AI adoption and options to boost innovation
AI is moving rapidly into the mainstream of Irish business. Overall, 72% of organisations have either adopted AI or plan to integrate it within the next 6–12 months, up from 66% in 2024.
Among those already using AI, 59% report higher productivity, while only 4% say it has reduced graduate recruitment or entry‑level roles, suggesting AI is being used more as an enabler than a substitute for early‑career talent.
Businesses are also sending a clear signal on innovation policy. Almost three in four organisations (74%) say an Innovation Tax Credit would enable more innovative work to be carried out in Ireland, and 72% believe it would directly support the development of new products and services.
The top priorities for the Department of Finance’s forthcoming R&D Compass are broadening the range of eligible R&D activities (83%), widening qualifying expenditure (70%) and introducing a new Innovation Tax Credit (74%).
Ireland’s Research, Development & Innovation (RDI) sector continues to drive growth and employment, but without funding it risks dependence on foreign technology and diminishing competitiveness, according to the Ireland's Innovation Index Pulse Survey of 285 Irish companies.
Ken Hardy, Head of KPMG’s RDI Incentives Practice noted: "Investment in RDI is critical for long-term economic growth and job creation across the country. Notably, 59percent of businesses plan to increase RDI spending, driven by many factors including recent increase in the rate of the R&D tax credit to 35percent. Concerns in relation to geopolitical/international trade challenges have led decreasing confidence in the RD&I environment. We need to continue to improve the attractiveness of investing in RDI to maintain Ireland's competitive position."
Dermot Casey, CEO of IRDG, remarked: "Innovation-driven economic growth creates our prosperity. It’s the difference between thriving and stagnating. The recent budget has underpinned industry investment in R&D up from 300 million to over six billion over 20 years. Facing global economic and climate challenges we need to be brave, to lead globally in supporting innovation and ensure the forthcoming R&D Compass charts a visionary path forward for business and society."
