Why Midlands businesses can't afford to sit on the AI sidelines
Written by Nehal Jilka, Birmingham-based Advisory Partner at KPMG UK.
There's a confident buzz across the West Midlands right now.
According to KPMG's latest Private Enterprise Barometer, nine in ten private businesses in our region are feeling optimistic about growth prospects this year, and they're backing that confidence with real investment.
That optimism sits an encouraging three points above the UK average, but while regional businesses are bullish about growth, our appetite for tech investment is trailing slightly behind at 34 per cent compared to 39 per cent nationally.
That gap matters. Because the businesses that are using AI effectively are more likely to maintain a competitive edge, boost productivity, reduce costs and enhance decision making.
The AI reality check
Looking beyond our doorstep, the global picture is revealing. According to KPMG's latest Global Tech Report, only 11 per cent of organisations have reached full maturity in AI adoption today, yet half expect to get there by the end of 2026. That's ambitious, and perhaps overly so for some.
What’s interesting is the concept that we're moving beyond AI as a tool, to AI as a colleague. The Global Tech Report shows that 88 per cent of organisations are already embedding AI agents into their systems, and 92 per cent report that managing AI agents will become an important skill withing the next five years.
For Midlands businesses, this creates both opportunity and urgency.
Those who learn to orchestrate AI agents effectively – managing the right balance between human oversight and AI autonomy – will gain significant competitive advantage.
Next steps
The Midlands has real strengths to draw on. We've got world-class industrial manufacturing expertise that's crying out for AI-enabled optimisation. Our clean-tech sector is growing rapidly, with investment platforms helping bring forward technology-enabled growth opportunities at pace.
All sectors will and are impacted by digitisation and AI; the time to act is now. Think about the potential when you combine the region’s deep engineering heritage with AI-powered predictive maintenance, or automotive excellence with autonomous systems development.
With 58 per cent of regional businesses planning to diversify their service offerings and 57 per cent targeting new markets, AI can be the enabler that makes those ambitions achievable.
But it’s important to be strategic.
Businesses should take care to invest in AI safely to address specific challenges that align with their broader strategic priorities, rather than adopting technology for its own sake.
This could mean mapping AI to enterprise-wide transformation goals and upskilling people to ensure they're capable of managing agents, setting the right parameters and ultimately ensuring that the right outcomes are achieved.
Without this groundwork and the appropriate controls in place from the outset, businesses risk investing significant resources into technology that may not necessarily support their core objectives or even creates new challenges.
The bottom line
The Intelligence Age isn't waiting for anyone. With demand driving momentum across our region and firms actively pursuing new markets, the Midlands can be rightly ambitious about its future.
The question is whether we'll back that ambition with the AI-enabled capabilities needed to deliver it.
The good news is we've got the optimism, the industrial strengths, and the investment appetite. Now we need to channel it purposefully into AI adoption that's scaled, strategic and supported by the right foundations and controls.
Because in 2026 and beyond, the businesses that master AI won't just survive the disruption, they'll be the ones creating it.