title: "Is Your Business Falling Behind on AI? What Deloitte's 2026 Report Means for Australian Businesses" slug: deloitte-2026-ai-report-australian-smbs date: 2026-02-14 author: Flowtivity description: "Deloitte's 2026 State of AI report reveals Australian businesses are lagging behind global peers. Here's what it means for growing businesses — and what you can do about it this week." keywords: - deloitte ai report 2026 - australian businesses ai - ai adoption australia - state of ai enterprise australia - ai for small business australia - agentic ai australia schema: FAQPage
Is Your Business Falling Behind on AI? What Deloitte's 2026 Report Means for Australian Businesses
Key Takeaways
Deloitte's 2026 State of AI in the Enterprise report paints a confronting picture for Australian businesses. While 78% of respondents see AI as the defining technology trend of 2026, 72% of Australian organisations are still stuck in pilot mode — tinkering with AI experiments that never reach production. Only 28% have moved more than 40% of their AI pilots into real, operational use. One-third are merely automating existing processes rather than transforming how they work. Over half cite talent gaps as a major barrier. For growing businesses watching from the sidelines, the message is clear: the window to act is closing. Enterprise is struggling — and if you don't have a plan, you're already behind.
The Headline: Australia Is Falling Behind
On 12 February 2026, Deloitte released its latest State of AI in the Enterprise report, subtitled The Untapped Edge. The subtitle tells you everything you need to know — there's an edge to be gained from AI, and most Australian organisations aren't gaining it.
The numbers are stark:
- 78% of Australian respondents now see AI and machine learning as the defining technology trend of 2026, up from 67% last year.
- 61% say AI already improves efficiency and productivity in their organisations.
- Yet only 28% have moved more than 40% of their AI pilots into production.
- One-third are still focused on automating existing processes — minor tweaks, not meaningful transformation.
As Stuart Scotis, Deloitte's National Leader for Technology, put it bluntly:
"Australian organisations are still trailing global peers… leaders need to move beyond incremental improvements."
This isn't a future problem. It's happening right now. And while the report focuses on enterprise — the big end of town with dedicated AI teams and seven-figure budgets — the implications for growing businesses are arguably even more significant.
Let's break it down.
The Pilot-to-Production Gap
Here's the stat that should keep every business owner up at night: 72% of Australian businesses haven't moved the majority of their AI experiments into production.
What does that mean in plain English? It means most organisations have tried AI. They've run a chatbot trial. They've tested an AI tool for scheduling or data entry. Maybe they've built a proof-of-concept with a consultant. But then… nothing. The pilot sits in a folder somewhere. The trial ends. Everyone goes back to doing things the old way.
Deloitte found that 57% of Australian respondents expect to reach meaningful production levels within three to six months. But expectation and execution are very different things. David Alonso, Deloitte Australia's AI Market Leader, nailed it:
"AI has moved beyond experimentation… Australian leaders who pull ahead will move decisively from pilot to production."
The key word there is decisively. Not cautiously. Not eventually. Decisively.
Why This Matters Even More for growing businesses
If a multinational corporation with a dedicated AI division and a multi-million-dollar technology budget is struggling to move from pilot to production, what chance does a 15-person accounting firm in Parramatta have? Or a trades business in Geelong? Or a retail chain with six stores across Brisbane?
The honest answer: not much — if they try to do it alone.
Enterprise has the luxury of slow experimentation. They can afford to run a pilot for 18 months, learn nothing actionable, and write it off. growing businesses can't. Every dollar counts. Every hour spent on a failed experiment is an hour not spent on revenue.
But here's the flip side: growing businesses can actually move faster than enterprise. You don't have a 12-person procurement committee. You don't need board approval to trial a new tool. You can make a decision on Monday and have something running by Friday.
The pilot-to-production gap isn't about capability. It's about decision-making speed and having the right guidance. That's where many growing businesses have a structural advantage — they just don't know it yet.
The "Productivity Trap"
One of the most revealing findings in the Deloitte report is that one-third of Australian organisations are still focused on automating existing processes. They're using AI to do what they already do, just slightly faster.
On the surface, that sounds reasonable. Automating data entry saves time. Using AI to sort emails saves mental energy. Generating reports automatically instead of manually — that's useful.
But it's a trap.
Here's why: if you're using AI to speed up a broken process, you now have a faster broken process. You haven't transformed anything. You've just made your inefficiency more efficient.
The real opportunity isn't automation. It's reimagination.
Consider the difference:
Automation: Using AI to transcribe meeting notes faster.
Reimagination: Using AI to eliminate unnecessary meetings entirely by summarising async updates and flagging only the decisions that need human input.
