Irish Medtech, the Ibec group representing the medical technology sector, has called for greater investment in advanced manufacturing and digital technologies.
The group has released its latest Manufacturing Report in which it outlines a series of challenges facing the sector.
A survey carried out by Medtech Industry found labour costs (72%), housing (67%), and workforce retention (63%) remain the most pressing challenges.
The research also found that small and medium-sized enterprises (SMEs) in the medtech sector require additional support to fully embrace digital transformation and AI-driven efficiencies.
AI adoption in manufacturing (54%) is higher than the national average (39%), but further incentives are needed to ensure SMEs can scale digital solutions.
Two-thirds of respondents are planning to introduce or enhance AI initiatives in the next 1-2 years.
However, skills shortages remain a major barrier, with 80% of companies citing access to talent as a core policy concern.
According to the report, business sentiment in the sector remains polarised, with weaker global growth forecast and trade uncertainties driving companies to focus on expansion and new markets in 2025.
"With Ireland exporting over €16bn in medtech products and a leader in global stent and orthopaedic knee production, there is a clear economic case for investing in advanced manufacturing," Irish Medtech said.
"However, the ability of smaller firms to adopt AI, automation, and digitization remains a business imperative," it added.
The organisation is pushing for the Government to expand funding for SME-led digital transformation initiatives, and to prioritise AI and automation in the National Life Sciences Strategy.
It also highlights the need for tailored support for workforce reskilling and apprenticeships.
"The European Union's landmark €200bn InvestAI fund, with €20bn earmarked for AI gigafactories, presents a unique opportunity for Ireland to lead in digital manufacturing," said Irish Medtech Chair, Jackie Murphy, VP, Manufacturing Plant Manager, Alcon.
"The Irish AI Advisory Council has already urged the Government to establish a real-time 'AI Observatory’ to track AI adoption, skills development, and market trends - aligning with Irish Medtech’s call for a national strategy to accelerate digital integration across all manufacturing tiers," Ms Murphy said.
