Mid-Sized SMEs Set to Leapfrog Larger Competitors in AI-Driven Growth Revolution
Humanova
SYDNEY, 10 April 2025 – Australian mid-sized businesses are not just adopting AI faster than their larger counterparts – they're laying the groundwork for exponential growth that could soon see them outpace larger competitors, according to new research released today by consulting firm specialising in the future of work, Humanova.
The national study of 1,001 knowledge workers reveals that mid-sized SMEs (50-99 employees) have the highest proportion of AI "power users" – employees who use generative AI daily and drive organisational transformation – creating a competitive advantage that threatens to become insurmountable as AI capabilities compound.
"Power users signal an organisation's AI maturity and provide a window into the future of work," says Dr. Sean Gallagher, founder of Humanova and author of the report. "What's surprising is that mid-sized SMEs have 35% of their workforce as power users, versus just 25% across larger SMEs. It's not the large corporations leading the charge, but agile mid-sized businesses that are showing us the future of work."
Leading by doing
Mid-sized SMEs' advantage stems from their leadership approach. Not only are decision-makers in mid-sized SMEs more likely to be power users (68%) compared to 46% in larger SMEs (100-199 employees), but this is also significantly higher than AI adoption at the executive level in large corporations. McKinsey reports that only 39% of executives of large companies in the Asia-Pacific 'regularly use GenAI for work'.
This hands-on leadership, combined with flatter, more empowered organisational structures, gives mid-sized businesses unique advantages in capitalising on AI. With 41% of knowledge workers in decision-making roles (versus 30% in larger firms), these organisations demonstrate more agile, responsive approaches to technology adoption.
The research identifies three key insights for all business leaders:
- Organisational agility plus governance drives success – Mid-sized SMEs leverage structural advantages like engaged leadership and flatter hierarchies, combined with effective AI governance including strategic clarity and formal training programs to accelerate AI adoption and achieve superior results.
- AI transforms from cost-saving to capacity multiplier – Power users save up to a full day weekly on routine tasks, effectively increasing organisational capacity by 20% without additional headcount.
- The window for competitive advantage is closing – With less than 12% of Australian SMEs having formal AI training or clear strategies, first-movers still have opportunities to differentiate before AI agents emerge.
Liam Lenaghan, Founder and Managing Director of GO.FARM, a $1.3 billion agricultural investment firm featured in the report, confirms the findings. "The adoption of AI is something businesses need to embrace to maintain a competitive advantage. We've seen a productivity unlock, and for many of our team, this has meant more focus on high-value outputs by simplifying administrative and basic operational tasks.”
Mr Lenaghan says, “Team satisfaction and engagement have increased as we devote more attention to high-value work and less to administrative tasks. That's allowing for sharper decision-making and greater efficiencies – and that's exactly what we need to deliver on our purpose and strategy."
The emergence of AI agents will widen the gap
"The emergence of AI agents in 2025 will dramatically reshape work," warns Dr. Gallagher. "Organisations developing workforce AI maturity now will be better positioned to implement these autonomous systems, while those who wait risk falling permanently behind as emerging 'AI-native' competitors establish new business models with AI at their core."
The report offers a practical three-phase framework for building AI capability: setting foundations through governance and infrastructure, making AI a team sport through collaborative learning and experimentation, and transforming talent systems to embed AI proficiency into organisational DNA.
Additional insights
The report also identifies five key business impacts that organisations with high proportions of AI power users are experiencing:
- Productivity: 20% increased workforce capacity through automation of routine tasks
- Value creation: 2x higher-value work output through advanced task application
- Adaptive capability: 40% more likely to evolve to higher-value work
- Wellbeing: Improved work-life balance through efficient task management
- Talent development: 66% knowledge sharing acceleration driving organisational learning
"This isn't just digital transformation," says Dr. Gallagher. "At its core, AI success is a talent strategy. The future belongs not to those with the most AI tools, but to those who build workforces of power users capable of reimagining work and harnessing AI’s full potential."
The full report "Breaking the Scale Barrier: Australian Mid-Sized SMEs Lead GenAI Transformation" is available from Humanova.
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Key Facts:
KEY FINDINGS:
- 35% of workers in mid-sized SMEs are AI power users, vs just 25% in larger firms and 11-26% in smaller ones (see figure below)
- 68% of mid-sized SME decision-makers actively use AI daily, vs 46% in larger SMEs and only 39% in large APAC corporations
- 41% of knowledge workers in mid-sized SMEs have decision-making roles, vs 30% in larger firms
About us:
About Humanova
Humanova partners with SME leaders to turn AI from a business challenge into competitive advantage. Founded by Dr. Sean Gallagher (image below), a leading authority on workforce transformation, the company helps businesses harness AI's potential without enterprise-scale resources. Dr Gallagher most recently was director of the Centre for the New Workforce at Swinburne University.
Contact details:
Dr. Sean Gallagher
0409480601