned by individuals or families or by another corporate business, as well as publicly owned companies listed on a stock exchange.

Vitreous World is a member of the Market Research Society and follows the MRS Code of Conduct.

About Klarus:

Headquartered in London, Klarus is a specialist technology consultancy dedicated to closing the implementation gap between AI potential and tangible ROI. The firm replaces the traditional consultancy pyramid with a global network of hand-selected, senior experts who combine deep sector knowledge with technical proficiency. Services cover the full breadth of technology transformation, including data, enterprise applications and cyber.

The group also includes Chapter 1, a boutique search firm that secures world-class leadership for major transformation initiatives and top-tier consulting firms globally.

For more information, visit www.klarus.com.