The Big Smoke unpacks why small businesses are still skeptical about AI, despite the hype, and how SMEs can navigate the AI landscape.
AI is the word on everyone’s lips. The current darling of our tech-centric world, AI tools and capabilities are transforming the way we work, reducing administrative burdens and streamlining operations. Since the AI boom around 2020, big businesses have been throwing their weight behind it, quickly integrating AI tech into their day-to-day, but many small-to-medium-sized enterprises are flagging their relationship with AI as “it’s complicated”.
New data is showing that despite all the buzz about AI revolutionizing everything from customer service to supply chains, 50% of Aussie and Kiwi SMEs still aren’t ready to swipe right and take the plunge. It’s not that SMEs are completely opposed to AI. In fact, a 2024 survey from leading HR and health and safety provider, Peninsula Group, shows that about one in ten SMEs already use AI for simple administrative tasks – drafting emails, creating meeting agendas, summarizing documents etc. However, this still leaves a substantial number of businesses hesitant to make AI a core part of their operations. So why is there such a gap in the uptake between big biz and SMEs?
The Fear Factor: Security and IP Concerns
One of the major reasons SMEs are holding back is fear. Security risks topped the list of concerns, with 24% of Australian and 26% of New Zealand businesses understandably cautious, especially given the rising number of high-profile cyber breaches and the somewhat wild and uncharted territory of emerging AI privacy regulations.
Australian SMEs are also twice—and even three times—as concerned about intellectual property theft compared to their counterparts in Ireland, the UK, and Canada, respectively. According to Peninsula Group’s findings, these small businesses’ concerns stem from the potential risks involved in sharing sensitive data with third-party AI tools, which many fear could lead to catastrophic breaches.
David Price, CEO at Peninsula ANZ and BrightHR ANZ shared, “Given Australia’s vulnerability, it’s no surprise that small businesses are wary of sharing data with third parties, which is a prerequisite for most AI tools.
“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.”
Cost and General Skepticism
Beyond security, cost is a critical factor holding SMEs back. Implementing AI technologies can be exy, and for small businesses with a close watch on the purse strings, the return on investment isn’t always clear, especially if their people aren’t trained in AI. Even when it comes to automating tasks, business owners remain skeptical about whether AI’s benefits truly outweigh the investment.
There’s also a fair bit of skepticism about whether AI really delivers on its promises. Despite all the hype, 53% of New Zealand SMEs and 47% of Australian SMEs are adamant that people will always be irreplaceable in their businesses. While many feel that while AI can help with some tasks, they don’t feel it will transform their business in the same way it might for larger corporations with more complex needs.
The Inevitable Truth: AI Will Shape the Future of SMEs
While all these fears are understandable, one thing is for sure – AI isn’t going anywhere and those who shy away from AI may well get left behind. Even SMEs who aren’t ready to dive headfirst into AI are certainly eyeing the pool, with 32% of Australian and 33% of New Zealand SMEs acknowledging that AI could positively transform their workplace.
With AI’s ability to reduce costs and boost productivity, it’s simply too convenient to ignore forever. As the cost of doing business continues to rise, SMEs are under more pressure to cut overheads and streamline their operations. Whether through automating routine tasks or helping with data analysis, AI offers a compelling way to achieve just that.
So What’s an SME To Do?
Let’s be clear: the security concerns around AI are valid. Intellectual property theft, data breaches – these risks are real, and they won’t be solved overnight. But with the right strategies, they can be managed. AI developers are already working to tighten security features, providing businesses with more control over their data.
Our advice for SMEs? Find the balance. Acknowledge the risks, but don’t let them blind you to AI’s potential. AI has the power to streamline your operations, cut costs, and give you a competitive edge. Stay informed with the latest AI tools and developments and look for potential integrations that align with your company’s values and internal processes.
Do You See AI in Your Future?
Despite the hesitation when it comes to AI adoption, SMEs in Australia and New Zealand are actually ahead of the curve in AI adoption compared to SMEs in the UK, Ireland, and Canada. Many businesses might not be ready to make the leap into full-scale AI integration just yet, but they’re certainly warming up to the idea.
If you keep swiping left on AI but can’t shake your curiosity, why not have a chat with The Big Smoke team? We love helping SMEs explore the possibilities of AI, guiding you through both the opportunities and the challenges, so you can make the right call for your business. You might find that you’re simply waiting for the right AI tool to come along – and who knows, it could end up being the business partner you never knew you needed.
