How SMBs Are Turning AI Into Growth

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 the business runs.

But speed is only part of the story. Smaller businesses also do not have 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.

Thruhike is a solid example of the potent combination of AI and independent talent in action. The Boston-based company helps connect other small businesses with consumers through shoppable, personalized local experiences. As it scales, the team uses freelancers and AI to improve internal workflows across data collection, backend operations, and content curation, cutting project timelines from a month to a week without taking on the cost of a large full-time team.

5Four Digital offers another prime example. Founder John Saunders has spent more than a decade building his agency through Upwork, using the platform to assemble a team of more than 25 professionals across branding, design, data, and other functions. More recently, as 5Four Digital looks to stay competitive in a changing market, the company turned to Upwork again to hire on-demand AI specialists who can help develop a chatbot for clients. For a smaller agency, that kind of flexible access to specialized talent makes it easier to integrate new technologies, move quickly, and scale.

PTS Group offers a final testament of what’s possible when an SMB uses independent talent to build an AI solution from the ground up. The healthcare M&A firm helps dentists navigate the deeply personal process of selling their practices and had a clear vision for a proprietary AI matching tool, but no in-house team to build it. Through Upwork, the company engaged AI talent to develop a deep learning tool that analyzes buyer and seller profiles and surfaces better matches faster. Since launch, PTS has seen a 15% increase in deal closure rates, while brokers have been able to spend more time on the relationship-driven work the business depends on.

These examples illustrate that AI is changing what kind of talent matters 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 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, as AI proficiency and understanding (55%) and technical or coding expertise (48%) rank among the top abilities they are prioritizing. 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 said they plan to increase freelancer hiring in 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.

Research note: This post includes findings from the Upwork Research Institute’s Q1 2026 Business Leader Landscape survey of 750 U.S.-based business leaders, including a subgroup analysis of SMBs with 10 to 249 employees (n=400).