Decidr has released its inaugural National AI Readiness Index Report 2025, revealing a disconnect between small and medium enterprises’ urgency around artificial intelligence and their lack of clear planning.
The study, conducted with insights consultancy Nature, surveyed 1,042 decision-makers at Australian businesses with 20 to 500 employees. It found that while 83 per cent of SMEs believe AI will significantly impact their business within the next year, 76 per cent have not developed a formal AI strategy or roadmap.
According to David Brudenell, Executive Director at Decidr, “Almost 70% of SME decision makers believe they understand the AI capabilities required to develop or maintain a competitive advantage, but this data shows actual choices being made reflect a fundamental misunderstanding of how value can be delivered from AI.”
Although 92 per cent of SMEs are using platforms such as ChatGPT and Microsoft Copilot, only 19 per cent have adopted advanced AI systems capable of delivering business transformation or revenue growth.
Efficiency over growth
Budget limitations (28 per cent) and security concerns (29 per cent) were the top barriers to broader AI adoption. Most SMEs are prioritising efficiency (57 per cent) over growth (25 per cent), with AI decisions largely centred on cost-cutting rather than innovation or competitiveness.
Marketing and customer support are the top areas expected to benefit from AI (46 per cent each), while HR lags behind at 27 per cent. Confidence remains low overall, with only 39 per cent of respondents feeling assured in their ability to implement AI across their business.
SMEs stuck in ‘the shallow end’
The report categorises SMEs into four readiness segments:
• Trailblazers (17%): Growth-oriented adopters with clear strategic focus.
• White knucklers (24%): Those grappling with urgency but hindered by implementation complexity.
• Tinkerers (36%): Experimenters with no coordinated leadership approach.
• Sleepwalkers (23%): Businesses with limited AI exposure, mostly in natural resources and public services.
Trailblazers and White knucklers showed the highest readiness for strategic tools, with 48 per cent and 39 per cent respectively indicating they would immediately implement an integrated AI system if available.
“Too many businesses are treating AI as an expense to manage rather than an engine for growth,” Brudenell said. “Only 25% cite competitive pressure as an AI driver at all. Many businesses don’t realise their competitors might already be pulling ahead through smarter AI strategies.”
About the study
The research was conducted from 19 May to 4 June 2025 and results were weighted to reflect Australian Bureau of Statistics data on business size, industry, and location. The report forms part of Decidr’s push to promote strategic, integrated AI that complements existing business systems.
Top image: David Brudenell, Executive Director, Decidr