The SME ‘CTO as a service’ is still a discovery project

On 26 June the Department for Business and Trade (DBT) published its update on the SME Digital Adoption Taskforce, the industry-led group it set up in April 2024. The taskforce’s final report, published with the government’s response on 31 July 2025, made 10 recommendations and set a goal of making UK small and medium-sized enterprises the most digitally capable and AI confident in the G7 by 2035. The update had been provisionally scheduled for spring 2026.

The stakes are not small. The taskforce counted more than 5.5 million SMEs, 99.8% of UK businesses, and cited an estimate from Be the Business that raising SME productivity by 1% over five years would add £94bn a year to GDP.

Blair McDougall, minister for small business and economic transformation, introduced the update with confidence: “We are delivering on that commitment, and I am delighted to share progress, from the rollout of the Business Growth Service (BGS) to the launch of pilots, and work with industry on future support.”

Read recommendation by recommendation, the update is a progress report on process. For the owner of a 30-person firm deciding whether to pay for an AI tool, it holds little they can use this year. The practical conclusion is that SME leaders should stop waiting for the state to advise them and do the taskforce’s most useful recommendation for themselves.

The online CTO has no date

The recommendation that mattered most to buyers was the third: a scalable online chief technical officer as a service, giving SMEs AI-powered guidance through the BGS. The update says DBT ran an eight-week discovery into how it could help SMEs adopt digital technology, including through such a service, and is integrating services into the BGS and Business.gov.uk. It gives no launch date for the CTO service itself.

Elsewhere the pattern repeats. The call for a No.10-led public-private initiative has become a series of roundtables with industry leaders, which have started upskilling roadshows, with a new support package to be announced by the end of the year. The recommendation to appoint a minister accountable for SME digital and AI adoption will be fed into “the next opportunity to design ministerial portfolios”. Financial support for adoption remains a cross-government review of what effective funding models may look like.

The pilots are real but small. Place-based pilots have supported 806 businesses in Leeds and drawn 223 applications to a recruitment trial in the West of England. Against 5.5 million SMEs that is a test, which is exactly what the taskforce’s tenth recommendation, a ‘test and learn’ approach, asked for.

Waiting is the expensive option

None of this is unreasonable for government. Evidence reviews and pilots are how public money ought to be spent. The problem is that the government’s timetable and the buyer’s timetable are different. A support package due at the end of 2026 and a CTO service with no date leave a small firm making this year’s AI decisions, and probably next year’s, without either.

The taskforce’s own diagnosis shows why that matters. Its final report said UK SMEs lag their G7 competitors on the uptake of digital tools and AI, and added: “Many overrate their readiness, hampered by time, cash and know-how gaps.” A firm that overrates its readiness and has no adviser is the firm most likely to buy the wrong tool, or to buy the right one and never change the process it was meant to improve.

The CTO job falls to the buyer

What the taskforce wanted the online CTO to do is not mysterious. Its report described basic diagnostic tools and pointers to help SMEs consider AI and digital products as they develop their businesses, with the emphasis on simplicity. A managing director can run a version of that diagnostic in an afternoon: list the three processes that consume most staff time, mark which involve documents, text or repeated data entry, and trial one tool against one of them, with a measure of success agreed before the trial starts.

The second step is to use the support that exists rather than the support that is coming. The update points to the BGS, advisers at local Growth Hubs, Made Smarter, the Help to Grow management program and Backing Your Business webinars run with Enterprise Nation. These are signposts and general advice rather than a technology decision, but they are available now.

The third is to write an AI rule before the tools spread: which business data staff may put into which tools, and who signs off a new one. It costs nothing, and it is the one piece of adoption no future government package will do on a firm’s behalf.

There is a reasonable case that the taskforce’s ambition was always going to outrun a single year of delivery. But SME owners do not need the G7 ranking to move in order to make a sound decision about one process and one tool.

The taskforce asked for a CTO for every small business. Until government builds one, the job belongs to whoever signs the software invoices.