The AI Revolution: Investigating How Small and Medium-Sized Enterprises (SMEs) are Adapting to Artificial Intelligence (AI) in the Manufacturing Sector in New Zealand
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Authors
Canon Iriarte, Alexia Gabriel
Author ORCID Profiles (clickable)
Degree
Master of Applied Management
Grantor
Otago Polytechnic Auckland International Campus
Date
2025
Supervisors
Skelton, Lorraine
Hewage, Waruni
Hewage, Waruni
Type
Masters Thesis
Ngā Upoko Tukutuku (Māori subject headings)
Keyword
Artificial Intelligence
SMEs
manufacturing
New Zealand
technology-organisation-environment framework
SMEs
manufacturing
New Zealand
technology-organisation-environment framework
ANZSRC Field of Research Code (2020)
Citation
Canon Iriarte, A. G. (2025). The AI revolution: Investigating how small and medium-sized enterprises (SMEs) are adapting to Artificial Intelligence (AI) in the manufacturing sector in New Zealand [Master's thesis, Auckland International Campus, Otago Polytechnic]. Research Bank. https://doi.org/10.34074/thes.7191
Abstract
Small and medium-sized enterprises (SMEs) are the backbone of New Zealand’s economy and dominate the manufacturing sector, yet evidence on how they are adopting Artificial Intelligence (AI) remains limited. Focusing on the two largest subsectors, Food & Beverage and Machinery & Equipment, this thesis examines how these businesses are adapting to AI technologies, where AI is being applied, what drives its implementation, what barriers exist, and which strategies enable an effective transition.
Using an exploratory mixed-methods design, this study primarily combines on qualitative evidence from semi-structured interviews with 10 manufacturing SME leaders and 3 AI consultants, complemented by quantitative insights from an online survey completed by 23 respondents. The literature review and analysis, grounded in the Technology–Organisation–Environment (TOE) framework, integrate current adoption practices and perspectives among New Zealand manufacturing SMEs and AI consultants.
Findings indicate that adoption is at an early stage, with use concentrated in administrative processes, marketing, quality related tasks. Constraints encompass knowledge gaps, limited digital capacity and awareness, and overall low organizational readiness. Enablers include capability building, leadership, expert guidance, supportive policy and ecosystem factors.
Actionable recommendations are offered for decision-makers to guide firm-level practice and national initiatives aimed at strengthening SMEs’ resilience through transformative AI adoption. The study also provides one of the first empirical accounts within the academic literature of AI adoption among New Zealand manufacturing SMEs, while extending the TOE framework to smaller, resource-constrained contexts. Limitations include a small sample drawn from two of seven manufacturing subsectors, reliance on self-reported data, and a focus on New Zealand, which may minimize generalisability to other settings.
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CC BY-NC-ND Attribution-NonCommercial-NoDerivs 4.0 International