Half of SMEs in Australia & NZ yet to adopt AI technology

Data indicates that despite the rising popularity of artificial intelligence (AI), half of small-to-medium-sized enterprises (SMEs) in Australia and New Zealand have yet to adopt it into their operations. The findings come from a global survey conducted by Peninsula Group in August 2024 across five countries: Australia, New Zealand, Canada, Ireland, and the United Kingdom.

Security risks emerged as the primary concern around AI for approximately a quarter of the respondents (24% in Australia and 26% in New Zealand).

"While AI offers immense potential to boost productivity and streamline processes, concerns about its risks are growing, especially in the wake of high-profile cyber breaches. Given Australia's vulnerability, it's no surprise that small businesses are wary of sharing data with third parties, which is a prerequisite for most AI tools," said David Price, CEO at Peninsula ANZ and BrightHR ANZ.

Globally, security risk was cited by nearly half (47%) of the employers surveyed as the most significant concern about AI in the workplace, a significant increase from the 30% reported the previous year.

Concerns, including reputational impact, risk of breaking the law, loss of intellectual property, and the impact on work quality and productivity, have all seen notable year-on-year increases.

Although the 484 Australian and New Zealand participants expressed considerable concern about security risks, they still ranked as the most likely to regularly use AI compared to SMEs in Canada, Ireland, and the UK.

For Australian respondents, the risk of losing intellectual property and an increased margin of error were tied as the second most significant worries. New Zealand participants, however, were more concerned about the quality of work and productivity.

Australian employers were found to be twice as concerned about the loss of intellectual property compared to their counterparts in Ireland and the UK and three times more worried than Canadian employers.

"It's clear that while small businesses are slowly dipping their feet in the water when it comes to adopting AI, their concerns around the risks it carries are stopping them from diving straight in and widely implementing new technologies," noted Price.

The usage of AI remains relatively low across small and medium businesses globally. Despite a 50% year-on-year increase, only one in ten SMEs reported regularly using AI in their workplace.

The survey indicates that the most popular use of AI among small businesses in Australia and New Zealand was for administrative tasks, with 18% and 19% of businesses, respectively, using AI for this purpose. Specific applications included creating meeting agendas, summarising documents or resources, and drafting emails or communications.

About half of the survey participants from Australia (47%) and New Zealand (53%) reassured that people are irreplaceable in their business. However, nearly a quarter (22% in both countries) indicated that they believe AI will eventually replace jobs at their company.

"As the cost of doing business rises in 2024, employers are understandably assessing where they can decrease overheads, speed up processes, boost productivity, and ultimately, boost profits. So, it's no surprise to see SME business owners and employers voice the prediction that some positions will become redundant as AI is increasingly adopted," added Price.

Approximately a third of respondents in Australia and New Zealand (32% and 33%, respectively) said they perceive AI as having the potential to positively transform workplaces. New Zealand participants were more likely to state that AI was useful but would not overtake traditional ways of working, a belief held by 29% compared to 21% in Australia.

"Whilst small businesses aren't completely opposed to using AI, they're seeking clarity and assurance when it comes to security, productivity, and quality of output. These are concerns that AI developers will need to address if they hope to increase its uptake in the global SME community," stated Price.