Many Irish SMEs are struggling to integrate artificial intelligence into their operations, but the government is progressing with initiatives to address this, writes Sorcha Corcoran

New research from Trinity Business School, in collaboration with Microsoft Ireland, has found that only 10 per cent of Irish SMEs have an artificial intelligence (AI) strategy, compared to 50 per cent of multinationals.

Drawing on insights from 300 senior leaders across the island, the AI Economy in Ireland 2025 report, showed that 40 per cent of SMEs are actively using AI in some form, with 62 per cent citing the lack of AI expertise as the top barrier to adoption.

Cost concerns and uncertainty around implementation are also standing in the way of more SMEs adopting AI.

Smaller organisations, particularly those with revenues under €10m, tend to adopt AI as part of broader software packages rather than through integrated or standalone AI solutions, according to the report.

Organisations adopting an ‘AI-first’ approach — by integrating AI across all divisions — represent only 8 per cent of the total sample, up from 1.81 per cent in 2024.

“While Ireland has the essential ingredients for AI success, we must recognise the challenges that businesses, especially SMEs, face in fully unlocking AI’s potential,” Catherine Doyle, general manager at Microsoft Ireland, says.

The report reveals AI’s potential to contribute at least €250bn to Ireland’s GDP by 2035.

However, it says, this could increase by a further €60bn, depending on how businesses, government and industry leaders harness AI’s capabilities and implement policies that foster responsible innovation.

“Ireland is at a pivotal moment in its AI adoption journey, and this year’s research underscores both the progress made and the work still to be done,” Ashish Kumar Jha, associate professor of business analytics at Trinity Business School and co-author of the report, says.

“AI adoption in Ireland has nearly doubled in the past year, but the challenge now is moving beyond experimentation to full-scale, strategic implementation.

Larger organisations are leading the charge, while SMEs and the public sector risk falling behind.

“For Ireland to fully realise AI’s economic potential, we must address barriers faced by SMEs and the public sector, focusing on governance, skills development and strategic integration.

“The organisations that thrive will be those that integrate AI as a core strategic asset, investing in talent, governance and innovation.”

Latest figures from the Central Statistics Office show the proportion of enterprises in Ireland using AI in some capacity rose from 8 per cent in 2023 to 14.9 per cent in 2024.

The use of AI for automating workflows or assisting in decision making was the most common AI technology used among both medium and large enterprises, while the use of AI for natural language generation was the most prevalent among small enterprises.

In a statement released on February 19, Niamh Smyth, Minister for trade promotion, AI and digital transformation, said the government’s goal was for at least 75 per cent of enterprises in Ireland to be using cloud, AI and data analytics by 2030.

“One of the biggest opportunities around AI deployment is in bridging the productivity gap in our indigenous SMEs.

“Generative AI and AI assistants offer huge opportunities to drive efficiencies, in particular in microenterprises and SMEs,” she said.

“We need to encourage more businesses to adopt AI by ensuring that the necessary enablers are in place.”

One of these enablers is the Grow Digital Portal (growdigital.gov.ie), developed by Smyth’s department and launched last July.

It incorporates a case study catalogue with digital success stories showcasing how non-tech businesses have embraced digital solutions to boost their operations.

“The use of role models and case studies that business owners can relate to is a good way of encouraging them to consider technology that is a good fit for them.

“Simply put, if we can encourage more AI adoption, it will help save business owners time and money and make them more competitive,” Smyth said.

“That’s why eligibility for the Local Enterprise Offices’ [LEOs] Grow Digital Voucher has been widened, expanding eligible expenditure and doubling the grant to €5,000, or 50 per cent of expenditure. It has been extended to all businesses, regardless of their export status, with up to 50 employees.”

The LEOs have also introduced the Digital for Business consultancy scheme that provides expert digital consultants to help businesses with up to 50 employees to explore technology adoption opportunities.

Smyth noted that the range of digital upskilling initiatives would be expanded as part of the government’s recently refreshed National AI Strategy — including those available via Skillnet Ireland and Springboard+.

“Our ambition is that AI adoption will result in safer, more productive workplaces, where workers are empowered by AI tools but not replaced,” she said.