Innovative new projects are set to receive government investment to help businesses make better use of technology and modern management practices. Small firms, academia and local authorities can now apply for a share of the next wave of funding to help them become even more profitable.

Technology projects and pilots across the country – including digital dairy farming, artificial intelligence (AI) chatbots and cloud computing technology – are among those set to benefit from a new fund to boost the productivity of UK small businesses, Small Business Minister Kelly Tolhurst has confirmed.

A total of 15 projects from all parts of the UK won a share of £2m from the first round of funding from the Business Basics Fund. Among the winning bidders are cutting-edge collaborations between businesses and groups including the Chartered Institute of Professional Development (CIPD), Enterprise Nation, universities, Cavendish Enterprise, government-backed growth hubs and local authorities.

Cavendish Enterprise, a national business support provider, will test an innovative management development programme for micro-enterprises. London-based Enterprise Nation will test ways to encourage SMEs to adopt digital technologies such as cloud computing.

Greater London Authority, CognitionX, Capital Enterprise, and the London School of Economics will be working together boost adoption of AItechnologies like chatbots for the retail and hospitality sector. Chatbots can help bridge the gap between online and offline experiences.

Locality, a London-based charity that supports local community organisations, will pilot a scheme to increase the adoption of cloud-based accounting packages by community sector SMEs. Devon County Council will complete a research project to help rural micro businesses adopt modern business practices.

In further collaborations, Food Forward and the University of Surrey are developing an online tool for SMEs in the dairy sector to find proven technologies that can accelerate their production and boost productivity. And Cass Business School (City) in partnership with the University of Oxford, Bocconi University, London Growth Hub and Cavendish Enterprise will deliver a cutting-edge, completely free-of-charge, business support programme to hundreds of UK micro businesses focused on systematic decision making.

Small Business Minister Kelly Tolhurst said: ”Small businesses are the backbone of our economy and, as part of our modern industrial strategy, we are supporting them with new investments to boost their productivity and ensure they can continue to thrive in the future.

“This investment will support innovative projects that test how government and private sector companies can help small businesses adopt a range of technologies and management practices that save them time and make them more efficient.”

The second funding competition has now launched with £2m available to businesses, academia and local authorities for new projects focused on testing ways of rolling out existing productivity-boosting technology and management practices to businesses.

The fund, which forms part of the government’s plan to boost UK national productivity through its Industrial Strategy, is delivered in partnership with Innovate UK and Nesta.

Research from the CBI suggests that by encouraging more businesses to take advantage of existing technologies, management practices and business support– such as cloud computing, mobile technology and e-purchasing – the UK economy could receive a £100bn boost and see a 5% reduction in income inequality.

Dr Ian Campbell, executive chair of Innovate UK, said: “Trying something new is a big step for any business, but true innovation enables firms grow. To solve the UK’s productivity puzzle, we need more firms to adopt new, but proven, technologies and novel ways of doing things so they can get ahead of the competition.

“That’s exactly what the Industrial Strategy, through the business basics scheme, is helping these projects to achieve.”

Geoff Mulgan, chief executive of innovation foundation Nesta, said: “The Business Basics Fund signals a welcome commitment by government to applying experimental methods to boosting economic productivity.

“It is vitally important that we gather evidence about the effectiveness, or otherwise, of the billions of pounds that are spent by governments around the world, currently with not enough hard evidence about what works.”