New Research: a quarter of small businesses use AI, but only 5% have got it working across the business
The Tech Council of Australia’s new report on AI in small and medium businesses was released on 22 October 2026. It was produced with Employment Hero, Google and Deputy, and researched by Delwood Advisory. The report highlights how big the gap is for businesses getting real value out of the use of AI.
Just 26% of Australian SMEs use AI at all. Only 5% use it across the whole business, compared with 16% of large enterprises. Adoption has risen 11 percentage points since mid-2024, but whole-of-business use is up just two points. Around 86% of the value SMEs get from AI comes from ChatGPT-style assistants. Regional SMEs adopt AI at about half the metro rate (16% vs 30%).
The gaps are mostly about skills and systems, not tools. Only 25% of SMEs have systems and data fully ready for AI. Among those already using it, 88% have trouble connecting it to their existing systems. Fewer than 1% have AI skills across the whole organisation, and 53% describe their workforce as basic or novice. The report estimates that closing the gap is worth up to $93 billion a year, or about $136,000 a year for an average SME that goes from no AI to using it across the business.
Our read
The gap between the 26% and the 5% isn’t about access to AI. The tools are cheap and everywhere. What’s missing is the unglamorous work underneath: clean data, connected systems, and people who can take AI out of one person’s browser tab and build it into how the business runs. SMEs employ 65% of the private sector workforce, and most have no tech team to do that work. That’s where demand will build.
If you’re hiring
- Start with your data, not an AI title. The first roles that close the gap are data engineers, integration and cloud specialists, and someone who owns cyber and governance.
- Contract for the build. For a lot of SMEs, a data audit, pilot or integration is a defined piece of work, not a permanent team.
- Train the people you have. With fewer than 1% of SMEs skilled across the business, buying tools without training gets you to “limited use” and stops there.
If you’re a candidate
- AI literacy is now the baseline. What sets you apart is making it work inside messy, real systems and explaining the risk to someone who isn’t technical.
- Breadth is valued in small teams. Engineers who can handle data, integration and governance across one small business are the profile SMEs will compete for.
- Regional work is still ahead. With Hunter and Central Coast adoption at half the metro rate, local employers will need this capability, and you won’t need to move to Sydney to do it.
If you’re building your tech capability, let’s talk.