A global survey conducted by Peninsula Group in August 2024 revealed that half of small and medium-sized enterprises (SMEs) in Australia and New Zealand have yet to adopt artificial intelligence (AI) despite its rising popularity.

The survey, which covered five countries—Australia, New Zealand, Canada, Ireland, and the United Kingdom—also highlighted security risks as a major concern for AI adoption. About 24% of respondents in Australia and 26% in New Zealand cited security risks as their top concern.

Globally, nearly half (47%) of employers surveyed identified security risks as their top concern regarding AI in the workplace, marking a sharp rise from 30% the previous year.

Other concerns, such as potential reputational damage, legal risks, loss of intellectual property, and the effect on work quality and productivity, have also seen significant year-on-year increases.

David Price, CEO at Peninsula ANZ and BrightHR ANZ says AI offers immense potential to boost productivity and streamline processes, concerns about its risks are growing, especially in the wake of high-profile cyber breaches.

“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,” says Price.

Despite expressing significant concerns about security risks, the 484 Australian and New Zealand participants were still more likely to regularly use AI compared to SMEs in Canada, Ireland, and the UK.

In Australia, the risk of losing intellectual property and an increased margin of error were tied as the second most significant concerns. Meanwhile, New Zealand respondents were more focused on the potential impact of AI on work quality and productivity.

Australian employers were found to be twice as concerned about intellectual property loss as their counterparts in Ireland and the UK, and three times more worried than Canadian employers.

“It’s clear that while small businesses are slowly testing the waters with AI adoption, their concerns around its risks are preventing them from fully embracing these new technologies,” Price explained.

AI usage remains relatively low among small and medium-sized businesses globally. Despite a 50% increase over the past year, only one in ten SMEs reported using AI regularly in their operations.

The survey also revealed that the most common AI application for small businesses in Australia (18%) and New Zealand (19%) was for administrative tasks, such as creating meeting agendas, summarizing documents, and drafting emails or communications.

About half of the respondents in Australia (47%) and New Zealand (53%) affirmed that people remain irreplaceable within their businesses. However, nearly a quarter (22% in both countries) believed that AI would eventually replace some jobs in their company.

Around a third of respondents in Australia (32%) and New Zealand (33%) viewed AI as having the potential to positively transform workplaces.

New Zealand participants were more likely to believe that while AI is useful, it wouldn’t replace traditional work methods, with 29% holding this view compared to 21% of Australians.