Latvia's small and medium-sized enterprises increasingly regard artificial intelligence (AI) and automation as a practical tool for raising productivity, according to a survey carried out by Luminor bank.* Roughly a third, or 32% of business owners, say that artificial intelligence will help them work more efficiently this year, while 18% plan to use technology to manage a growing workload without taking on new staff. At the same time, 39% say they do not yet feel any impact from AI on their operations.

The survey data show that the focus of Latvia's small and medium-sized businesses is currently on increasing productivity rather than replacing the workforce. Artificial intelligence solutions are seen as an opportunity to offset labour shortages and rising costs – only 6% of the companies surveyed see any prospect of reducing headcount in future because of artificial intelligence. At the same time, 13% of business owners plan to invest deliberately in retraining and training their staff, viewing the introduction of technology as a chance to develop new skills.

“The conditions are in place for this to be the year in which businesses and the labour market feel the impact of technological change more distinctly – artificial intelligence is gradually taking over some functions. On the one hand, this opens up considerable potential for growth in labour productivity and the chance for companies to build their competitiveness more quickly. On the other, the transition period may create significant structural challenges for both companies and employees. There is still a great deal of uncertainty about how rapid and how far-reaching this transformation will be, so a decisive factor will be companies' ability to invest in good time in skills, processes and the quality of technology implementation,” says Uģis Počs, Head of Small and Medium-Sized Enterprises at Luminor bank.

The benefits offered by artificial intelligence are valued most highly in the service sectors. The potential for raising productivity is highlighted in particular by companies in the arts, entertainment and recreation sector (44%), closely followed by the finance and insurance sector (43%) and the education sector (39%). At the same time, finance sector companies are also among the most active in planning to use artificial intelligence solutions to manage workloads without taking on additional staff (36%). A similar approach can be seen in the accommodation and catering services sector (29%), as well as in wholesale and retail trade (28%).

“The survey shows that only 4% of Latvian business owners see the development of artificial intelligence as a threat to their business, which points to a healthy and pragmatic attitude. This is often linked to concerns about falling behind competitors, cyber security risks, or the need to make investments whose returns are not clearly predictable in the short term. The development of artificial intelligence is forcing companies to take a critical look at their business models, and those that delay risk losing out in the competitive struggle,” says Uģis Počs.

Although 39% of small and medium-sized business owners say they do not yet feel any impact from AI on their operations, attitudes have changed considerably over the course of the year – last year more than half, or 62% of business owners, took this view. Latvian companies are becoming more open to considering AI solutions. In Lithuania and Estonia, meanwhile, almost half, or 48% of business owners, still believe that artificial intelligence will not affect their business.

* The Luminor bank survey was carried out in November 2025 in cooperation with the research agency Norstat, surveying a total of 250 small and medium-sized enterprises in Latvia. Respondents could select several answers to the question.