Tech Council report finds AI adoption could add $136,000 yearly to average small business

Small and medium businesses that adopt artificial intelligence across their everyday work could gain an estimated $136,000 in yearly productivity gains, according to new research published by the Tech Council of Australia.

The report, titled Accelerating AI Impact for Small and Medium Enterprises, was prepared by Delwood Advisory with backing from Employment Hero, Google and Deputy. It calculates that wider adoption across the sector could add as much as $93 billion every year to the Australian economy.

Despite the clear upside, uptake remains low. The findings reveal that while small and medium companies employ nearly two thirds of Australia's private workforce, only one in four businesses currently uses AI. Just 5 per cent have rolled out AI tools across their wider operations.

Big gains behind everyday admin

Among the small businesses already putting AI to work, 94 per cent reported improvements in productivity. A further 54 per cent of workers using the technology noted higher job satisfaction, largely because automation took routine administrative burdens off their plates.

Tech Council of Australia chief executive Kate Cornick pointed out that a large gap remains between the promise of AI and the practical benefits small operators currently receive. Everyday back-office chores, particularly payroll, staff rostering, recruitment and compliance tracking, account for a substantial portion of the lost hours.

Adoption is uneven across sectors and locations. The report found regional businesses trail their metropolitan peers by a wide margin. Across specific industries, construction, retail and hospitality show some of the widest gaps in AI adoption when compared to large corporate competitors.

Owners cited several persistent hurdles stopping them from taking the first step. The main barriers include limited understanding of how AI tools function, gaps in internal digital skills, uncertainty around return on investment, and worries about data security and reliability.

What this means for Australian businesses

For owners juggling tight margins and staff shortages, this research offers a clear signal: you do not need complex tech projects to see tangible returns from AI.

• Start with back-office paperwork. You do not need to reinvent how you deliver your core service. Look first at high-frequency administration, such as compiling staff rosters, reconciling invoices or drafting standard job descriptions.
• Audit your current software subscriptions. Many tools you already pay for, including modern accounting, rostering and customer management platforms, now include built-in AI functions at little or no extra cost. Exploring those native features is safer and faster than buying new standalone software.
• Involve staff early to build confidence. Because employee satisfaction rises when tedious tasks are removed, test simple automation tools alongside your team. Clear guidelines on data privacy will help address staff doubts about reliability.