AI in Australia & New Zealand: What SMEs Really Need to Know for 2026

Artificial intelligence is no longer a futuristic idea, it’s here and now, reshaping how businesses operate in Australia and New Zealand. For small and medium-sized enterprises (SMEs), 2025 marks a tipping point where AI adoption is accelerating and delivering real benefits. A government tracker found that in early 2025, a growing number of SMEs reported positive outcomes from using AI, such as faster access to accurate data, improved marketing engagement, and better resource optimisation.

Yet many smaller firms are still playing catch-up, with adoption rates in micro-businesses (0–4 employees) around 33% compared to 82% in larger mid-market firms[2]. So what do SMEs really need to know to stay competitive in the AI era? AI adoption rates by business size in Australia (Q1 2025). Smaller businesses lag significantly behind larger firms in implementing AI .

AI Adoption Is Becoming Mainstream (Don’t Get Left Behind)

Across Australia and New Zealand, AI is quickly moving from hype to an everyday business tool. Over 60% of Australian SMEs are now either using or planning to use AI, according to recent surveys[3]. New Zealand firms have been slower to adopt in 2024; 68% of NZ SMEs had no plans for AI, but awareness is rising as success stories emerge.

The key message is that AI is increasingly seen not as a gimmick, but as a driver of core business value. Companies already on board are reaping efficiency gains and new capabilities, while those that delay risk falling behind more tech-savvy competitors. Larger organisations are leading the way, especially in sectors like retail and healthcare. In Australia, retail trade and health/education are the most AI-active industries, with nearly half of businesses using AI. In contrast, sectors like construction and manufacturing still have low uptake (only 30% adopting) and a high rate of “not aware” respondents.

This gap points to a knowledge and skills deficit that SMEs need to bridge. Simply put, AI is becoming a mainstream business practice, and even smaller companies must start exploring where it fits in their strategy. The good news is that many AI tools are now more accessible and affordable than ever, thanks to cloud services and user-friendly apps.

Focus on Practical Use Cases & Quick Wins

What SMEs Should Actually Do With AI?

The most successful adopters focus on practical use cases tied to business goals, rather than tech for tech’s sake. In fact, the top AI applications in businesses are in everyday operational areas: document processing and data entry automation, generative AI assistants (such as chatbots or content generators), fraud detection, predictive analytics, and marketing automation.

These are mature use cases that deliver quick wins. For example, automating invoice data entry or customer inquiries can save precious staff hours, while AI-driven analytics can help a small retailer forecast demand more accurately.

SMEs should start by identifying pain points or repetitive tasks in their operations where AI tools could help. Some high-impact, accessible use cases for 2025 include:

• Customer service automation: Deploy chatbots or AI assistants to handle common inquiries, bookings, or support requests 24/7, improving response times without needing a large team.
• Marketing and sales support: Use AI to personalise email campaigns, recommend products, or analyse customer feedback. Over 20% of businesses are already using AI for marketing automation to boost engagement[8].
• Document and admin tasks: Tools that leverage AI (including generative AI like ChatGPT) can draft emails, create reports, or pull insights from documents in seconds. Document processing is a top AI use case (27% adoption), think automated form filing or contract analysis[9].
• Predictive analytics: Even a small manufacturer or service company can use AI to forecast trends, from inventory needs to seasonal demand, using their existing data. This helps in proactive decision-making rather than reacting late.
• Fraud and security monitoring: AI can flag abnormal transactions or security threats faster than humans. SMEs handling payments or sensitive data can deploy AI-based fraud detection to enhance protection.

By focusing on such practical applications, SMEs can start small, demonstrate value, and build confidence in AI. Remember, it’s not about jumping to sci-fi levels of automation overnight; it’s about incremental improvements that save time, cut costs, or increase revenue.

Overcoming Barriers: Skills, Budget, and Trust

Of course, adopting AI isn’t without challenges, especially for smaller businesses with limited resources. Common hurdles include the rapid pace of technological change, a lack of in-house AI expertise, and funding constraints for new initiatives. Many business owners worry about the cost of AI or whether they have the right data. The key is to start with manageable projects and leverage external resources. Cloud AI services (from providers like AWS, Google, or Microsoft) allow you to rent AI capabilities on a pay-as-you-go model, with no big upfront investment in infrastructure.

Likewise, there’s a growing ecosystem of local IT partners and consultants in ANZ who specialise in helping SMEs implement AI solutions affordably. Building AI literacy is vital. If your team lacks AI experience, consider basic training for key staff or hiring a part-time specialist/consultant to guide early efforts.

The Australian government, through the National AI Centre (NAIC), offers free guidance and tools for businesses starting with AI, including an AI Adoption Toolkit and AI policy templates. Such resources can help SMEs plan their approach without reinventing the wheel.

Another barrier is trust and change management. Employees might be nervous about AI or unclear on how to use it. It’s important to communicate that AI is there to augment staff, not replace them.

In fact, companies that succeed with AI tend to invest heavily in training people and managing the change, recognising that 70% of AI success comes down to people and processes, not just the tech itself. Get your team involved early, address their concerns, and celebrate quick wins to build buy-in.

Finally, SMEs should be mindful of data privacy and ethics from the get-go. Make sure you handle customer data responsibly when using AI tools (especially if using cloud services). In New Zealand and Australia, privacy laws still apply for instance, avoid uploading personal client information to free AI tools. Starting with a responsible approach will build trust with your customers and prepare you for any future regulations.

The Bottom Line for SMEs

AI can seem daunting, but in 2025, it has truly become a small-business-friendly technology. Many SMEs across ANZ are already seeing tangible benefits from faster decision-making and new revenue streams by adopting AI in smart, targeted ways.

The playing field is also levelling, you don’t need a massive IT department or PhD data scientists to get started. With the right focus on practical use cases, a bit of outside help, and a commitment to learning, even the leanest Kiwi startup or Aussie family business can start leveraging AI tools that were science fiction a few years ago.

The takeaway? Don’t sit on the sidelines. Begin by educating yourself and your team, pick one or two areas where AI could solve a real business problem, and run a pilot. Use the free guidance and communities available, for example, Australia’s NAIC or the AI Forum NZ, to learn from others’ experiences. By taking these first steps, SMEs will not only boost their productivity and innovation today but also future-proof their business for the more AI-driven economy of tomorrow.

Ready to kick-start your AI journey? Contact iClick’s team for a personalised consultation on how your SME can implement AI in a sensible, cost-effective way. We’ll help you navigate the options and set you on a path to success in the new AI-powered era.