2degrees has published research linking AI adoption to improved profitability in New Zealand businesses. Deloitte Access Economics prepared the study.
The report found that the average small business using AI earned approximately $400,000 more in 2025 than comparable non-adopters. The difference was even wider among large companies, with companies that implemented AI earning approximately $59.1 million more than similar companies that did not implement AI.
The findings are presented as an initial estimate of the relationship between AI use and company-level productivity, based on survey data from New Zealand companies. The study also looked at how companies are deploying AI, where they’re directing their spending, and what’s preventing widespread adoption.
The use of AI now appears to be widespread, at least at a basic level. According to the study, 82% of businesses are currently using AI, but many are still in the early stages and primarily rely on AI capabilities built into the software they already use rather than dedicated tools.
This shows that there is a gap between experimentation and deeper operational changes. Larger organizations are moving more quickly, while smaller businesses are less likely to use or plan to deploy certain AI products.
New Zealand’s broader productivity context lends weight to this finding. The country has fallen behind in several key indicators, including capital productivity, labor productivity, multifactor productivity, GDP per capita, and investment expenditure. R&D expenditure as a percentage of GDP was the only indicator of increase.
productivity pressure
Capital productivity declined by 1.3%, labor productivity by 0.7%, and multifactor productivity by 0.9%. GDP per capita also fell by 1.3%, and investment spending also fell by 3.5%.
Against this backdrop, this report presents AI as one of the few short-term levers that companies can potentially use to improve output and financial performance. It also suggests that the effects will not be automatic and will depend on how well organizations integrate technology into their daily operations.
“Research shows that AI is no longer theoretical. In fact, when deployed properly, it offers some practical means to improve productivity. Data shows that AI is already being used every day by businesses everywhere, but now it’s about how that intention translates into real, substantive growth,” said Andrew Fairgray, chief business officer at 2degrees.
Mr. Fairgray also pointed to the magnitude of the revenue disparity observed among small and medium-sized businesses.
“Any company would be happy if they could get even 10 percent of that $400,000 profit,” he said. “From a reliability perspective, try it out. And I emphasize that point. Don’t just use it, redesign how you use it and change the way you think about your business.”
investment shift
Spending on AI is rapidly increasing, especially among young companies. Organizations founded in the past two years are expected to allocate more than half of their technology budgets to AI by FY27, marking a notable shift in spending priorities.
Across the broader business base, AI currently accounts for 29% of technology spending, and that share is expected to rise to 34% over the next two years. This number suggests that even companies still in the early stages of adoption are setting aside a portion of their budget for AI-related tools and systems.
Deloitte New Zealand’s Deloitte Access Economics lead partner Riza van der Merwe said better outcomes depended on more than software purchases.
“Progress depends on being able to build mindsets, systems, and skills together. When all of this comes together, companies are in a much better position to turn AI into real productivity gains,” she said.
She added that operational discipline is just as important as technical ambition.
“For many organizations, the greatest benefit is not inventing new technology, but in making better use of what already exists. This means integrating AI into day-to-day operations, supported by the right infrastructure, processes and ways of working. Ambition alone is not enough. Without the right systems and capabilities, companies risk becoming stuck in experimentation rather than producing meaningful results,” she said.
The report’s conclusions were echoed by business leaders, especially small and medium-sized businesses, who often face tight budgets and reduced internal resources for technological change. For these companies, quantified evidence of financial impact can help inform spending decisions.
“It is invaluable to have the productivity benefits of AI quantified in such an accessible and actionable way. This report provides meaningful insights for small and medium-sized businesses, and 2degrees’ leadership in driving this effort creates a powerful platform for businesses to take confident and informed steps towards AI adoption.
“Resources like this make a huge difference as we work to improve both productivity and profitability,” said Business Canterbury chief executive Leanne Watson.
