The majority of Irish businesses have either adopted or plan to integrate a clear AI strategy within the next six to 12 months, according to new research.
The Innovation Index Pulse report surveyed more than 500 companies engaged in research and innovation.
The study was conducted by the Industry Research & Development Group (IRDG) and KPMG.
It shows that lack of budget and the high cost of innovation are as the biggest factors impacting companies’ ability to innovate.
According to the report, 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.
The research found that nearly two-thirds of businesses plan to increase RDI spending in response to challenges like AI and talent shortages, with the recent R&D tax credit rate increase to 30% continuing to drive growth.
However, this is down 12% from a similar question that was asked in the main Ireland’s Innovation Index 2024 survey in May 2024.
The administrative burden related to the R&D tax credit claims and grant applications remain an issue, according to the research.
“Issues such as the high cost of innovation have led to concerns about decreasing confidence in the RDI environment,” said Ken Hardy, Head of KPMG’s RDI Incentives Practice.
“We need to continue to improve the attractiveness of investing in RDI to maintain Ireland’s competitive position,” Mr Hardy said.
Dermot Casey, CEO of IRDG, said that businesses are eager to embrace AI and green technologies, but high costs and funding gaps are holding them back.
“We need immediate action to break down these barriers,” Mr Casey said.
“It’s time to radically improve Ireland’s RDI environment and claim our position as a global innovation leader,” he added.