Only one in four Australian small businesses use AI, so most of the $93 billion is still sitting in the car park
By Brett Gavaghan, Founder of Adaptd ·
A Tech Council of Australia report says wider AI use by small and medium businesses could add up to $93 billion a year. Only about one in four uses it now.
The short version
- A Tech Council of Australia report says broader AI use by small and medium businesses could add up to $93 billion a year.
- Only one in four Australian SMEs uses AI, and just 5% use it broadly across the business.
- An average SME that goes from no AI to broad use could gain about $136,000 a year in productivity.
Ask a small business owner about AI and you rarely get a flat no. You get "when I find a spare Tuesday". A new report puts a number on what that wait is costing.
What did the Tech Council report find?
The Tech Council of Australia found that only around one in four Australian small and medium businesses use AI, and just 5% have adopted it broadly across their operations. The report, published on 29 October 2026, was prepared by Delwood Advisory with support from Employment Hero, Google and Deputy, drawing on data from Deputy and Xero among others.
It estimates wider use could add up to $93 billion a year in economic value. Of the SMEs already using AI, 94% reported productivity improvements.
What is holding small businesses back?
The biggest barriers in the Tech Council report are a limited understanding of AI and a shortage of skills. Owners are also unsure about the return and worried about security and reliability. Regional businesses lag metropolitan ones, and construction, hospitality and retail have some of the biggest gaps compared with larger companies.
The examples are refreshingly unglamorous: payroll and rostering in hospitality, recruitment in retail. Nobody is asking the corner cafe to build a robot barista.
What should your business do about it?
Start with one routine admin job your team repeats every week and test AI on that alone. Rostering and recruitment, two of the report's own examples, are good places to look.
My take: the $136,000 figure is an average for going from nothing to broad use, so treat it as a direction, not a promise. And if you think you're too small, remember small businesses employ almost two-thirds of Australia's private-sector workforce. The report isn't about someone else.
Pick one job and give it a month. Call it a trial rather than a transformation, and it costs a lot less.
Sources
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