Recent findings from the Innovation Index Pulse Survey highlight a burgeoning interest in artificial intelligence (AI) among Irish businesses, despite ongoing challenges. The survey, which sampled over 500 companies involved in research and innovation, indicates that a significant majority are either implementing or planning to adopt an AI strategy within the next year.
According to the survey results, approximately 39% of Irish businesses have already integrated AI with a defined strategy, while another 32% aim to do so within the next six to twelve months. However, 30% of the surveyed companies still have minimal or no AI strategy in place.
The desire for increased research, development, and innovation (RDI) activities remains strong, with nearly two-thirds (65%) of respondents indicating plans to boost their RDI efforts or expand their workforce in this area. This figure, however, reflects a notable decline from 77% reported in a previous survey conducted as part of Ireland’s Innovation Index 2024 in May.
The survey also shed light on the growing focus on green technologies, revealing that over half (51%) of the participating businesses are engaged in the research and development of sustainable solutions. Among these, an impressive 95% intend to invest further in green technologies in the coming year. Conversely, only 2% of firms not currently involved in this sector plan to begin R&D in green technologies soon.
Despite the optimistic outlook on AI and sustainable technologies, the survey highlighted several barriers to innovation. A significant 62% of businesses identified budget constraints and high costs as the primary obstacles hindering their innovation efforts. Additionally, 43% of companies pointed to time limitations, and 34% cited difficulties in recruiting qualified talent as critical challenges.
The survey also revealed ongoing issues with R&D tax credit claims and grant applications, with 80% of respondents reporting a consistent administrative burden and 14% noting a worsening situation in the last six months. Only 6% experienced any improvements during this time.
Ken Hardy, head of KPMG’s RDI Incentives Practice, emphasised the importance of investing in RDI for Ireland’s long-term economic growth and job creation. He pointed out that the increase in R&D tax credit rates is a motivating factor for the 65% of businesses planning to enhance their RDI spending. However, Hardy warned that high innovation costs are creating concerns over diminishing confidence in the RDI environment.
Dermot Casey, CEO of IRDG, echoed these sentiments, calling for immediate action to dismantle barriers to innovation. He asserted that it is essential for Ireland to enhance its RDI environment to secure its position as a global innovation leader.
In a related development, a report released by Accenture highlighted the potential economic benefits of generative AI, projecting that it could contribute up to €148 billion to Ireland’s GDP by 2038—representing a 22% increase over existing forecasts. Moreover, a recent initiative announced by Galvia AI aims to assist Irish small and medium-sized enterprises (SMEs) in integrating AI solutions into their operations, underscoring the growing emphasis on AI in the business landscape.
In summary, while the Irish business sector shows a strong inclination toward adopting AI strategies and investing in sustainable technologies, significant barriers remain. Addressing these challenges is crucial for fostering innovation and maintaining Ireland’s competitive edge in the global market.
