Small and medium-sized businesses (SMBs) are moving faster than bigger companies on AI, because they have less room for delay. Large companies may have bigger budgets, but they also tend to have more layers, legacy systems, and processes. Smaller businesses do not have the luxury of waiting. They need to test and decide, change course, and grow faster, and new Upwork research shows they are using AI to do exactly that.
Among businesses with 10 to 249 employees, 17% say AI-first process design is already fully integrated, and nearly 80% plan to increase spending on both AI tools and AI adoption initiatives. For these SMBs, AI is becoming part of how their businesses run.
But speed is only part of the story. Smaller businesses also lack the luxury of excess headcount or capital—common growth constraints. Nearly half say skill gaps in available talent were one of the top factors affecting their business in Q1 2026.
When SMBs turn to flexible talent to overcome those constraints, the top reasons are clear: access to specialized skills and speed to hire and complete projects. That combination helps explain why so many smaller businesses are pairing AI with independent talent as a practical way to keep moving and growing.
What This Looks Like in Practice for SMBs
AI is changing how work gets done and who’s doing it for SMBs: what stays in-house, what gets automated, what gets built with outside expertise, and how quickly teams can move from idea to execution.
AI is changing which kinds of talent matter most. For SMBs, the advantage comes from pairing AI with the right expertise at the right moment, whether that means expanding capacity, adding specialized skills, or building something entirely new.
These SMBs are combining AI with flexible talent to move faster, operate beyond their size, and grow more ambitiously.
What’s Next: AI Agents Scale SMBs’ Work, While Talent Makes It Stick
The research also finds that AI agents are moving closer to the center of the business: 57% of SMB leaders say AI agents are important to business strategy, and 35% say they are already mission-critical. Nearly half predict that one of the top benefits they expect from AI agents is the ability to create new products or services.
That changes what these businesses need from people. The better AI gets at routine work, the more valuable specialized human expertise becomes. That shift is already apparent in what SMBs want most from independent professionals: AI proficiency and understanding (55%) and technical or coding expertise (48%) rank among the top abilities they prioritize.
Someone still has to decide what to build, evaluate what AI produces, and adapt when things do not work as expected. SMBs are increasingly bringing in flexible talent to do precisely that kind of work. In fact, 74% of SMBs say they plan to increase freelancer hiring over the next three months.
That may be one of the clearest signals in the research. SMBs are moving faster on AI for good reason, but actually turning AI into execution and growth also takes the right people.
Dr. Gabby Burlacu is Senior Research Manager at Upwork, where she studies how organizations are adjusting their cultures and talent practices to access skilled talent in a rapidly evolving world of work. Her research has been featured in a variety of peer-reviewed studies, articles, book chapters, and media outlets, and has informed strategy and technology development across a range of Fortune 500 companies. Gabby holds a Ph. D. in industrial-organizational psychology from Portland State University.
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