Irish Businesses Planning AI Strategies

A recent report reveals that a significant majority of Irish businesses have either implemented or are poised to adopt a clear AI strategy within the next six to twelve months. The findings, derived from the Innovation Index Pulse report, underscore the growing recognition of AI’s role in enhancing operational efficiencies and driving innovation.

Survey Insights

Conducted by the Industry Research & Development Group (IRDG) in collaboration with KPMG, the survey encompassed over 500 companies that are actively engaged in research and innovation. The report identifies budget limitations and the soaring costs of innovation as the primary hurdles companies face in realizing their AI ambitions.

Impact on Research, Development, and Innovation

While Ireland’s research, development, and innovation (RDI) sector plays a crucial role in driving growth and employment, the report warns that a lack of funding could lead to a reliance on foreign technology, thereby reducing competitiveness. According to the research, nearly two-thirds of businesses indicated plans to boost their RDI spending, driven by emerging challenges such as AI adoption and talent shortages.

The recent increase in the R&D tax credit rate to 30% is expected to catalyze growth; however, this figure has seen a 12% decrease compared to a similar query posed in Ireland’s Innovation Index 2024 survey conducted in May.

Administrative Hurdles

The report also highlights ongoing administrative burdens related to R&D tax credit claims and grant applications, which continue to pose challenges for businesses. Ken Hardy, Head of KPMG’s RDI Incentives Practice, remarked, “The high cost of innovation has led to concerns about decreasing confidence in the RDI environment.” He emphasized the need to enhance the incentives for investing in RDI to secure Ireland’s competitive edge.

Urgency for Action

Dermot Casey, CEO of IRDG, emphasized that while businesses are keen to adopt AI and green technologies, they are often stymied by high costs and gaps in funding. “We need immediate action to break down these barriers,” Casey stated, further insisting that Ireland must enhance its RDI environment to reclaim its position as a global leader in innovation.

As businesses increasingly look toward AI strategies, addressing these financial and administrative challenges will be crucial in fostering a robust environment conducive to innovation and growth.