Why Irish and UK business leaders are facing very different futures

Should business leaders be hopeful these days? Irish business decision-makers are in fact optimistic and increasingly so, while high business confidence in the UK is starting to soften. At the same time, people are top of the business agenda in Ireland, while tech is the key concern in the UK, writes Niall Savage, Head of Private Enterprise at KPMG in Ireland.

That picture emerges from a side-by-side analysis of recent Enterprise Barometer reports produced by KPMG in Ireland and in the UK. Both are based on detailed surveys*, one of over 100 key business decision-makers in Ireland and another of 1,500 private business owners in the UK.

* RedC conducted the KPMG Enterprise Barometer survey in Ireland in September 2025, while OnePoll UK carried out the corresponding research there in late November and early December 2025.

Niall Savage

Partner, Head of Private Enterprise, National Chairperson of Audit Committee Institute

KPMG in Ireland

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Confidence drivers

The real question is whether we are channelling optimism into the right investments.

Niall Savage

Partner, Head of Private Enterprise, National Chairperson of Audit Committee Institute

KPMG in Ireland

On the surface, UK businesses seem more confident, with 87% expressing confidence about business growth in the next year and 82% expecting revenues to rise, compared with 79% and 71% respectively in Ireland. Confidence in Ireland is rising, however, up seven percentage points on a year earlier, while UK confidence is down from 92%.

Irish confidence is heading in the right direction, but confidence alone doesn’t build competitive businesses. The real question is whether we are channelling that optimism into the right investments. On one critical point, the data suggests we are not.

Business challenges

This may hinge on challenges business leaders in each country believe they face. In Ireland, those are driven by talent and costs, while in the UK, cyber, operational risk, and macroeconomic factors are seen as key issues.

Talent and labour are by far the primary concerns of Irish business leaders – 75% pointed to labour costs and 55% to the challenge of recruiting and retaining staff. The housing crisis and regional talent shortages are exacerbating this labour pressure, especially outside Dublin. Until Ireland meaningfully addresses housing supply, we are putting a ceiling on our own growth potential. This should concern policymakers as much as business leaders.

Understandably, given broader geopolitical volatility, cyber risk is seen as the dominant business challenge in the UK. Close to 70% of respondents there said cyber risks have increased in the past year, with nearly a quarter saying that growth had been significant. This follows high-profile cyber incidents that caused severe disruption to leading UK firms in 2025 – and rippled along their supply chains.

About half of UK business owners said risks such as supply chain dependencies, competitive dynamics and brand reputation are also on the rise.

Naturally, Irish business leaders also see geopolitical uncertainty (cited by 47%), tariffs (36%) and supply chain issues (32%) as concerns.

The dominant challenges in each market are affecting investment priorities for businesses. While Irish business leaders were most likely to put workforce and skills as their top priority for spending (named by 38%), investment in the workforce is set to fall in the UK. Only a quarter of respondents there listed it as a top two priority for this year, down from close to half in 2025.

Investment priorities

The balance weighs heavily in the other direction when it comes to tech and AI. It’s an overarching investment priority for UK businesses, with 77% saying they’ll invest in this area. Over half (52%) see opportunities in embedding AI in products/services, while 57% see efficiency gains as the key opportunity for them to gain from using AI.

Ireland is at an earlier point on the AI adoption curve. Only 19% of those polled here say AI integration is a major near-term opportunity, while only 22% say technology (including AI) is an investment priority. Innovation is rapidly coming into focus, however. One in four Irish business decision-makers said it’s their most important area for investment, up from 15% within a year.

The gap between Irish and UK technology investment should be a wake-up call for Irish business leaders. Yet this measured approach to AI reflects a priority for Irish business leaders – people over technology.

While UK businesses are racing to embed AI, Irish businesses are focused on the workforce that will deploy it. Talent and skills remain the foundation of Ireland’s growth strategy, with business leaders choosing to invest in their people before their platforms.

However, Ireland has built its reputation on attracting world-class tech companies, we now need our domestic businesses to be equally ambitious about adopting the tools those companies are building.

Funding growth

The research also shows another startling difference in the business environment between the two countries. Ireland leans towards long-term organic growth, with 83% wanting to build “a large, enduring company”, while the UK shows much greater appetite for mergers, acquisitions and private equity funding.

Only a fifth of Irish business owners have considered cashing out and selling up, while 46% of UK businesses plan to turn to private equity, while 31% expect to get funding from capital markets or an IPO.

There’s also a contrast when it comes to growth strategies. In Ireland, growth continues to be driven by domestic demand, although new products or markets should drive growth for over half of businesses.

In the UK, the slow local market means businesses are leaning hard on internationalisation. Seven in 10 are increasing their export focus, looking to build sales in Western Europe (46%), Eastern Europe (40%) and North America (34%).

Competitive advantage

It’s clear Ireland and the UK are two private enterprise ecosystems evolving differently. Irish businesses are resilient, demand-driven and committed to long-term growth. Their biggest constraints are labour, cost inflation and structural issues, particularly housing and infrastructure. Innovation is rising, but tech adoption lags the UK. The culture is positive and people-focused, but under pressure on costs.

There is no doubt private enterprises in the UK are more tech-driven and digitally mature, with heavy investment in AI. They’re also more actively pursuing international expansion and private equity, while facing greater macro uncertainty, higher cyber risk, and softer domestic demand.

Irish businesses are resilient, ambitious and confident. But confidence without strategic urgency is not enough. The data is clear – on talent, on housing and on AI adoption. The decisions Irish business leaders make in 2026 will define our competitive position for the decade ahead.