Automation: Using AI to sort incoming customer enquiries into categories.
Reimagination: Using an AI agent to handle 80% of those enquiries autonomously, escalating only the complex ones to your team.
Automation: Using AI to generate invoices from templates.
Reimagination: Using AI to manage your entire accounts receivable workflow — from sending invoices, to following up on late payments, to reconciling accounts — with human oversight but not human labour.
The Deloitte report is essentially saying that most Australian businesses are stuck in column one. They're automating. They're not reimagining.
For growing businesses, this is actually good news. You don't have legacy systems worth millions that you need to protect. You don't have entrenched processes defended by middle management. You can leapfrog straight to reimagination — if someone shows you how.
The Skills Gap Is Real (But Not What You Think)
Over 50% of Australian respondents in the Deloitte report cite talent and skills gaps as a significant barrier to AI adoption. Another 42% point to cost hurdles and issues with technology and data availability.
When enterprise leaders talk about "skills gaps," they mean they can't hire enough machine learning engineers, data scientists, and AI product managers. They're competing with Google, Microsoft, and the wave of AI startups (Anthropic just raised $30 billion at a $380 billion valuation; Newo raised $25 million just for AI receptionists). The talent war is real and it's brutal.
But for growing businesses, the skills gap means something completely different. You don't need to hire a data scientist. You probably never will. What you need is:
- Someone who understands your business well enough to identify where AI creates real value.
- Someone who understands AI well enough to implement it properly — not just throw ChatGPT at everything.
- Someone who can bridge the gap between what the technology can do and what your business actually needs.
That's not an employee. That's a partner.
The Tech Council of Australia warned just days ago (11 February, via the Australian Financial Review) that the government must work with industry to address AI's workforce impact. The skills conversation is happening at every level — federal policy, enterprise boardrooms, and around the kitchen tables of small business owners wondering if they should be worried.
You should be paying attention. But you shouldn't be panicking. You don't need to become an AI expert. You need access to one.
What This Means for growing businesses
Let's be direct: reports like Deloitte's State of AI in the Enterprise aren't written for growing businesses. They're written for CIOs and CTOs at companies with thousands of employees. The language is enterprise. The budgets are enterprise. The recommendations are enterprise.
But the underlying trends affect everyone.
If the large companies in your industry are adopting AI — even clumsily — they're building capabilities that will eventually become competitive advantages. They'll serve customers faster. They'll operate more cheaply. They'll make better decisions with better data.
And when that happens, the growing businesses that didn't act will feel it.
You might not feel it today. Your regulars still call you. Your pipeline still has work in it. Business is fine.
But "fine" is the most dangerous word in business. "Fine" is what Blockbuster said in 2008. "Fine" is what taxi companies said in 2013.
Here's the reality for a 20-person business in Australia right now:
- You don't have an AI strategy. That's okay. Most of your competitors don't either.
- You've probably tried one or two AI tools. Maybe Canva's AI features, or ChatGPT for writing emails. Maybe an AI accounting add-on.
- You haven't connected the dots. Those individual tools aren't a strategy. They're experiments. And as Deloitte's data shows, experiments without a path to production are just expensive distractions.
The gap between "knowing AI matters" and "actually doing something about it" is where most Australian Businesses are sitting right now. Bridging that gap is exactly what Flowtivity exists to do.
We don't sell software. We don't build AI models. We work with growing businesses to figure out where AI fits, implement it properly, and make sure it actually gets used — not just trialled and forgotten.
Five Things Australian Businesses Can Do This Week
You don't need a six-month roadmap to start. Here are five concrete actions you can take in the next seven days:
1. Run an AI Readiness Audit on Your Current Workflows
Grab a whiteboard (or a Google Doc) and list every repeatable process in your business. Customer enquiries. Invoicing. Quoting. Scheduling. Follow-ups. Reporting. Social media. Recruitment.
Now mark each one: manual, semi-automated, or fully automated. Be honest. If someone is copy-pasting data between spreadsheets, that's manual — even if there's a computer involved.
This gives you a map of where AI could make a real difference.
2. Pick ONE Process to Automate (Not Five)
The biggest mistake growing businesses make with AI is trying to do everything at once. Pick the process that is:
- High-volume (happens often)
- Low-complexity (doesn't require deep human judgement)
- High-friction (currently slow, annoying, or error-prone)
That's your starting point. One process. One win. Build from there.
3. Talk to an AI Consultant (Not a Software Vendor)
Software vendors will sell you their tool whether it fits or not. A consultant will tell you what you actually need — and sometimes the answer is "not yet" or "not that."
