Australian small and medium-sized businesses are leaning on ageing devices and patchy connections to run everything from payments to client communication, and it is costing them real money. A recent nationwide study commissioned by a major telecom provider and conducted by a research firm suggests these tech troubles are stripping around $3.75bn a year from the SME sector. That is happening at the same time as large corporates double down on artificial intelligence, cut jobs and modernise their systems, which widens the digital gap between big business and everyone else.
Across more than 300 small and medium enterprises surveyed, almost 9 in 10 said they had spent hours in just the last month wrestling with IT issues instead of serving customers or building their business. Around three-quarters reported losing work due to dropped connections or frozen computers and 7 in 10 had to waste time resetting important passwords. On average, unreliable tech cost each business about $3,800 over the last financial year, mostly through lost time, missed sales and operational delays. Many owners are putting off upgrades because of tight budgets or simple inertia, which leaves devices and infrastructure that can be five years old or more trying to run today’s cloud apps and contactless tools, often at a frustrating crawl.
The survey even uncovered how far people are pushing to stay productive, with about 1 in 10 respondents admitting they sometimes work from the toilet to keep things moving. All of this plays out against a national backdrop where productivity growth is already under pressure. Economic forecasts now push expectations for a return to trend productivity growth out towards the next decade, with demographic shifts such as higher net migration, lower fertility and changing workforce participation all weighing on GDP and government revenue. In that environment, the hidden drag from sluggish tech in smaller firms looks like another headwind the economy cannot ignore.
Yet the mood among business owners is not purely bleak. Roughly half of the surveyed SMEs say their current systems are too basic to support their growth plans through to 2026 but more than three-quarters still expect their business to expand over the next year. That optimism seems to line up with a growing willingness to explore newer tools, including artificial intelligence, not as job killers but as practical helpers that boost efficiency. Some professional and consulting businesses are already using AI to handle complex analysis or forecasting, and they treat it as a way to get most of the work done quickly and then layer in human judgement at the end. If that attitude spreads, it looks like smaller firms could gradually close the tech gap with larger enterprises and turn today’s costly IT headaches into tomorrow’s competitive advantage, though it is still unclear whether that shift will happen fast enough to lift national productivity.
