Half of ANZ SMEs have yet to adopt AI

Despite the widespread hype around artificial intelligence, new research from Peninsula Group suggests that half of SMEs in Australia and New Zealand are not yet using the technology. The survey found that many SMEs in the two nations are avoiding adopting AI due in part to concerns around security risks, which were the top concern for 24% of Australian respondents and 26% of those from New Zealand.

Across the five markets covered by the research — Australia, New Zealand, Canada, Ireland and the UK — security risks were the top concern for 47% of employers, up from 30% from the same survey conducted last year. There have also been significant increases in concerns around reputational impact (+183%), risk of breaking the law (+183%), loss of intellectual property (+178%), and impact on work quality and productivity (+158%).

But although security risks are a concern for participants from Australia and New Zealand, SMEs from the markets were found to still be more likely to use AI than their counterparts in the other markets.

Behind security, Australian respondents indicated that they are most concerned about losing intellectual property and an increased margin of error. Australian respondents are three times more worried about loss of intellectual property than Canadian employers, the research found. By contrast, New Zealand respondents selected concerns around work quality and productivity as their second biggest worries with using the technology.

Globally, the survey found that only 10% of SMEs are regularly using AI in the workplace. For SMEs in Australia and New Zealand, the most popular use for AI is administrative tasks, selected by 18% and 19% of respondents respectively. Specific uses include creating meeting agendas, summarising resources, and drafting emails or other communications.

Meanwhile, although 47% of Australian and 52% of New Zealand respondents believe that people are irreplaceable in their business, 22% of respondents in both markets indicated that they believe AI will replace jobs at their company at some point.

AI is also perceived as having the potential to positively transform workplaces for roughly a third of respondents in the two markets. New Zealand respondents were more likely to believe that AI won’t replace traditional ways of working at 29%, compared to just 21% in Australia.

Peninsula ANZ and BrightHR ANZ CEO David Price said the findings show that small businesses in the markets have growing concerns about the risks of AI, especially in the wake of high-profile data breaches.

“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,” he said. “[But] 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.”

Price said AI developers will need to address the concerns over security, productivity and quality of output to ensure greater uptake of the technology among SMEs.

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