Look for someone who asks about your business first and talks about technology second. If the first conversation is about features and pricing, you're talking to a salesperson, not an adviser.
4. Set a 90-Day Pilot-to-Production Deadline
Remember, 72% of Australian businesses are stuck in pilot mode. Don't join them. Whatever you trial, set a hard deadline: 90 days to production or kill it.
That means clear success criteria upfront. What does "working" look like? If the pilot doesn't meet that bar in 90 days, it's not the right solution. Move on.
5. Budget for AI Like You Budget for Accounting Software
AI isn't free, but it doesn't have to break the bank either. For most growing businesses, meaningful AI implementation costs somewhere between $500 and $2,000 per month — roughly what you'd pay for decent accounting software, a CRM, or a part-time admin.
The difference is the return. A well-implemented AI workflow can save 10–20 hours per week across a small team. Do the maths on what those hours are worth.
The Agentic AI Opportunity
One of the most significant findings buried in the Deloitte report is about agentic AI — AI systems that don't just analyse or recommend, but actually act. Think AI agents that can book appointments, follow up on leads, process applications, or manage customer service conversations without human intervention.
Deloitte found that only 22% of Australian organisations have a highly advanced model for governing these autonomous agents. Dr Elea Wurth, Deloitte's Trustworthy AI leader, warned:
"When systems can decide and act, organisations must embed real risk management."
She's right. Governance matters. But for growing businesses, the agentic AI opportunity is enormous — precisely because you're small enough to implement it responsibly.
At Flowtivity, we run our own AI agent that manages parts of our sales pipeline autonomously. It handles initial outreach, qualifies leads, books meetings, and follows up — all without a human pressing buttons. It's not science fiction. It's running right now, today, for an Australian small business.
The governance question for growing businesses is simpler than for enterprise. You don't need a 50-page AI policy. You need clear rules: what can the agent do, what requires human approval, and what's off-limits. A few hours of thoughtful planning. That's it.
Agentic AI is where the real productivity transformation happens. Not automating what exists — delegating what you shouldn't be doing yourself to an AI that never sleeps, never forgets, and costs less than a junior hire.
The fact that 72% of Australian organisations factor country of origin into their AI vendor selection (the sovereign AI trend) only reinforces this: businesses want AI they can trust, built and governed locally. That's a natural fit for Australian consultancies working with Australian Businesses.
Frequently Asked Questions
What does Deloitte's 2026 AI report say about Australian businesses?
Deloitte's 2026 State of AI in the Enterprise report found that Australian organisations are investing in AI but lagging behind global peers in moving from experimentation to production. Only 28% have moved more than 40% of AI pilots into production, and one-third are still focused on automating existing processes rather than transforming workflows. Over half cite talent and skills gaps as a significant barrier to AI adoption.
How much should a small business budget for AI in Australia?
For most Australian Businesses, meaningful AI implementation costs between $500 and $2,000 per month — comparable to accounting software or a CRM subscription. This can cover AI tools, platform subscriptions, and consulting support. The return typically comes from saving 10–20 hours per week across your team on repetitive tasks.
What is agentic AI and why does it matter for small businesses?
Agentic AI refers to AI systems that can act autonomously — not just analyse data, but make decisions and execute tasks like booking appointments, following up on leads, or managing customer enquiries. For small businesses, agentic AI is a game-changer because it can handle work that would otherwise require hiring additional staff, at a fraction of the cost.
Why are Australian businesses falling behind on AI adoption?
According to Deloitte, the main barriers are talent and skills gaps (cited by over 50% of respondents), cost hurdles and tech/data availability (42%), and a tendency to use AI for incremental automation rather than genuine transformation. Many organisations run AI pilots but never move them into production — 72% of Australian businesses are stuck in this pilot phase.
How can an growing business move from AI experimentation to production?
Start by auditing your workflows to identify where AI can add the most value. Pick one high-volume, low-complexity process to automate first. Set a strict 90-day deadline to move from pilot to production with clear success criteria. Work with an AI consultant rather than a software vendor to ensure the solution fits your business. Budget $500–$2,000 per month and treat AI as an ongoing operational expense, not a one-off project.
Don't Wait for the 2027 Report
The data is in. Australian businesses are falling behind on AI. The pilot-to-production gap is real. The skills gap is real. And the opportunity cost of inaction grows every quarter.
But here's what the Deloitte report won't tell you: you don't need to be an enterprise to win with AI. You need clarity, a plan, and someone who can actually make it happen.
That's what Flowtivity does. We work with Australian growing businesses to cut through the noise, identify real AI opportunities, and implement solutions that go live — not into a drawer.
Don't wait for the 2027 report to tell you what you missed.