According to NAB Economics, 42% of Australian small and medium-sized businesses are using artificial intelligence, demonstrating the penetration of artificial intelligence beyond large enterprises.
According to the survey, an additional 14% of small businesses plan to implement AI, and 44% are not using AI. With more than 98% of Australian businesses falling into the small and medium-sized business category, small business adoption could determine the adoption of AI across the economy.
Data suggests that the use of AI is focused on routine business tasks rather than specialized applications. Among small businesses already using this technology, the most common area is marketing and sales (51%), followed by operations and logistics (39%) and customer service (25%).
NAB says this pattern shows that small and medium-sized enterprises are moving from experimenting with AI to incorporating it into their daily operations, driven by time savings, reduced administrative burden, and decision support.
Adoption remains uneven across industries. Real estate services topped the list at 69%, followed by finance and insurance at 65% and business services at 61%.
Meanwhile, retail trade is 22%, transportation and storage is 21%, and manufacturing is 35%. This gap reflects the differing levels of familiarity, use cases and readiness between sectors that make up large parts of the Australian economy.
Pete Steele, group executive for digital, data and AI at NAB, said the findings showed that AI was becoming a practical tool for small and medium-sized enterprises.
“We are seeing a clear shift from curiosity to practicality, with more companies using AI to save time, reduce administrative burden, and make better decisions,” Steele said.
He said widespread adoption could have an impact beyond individual companies.
“Unleashing this adoption at scale across the economy has real potential to help improve Australia’s productivity and increase its global competitiveness. Australians have long proven to be early adopters of technology, and this research shows that mindset in action. Rather than fearing AI, they are embracing it.”
“The opportunity now is to help more businesses safely and confidently deploy this technology, which can often feel complex and uncertain. Whether it’s a bakery managing orders, a winery predicting demand, or a restaurant cutting back on admin, this technology can deliver real benefits to businesses and the wider Australian economy.”
“It is encouraging to see the government supporting this growing demand, including through the National AI Center’s ‘AI Adopt’ and ‘Digital Solutions’ programmes, which provide tailored advice to help businesses improve their productivity.”
case study
The study also includes examples of small and medium-sized enterprises using AI for operational and financial operations. Their experiences reflect recurring themes in our findings. That is, owners are looking for practical benefits rather than novelty.
Tim Gauci, owner of Design and Diplomacy, said his skepticism led him to regularly use AI tools for financial analysis, estimating, and onboarding.
“I took the time to understand what AI is and how to properly use it within my business, and the results really paid off,” Gauci said. “If you want more free time, you need to get creative with how you use it. It doesn’t take much.”
Andrew Blair, director of Bella Manufacturing, described a similar shift after initially viewing AI as something for highly skilled users. He said the hands-on workshops helped him start with small applications and address privacy and security concerns.
“We’re leveraging AI across marketing, sales, operations and logistics,” Blair said. “The real value is not the technology; it’s the time that technology gives back.”
Emphasis on productivity
The emphasis on time savings is notable, as it suggests that small businesses are evaluating AI operationally. For many owner-managed businesses, reducing time spent on repetitive tasks can impact staffing, customer response times, and the time owners have for business development and personal commitments.
This also explains why administrative tasks, marketing, and decision support emerged as early use cases. These are capabilities where small businesses often have limited in-house resources and where relatively simple tools can have an immediate impact on workflow.
The findings come as policymakers and industry bodies continue to focus on Australia’s productivity performance. If the use of AI expands from early adopters to a broader range of small businesses, the overall impact could be significant given the size of the sector in terms of employment and number of businesses.
Still, this figure shows that a significant share of the market is still untouched by this technology. Nearly half of SMBs are not using AI, suggesting that concerns about complexity, trust, skills, and implementation continue to hinder adoption.
For banks, advisors, and public sector programs, there remains a large audience seeking practical guidance on where AI can be applied and how to manage privacy and security risks. For small business owners, this study points to a simpler calculation: Does technology save enough time to justify the effort to learn how to use it?
“The real value is not the technology; it’s the time it takes to give back,” Blair said.
