Australia’s SME AI report identifies a broad-adoption gap behind a $93 billion opportunity

The Tech Council’s new research links practical training and sector-specific help to wider use of AI in smaller businesses.

A new Tech Council of Australia report estimates that wider AI use by small and medium businesses could generate up to $93 billion in additional annual economic value over the next five years. Released on 22 October, Accelerating AI Impact for Small and Medium Enterprises puts the adoption process, rather than access to a model alone, at the centre of the opportunity.

The research was undertaken by Delwood Advisory with support from Employment Hero, Google and Deputy, drawing on data from Deputy, Xero and LinkedIn. It estimates annual productivity value of $136,000 for an average SME moving from no AI use to broad adoption. These are modelled opportunities, not money already earned by every participating business.

Broad adoption is still uncommon

The report finds that about a quarter of Australian SMEs use AI, while only 5% use it broadly across their organisations. Regional businesses trail metropolitan ones, and construction, hospitality and retail show sizeable adoption gaps relative to larger enterprises.

That difference between trying a tool and adopting it broadly is operationally meaningful. A single owner may use AI to draft a message without changing the process through which customer enquiries, scheduling or invoices move through the business.

A broader rollout requires those steps to connect. If a generated estimate still has to be copied into several unrelated systems, the saved drafting time may be small compared with the remaining administration. The useful unit of change is an everyday task from its first input to its completed result.

Industry examples make the decision more concrete

The report discusses applications such as hospitality payroll and rostering and retail recruitment. It recommends practical training, expert advice and examples shaped around particular industries.

For a hospitality operator, a useful exercise could begin with a week of actual staffing requirements and the rules that a proposed roster must satisfy. The team can compare the original preparation process with the assisted one and see where time, corrections and handoffs change.

A construction business might begin with quotation preparation instead. The relevant inputs, checks and approval points differ, so the implementation should reflect that task rather than reuse a generic demonstration unchanged.

This kind of process-level comparison also helps an owner decide what to do with saved time. Faster administration may support quicker responses, more customer contact or a less pressured workday. Those outcomes are related, but they are not interchangeable accounting measures.

Support has to reach the person doing the work

The research identifies limited AI understanding, skills gaps and uncertainty about returns among the barriers to getting started. Google accompanied the launch with practical workshops at the Tech Council’s AI x SME event in Sydney on 23 October.

Training can be most useful when it leaves a business with a completed example from its own operations. The owner then has something to repeat, explain to an employee and compare with the previous method.

The report’s large economic estimate gives the debate scale. Its adoption findings give smaller businesses a more immediate starting point: choose a recurring task, understand the full workflow and work out what changes when AI is introduced. That is where a national productivity projection becomes a business decision.

Sources

- [TCA AI x SME Research Launch](https://techcouncil.com.au/newsroom/tca-ai-x-sme-research-launch/) — Tech Council of Australia · 2026-10-22 - [AI could add $93 billion to Australian small businesses](https://blog.google/intl/en-au/company-news/ai-could-add-93-billion-to-australian-small-businesses/) — Google Australia · 2026-10-22