The country is at a critical point for its tech future. As the global shift towards artificial intelligence accelerates, new reports show that poor digital capabilities are limiting Australia's economic potential. A widening gap in tech literacy and business readiness is making the situation worse, particularly within the small-to-medium business (SMB) sector, which plays a vital role in the national economy.
Two industry reports highlight the size of the challenge. One report, commissioned by a major tech company, finds that widespread adoption of AI by SMBs could add $44 billion a year to GDP. These businesses account for 60% of company profits and over half of private sector GDP, but fewer than one in 20 are making full use of the technology. Many use AI in isolated and uncoordinated ways, missing out on possible profit increases of over 100%.
This delay in adopting AI is made worse by ongoing workforce issues. The national tech sector has shrunk for the first time since 2020, losing more than 30,000 jobs over the past year. Total employment remains far below the government's 2030 target. There is also a significant skills gap, with nearly six in ten Australians saying they do not feel digitally literate, even though most are keen to improve. Without immediate action, this lack of skills could limit innovation, reduce productivity and deepen inequality by locking people out of the AI economy.
The drive for change is about more than money. It is also about representation and confidence. Industry leaders are stressing the need to boost diversity in tech to ensure that AI systems work for all. Currently, women are under-represented in AI and digital professions. Supporting Australians from all backgrounds to engage with and build these technologies could help close the gaps in both the workforce and social equity.
