Small Business Survey Reveals Slow AI Adoption Amid Persistent Cost Concerns

The August 2025 Main Street Business Survey, conducted by the Freedom Economy Index, reveals that small business owners remain primarily concerned with rising costs and soft consumer demand, with artificial intelligence adoption lagging significantly. Only 50% of business owners have begun exploring AI implementation in their operations, leaving substantial room for technological advancement across the sector.

According to the survey results, 25% of respondents identified rising costs as their top concern, while 22% cited declining consumer demand as their primary issue. Access to affordable capital ranked third at 12%, reflecting the ongoing challenges small businesses face in the current economic environment. The survey, now in its fourth year, provides critical insights into the mindset of America's small business community during this period of economic transition.

Michael Seifert, CEO of PublicSquare, noted that small business owners have endured inflation, supply chain disruptions, and various mandates, and are now seeking regulatory stability rather than government assistance. The data shows businesses are making cautious investments in growth, representing a significant shift from defensive postures observed a year ago. However, persistent high costs and policy uncertainty continue to slow investment decisions across the sector.

Regarding AI adoption, 45% of business owners reported not using artificial intelligence in their operations. Among those implementing AI technology, marketing and advertising emerged as the primary application area at 32%, followed by business operations at 9.2% and customer engagement at 7.9%. Notably, 26.6% of AI adopters reported reduced staffing needs, suggesting potential labor market impacts as technology adoption accelerates. View the full results here for detailed breakdowns.

The survey also introduced the new State of Main Street Index, which debuted at 57 on a 100-point scale. This innovative measurement tool assesses current economic health, customer traffic, revenues, and forward-looking expectations for growth, inflation, and hiring over the next six months. Scores above 50 indicate positive momentum, with the August reading reflecting cautious optimism among small business owners.

Andrew Crapuchettes, CEO of RedBalloon.work, emphasized that small business owners seek stable rules to make long-term investments in areas like AI, expansion, and hiring. The survey results, available at https://www.freedomeconomyindex.org/august-survey, show that businesses are transitioning from survival mode to growth-oriented strategies, though economic headwinds persist. Krystal Parker, President of the U.S. Christian Chamber of Commerce, added that continued high prices could lead consumers to tighten spending, potentially slowing economic recovery.

The Freedom Economy Index represents a collaborative effort between PublicSquare, RedBalloon.work, and the U.S. Christian Chamber of Commerce, providing comprehensive data on small business sentiment and economic outlook. The findings underscore the delicate balance between technological adoption, economic pressures, and policy environment that defines the current small business landscape.