Published on the 18/02/2026 | Written by Heather Wright

Time, skills and confidence hold productivity wins back…

New Zealand’s small and medium-sized businesses are caught in a productivity paradox – overwhelmingly believing technology could help them work smarter, yet unable to put that belief into practice.

New research from Clemenger Group, carried out for Spark, highlights the contradiction with 71 percent of SMEs with 10-49 full-time equivalents saying new technology could deliver significant productivity gains, but only 26 percent saying technology is the most important factor in improving efficiency, and reporting a number of both practical and human barriers to tech adoption.

“While SMEs see tech as an enabler of productivity, many are prioritising staff development because they lack the capability, investment or confidence to adopt digital tools.”

The figure of just 26 percent prioritising technology for improving efficiency in their business compares with 38 percent of enterprises with 100+ FTEs for whom technology and software solutions are the number one investment area to improve efficiency. For both groups, staff development and skills recruitment was a bigger priority.

That tension underscores a deeper challenge, with the report showing SMEs aren’t unwilling to adopt technology, but they are struggling to find the time, capability and confidence to make it happen.

“While SMEs see technology as an important enabler of productivity, many are prioritising staff development ahead of digital tools – often because they lack the capability, investment or confidence to adopt them,” Spark says.

The survey of nearly 400 business leaders shows for SMEs the barriers are a mix of both technology access and human factors. Lack of knowledge expertise was the biggest barrier, cited by 42 percent of respondents, followed closely by the cost of technology at 40 percent. Concerns over ROI was least concerning for many, at just 16 percent, behind lack of access to investment/other priorities (38 percent), resistance to change (36 percent), concerns over risk and disruption (25 percent) and lack of time (21 percent). Mid-sized organisations with 50-99 FTEs were more likely to be restricted by access to investment and the need to invest in other priorities.

SMEs are the backbone of the economy for both Australia and New Zealand and their role in lifting national productivity – and the technologies needed to support that – has been a topic of discussion for years.

In Australia, 56 percent of national gross value-added – the value added to goods and services in the economy – is attributed to SMEs according to ABS, underscoring their central economic importance. Yet Productivity Commission analysis last year indicated they lagged behind larger companies in productivity by around 50 percent – a trend consistent with other OECD countries. Slow technology adoption, due to cost or uncertainty, has been held up as a key obstacle, along with regulatory requirements and skills shortages.

It’s a similar story in New Zealand, where 95 percent of companies are SMEs.

Interestingly, the Spark report shows 74 percent of SMEs believe they’re ahead of their competitors in terms of adopting streamlined or efficient processes.

The report also shows many SMEs don’t yet view technology as central to their long-term competitiveness. While larger organisations are more likely to describe technology as essential, smaller companies and start-ups were less convinced. The survey these groups were less inclined to associate new technologies with delivering significant productivity gains, and more likely to believe the business could achieve those gains without applying technology-based solutions.

That disconnect between recognising the importance of technology and treating it as a priority – and the ongoing challenges experienced by SMEs in implementing technology – has prompted Spark and business-growth centre The Icehouse to launch a nationwide program of workshops to help SMEs bolster productivity.  The hands-on, two-hour workshops, which kick off in Queenstown in early March, will focus on how small changes in leadership habits can materially lift productivity and improve margins, supported by simple digital workflows. They also include a risk-and-accuracy checklist for safe adoption and implementation within the attendees business and each attendee will leave with a 30-day plan, weekly review rhythm, one process improvement to test and a ‘Stop, Start, Systemise’ productivity framework list tailored to their business.

Greg Clark, Spark chief customer officer, says the report findings underlined that SME owners are often working flat-out without the systems or headspace to make meaningful productivity gains, and highlighted the need for a different approach to supporting the SME, prompting the SME Growth Series program.

“These workshops create time and space to connect with peers, hear from experts and tap into thought leadership that can spark new ideas and confidence.”

Australian findings reinforce SME tech-performance link

Recent Australian surveys highlight similar challenges for SME tech adoption across the Tasman, and demonstrate the gains available when small businesses adopt digital tools.

The Council of Small Business Organisations Australia (Cosba) 2025 State of Small Business report, in conjunction with Square, shows tech-enabled Australian SMEs significantly outperform non-digitised counterparts. Those using Square’s software tools processed 94 percent more in sales volume that Square sellers who didn’t, and businesses with API integrations processed 2.6 times more in sales and nearly twice the number of transactions.

But while 85 percent of the 500 small businesses surveyed had at least one digital tool, and the majority were planning to upgrade technology – spending less than $5000 for the following 12 months – many cited concerns around the need for practical training, tailored support and affordable solutions – barriers closely mirroring those seen in New Zealand.

Several programs are underway in Australia to attempt to increase SME tech use – and tech confidence. The National AI Centre is aiming to unlock the economic benefits of AI, providing guidance and engagement to help SMEs, not-for-profits, social enterprises and First Nations businesses adopt the technology. The $17 million AI Adopt program is providing tailored assistance for SMEs implementing AI. (The Icehouse/Spark program will also provide participants with free access to the Spark AI Foundations course to continue improving their AI literacy.)

Evidence from both sides of the Tasman is clear: SMEs sit at the centre of the challenge – and opportunity. Efforts to close the digital capability gap will play a role in determining future growth for businesses and countries alike. The question for now, however, is whether the targeted support and practical guidance can turn widespread recognition of technology’s value into real-world gains – and whether SMEs can move from knowing what needs to be done to having the time, skills and confidence to do it.