Published on the 09/04/2026 | Written by Heather Wright

Low adoption, wrong spend drag productivity down…

Local small businesses are struggling to get value from technology, with many still not adopting enough of it in the first place and, when they do invest, often doing so in the wrong areas.

CPA Australia’s latest Small Business Survey of more than 4,100 businesses across APAC, shows both Australia and New Zealand are sitting near the bottom of the region for growth, innovation and technology adoption. It’s the second year New Zealand has ranked last for growth, something Rick Jones, CPA Australia regional head, dubs ‘a worrying trend’.

“Existing technology spend is not translating into profitability.”

In New Zealand just 38 percent of small businesses reported growth in 2025 – up on last year’s 36 percent but still well below the APAC average of 62 percent, and ranking New Zealand last out of the 11 markets surveyed. Just 26 percent said technology investment improved profitability, less than half the regional average and digital adoption remains weak. Australian results paint a similarly weak picture of low digital uptake and poor returns from tech investment.

Jones told iStart the problem is two-fold: Overall digital uptake in both markets remains well below Asia Pacific peers, and where businesses do spend, investment is heavily weighted toward basic IT such as computer equipment, rather than tools that change how the business operates. Online sales, digital payments and use of social media for customer insights, rather than visibility alone, remain underused, even as productivity pressures intensify.

With productivity firmly on the political agenda in both countries this election year, Jones says lifting small business technology should be a central priority.

“Our data consistently shows that businesses which invest effectively in technology grow faster, hire more people and are more likely to innovate. Countries like Singapore have demonstrated what targeted digital support programmes can achieve – there are proven approaches in our region that could work here,” he says.

Low adoption, low returns

The survey data shows that limited digital adoption remains a key issue across both markets, but the effect is most pronounced in New Zealand.

Only 32.4 percent of New Zealand’s small businesses generated more than 10 percent of their revenue from online sales in 2025, less than half the Asia Pacific average and the lowest results across all surveyed markets. Use of digital payment platforms is similarly low with just 35.4 percent receiving more than 10 percent of sales via services such as PayPal, Apple Pay or Google Pay, again ranking last in the region.

Technology use remains basic elsewhere too. Almost 31 percent of Kiwi small businesses don’t use social media for business purposes at all, compared with a regional average of 12 percent.

The pattern is mirrored in Australia, where 44 percent of businesses reported earning more than 10 percent of revenue online, still well below the Asia Pacific. The report notes however, that while New Zealand and Australian small businesses continue to be the least likely to generate online sales, Australia, at least, experienced an improvement year on year in 2025, while New Zealand’s decline continued. In Australia, 68 percent used social media for business, trailing the regional norm of 88 percent.

The gaps matter because the survey shows a strong relationship between digital adoption and performance. Businesses with higher use of online sales channels, digital payments and basic automation are most likely to report growth, hiring and innovation. “Technology continues to play a more critical role for high-growth small businesses than for other businesses,” the report notes.

Maintenance, not momentum

Where small businesses do invest in technology, the type of investment helps explain why returns remain weak locally.

In New Zealand, computer equipment was again the most heavily invested tech category last year – continuing a trend echoed repeatedly in the survey since 2020 – followed by website and accounting software. Australia was similar, favouring accounting software, followed by computer equipment and website.

In comparison, high-growth businesses across the region were most likely to invest in AI followed by cloud computing and CRM software.

CPA says this indicates A/NZ spending is often directed toward replacement or maintenance, rather than productivity-enhancing systems.

The profitability data reinforces that conclusion. Just 25.6 percent of Kiwi small businesses surveyed said tech investment improved their profitability in 2025, compared with a survey average of 56.3 percent. Australia recorded a similar outcome, with only 30 percent of businesses reporting profitability improvements from tech investments.

CPA links this to quality, rather than quantity of investment. Simply purchasing hardware – replacing devices, upgrading networks, maintaining on-premise systems – may keep the lights on, but it rarely changes cost structures, revenue flows or decision-making.

“What the survey shows is that existing technology spend is not translating into profitability,” Jones says. He says where business are investing it’s often without the sequencing or support needed to make the tools deliver operational change.

“The question is, how do we support these business owners in that capability piece, so they are not just investing in technology, but are investing in the right technology? That’s not just about using it right, it’s around making it work for the business so they are seeing returns,” he says.

Cashflow and time pressure points

Across both countries, the operational pressures facing small businesses underline why businesses are cautious – and why digital matters.

In New Zealand, 54 percent of businesses said increasing costs had a major negative impact in 2025, ranking highest among surveyed market. Hiring remains weak with only 7.4 percent increasing employee numbers, and just 14 percent expecting to hire in 2026. Innovation plans are similarly subdued with only 4.9 percent planning to introduce a new product, service or process in the coming year.

Australia’s results show similar stagnation, with CPA Australia business and investment lead Gavan Ord warning that prolonged underperformance among small businesses is feeding into a wider productivity slowdown. “When small businesses underperform year after year, it become a national economic problem, not just a sector issue,” he says.

Against that backdrop, the technologies most closely linked to measurable gains are not experimental. Jones points to practical improvements such as faster invoicing and payments, online ordering and booking systems and digital finance and reporting tools that reduce manual work across payroll, inventory and customer management.

He notes when businesses experience clear time savings and faster payments, confidence in technology investment tends to rise, easing hesitation around further adoption.

The older demographics of Australian and New Zealand businesses also has a role to play in tech adoption. New Zealand has the oldest small business ownership profile in the region, with 68 percent of owners aged 50 or over. Australia shows a similar generational divide, though less pronounced.

“It’s not an age thing in isolation, but what the survey showed is that business owners under 40 certainly reported growth,” Jones says. “They showed a lot more revenue through online sales and their digital and tech uptake is a lot higher. Younger business owners have a higher risk appetite and are more likely to invest in digital capability.”

In the wake of the survey results, Jones says business technology adoption needs to be made an essential priority for New Zealand (and Australia’s) growth and productivity agendas.

“We need to introduce some better sequence digital adoption support programmes,” he says, suggesting we look to Singapore for examples of programmes which have a proven track record in providing comprehensive support for small business.

“The government should consider designing business digital support programmes with more deliberate bundling and sequencing of measures, drawing on approaches used in Singapore,” CPA Australia says. “This would increase programme effectiveness, accelerate the diffusion of productivity enhancing technology and promote more effective use of existing digital capabilities. Over time this would support stronger productivity, greater business dynamism and a more competitive small business sector.”

In Australia the organisation is also calling for government to incentivise tech adoption and the development of stronger digital capability.

CPA is also calling for a coordinated package of measures to lift participation of younger people in small business. In New Zealand, that includes a ‘start-up apprenticeship’ or mentoring programme and improved access to finance and professional advice for younger owners, potentially through a ‘First Business Owners programme’ connecting participants with accredited advisers and possibly including a SME loan guarantee component.

Jones, who dubs the survey a ‘challenging read’ for New Zealand, says it’s not just about government investment, however. He’s calling for other organisations and consultants to step up and provide the mentoring relationships to help small businesses, and for the businesses themselves to more actively share with other small businesses their successes and learnings. CPA Australia itself is working on providing extensive professional development for its own members to help them on the journey – and ensure their small business customers can also move forward.