Caroline Dunlea
Chairperson, Digital Business Ireland
Irish SMEs face a challenge to improve their competitiveness in this business environment. Digital transformation offers opportunities for them to do so and should be embraced.
The opportunities in digital transformation available to Irish SMEs are significant, offering the potential to access new capability in innovation, analytics and international marketing that may otherwise not be affordable to them.
Digital gap holds SMEs back
While AI usage by Irish businesses increased to 15% in 2024, digital uptake among SMEs remains problematic. An October 2024 Microsoft study found that up to 64% of rural SMEs struggle with digital skills, and SME investment in digitalisation fell from 41% to 36% between 2021 and 2023. The competitiveness agenda being driven at a national and EU level needs to take this into account, in order to seize the opportunities digital tools provide.
Irish SMEs should explore
ways to efficiently and
cost-effectively transform digitally.
Government should rethink SME digital support
While Government efforts to provide support for digital innovation have been laudable, bringing SMEs along the digital transition has not delivered on its potential. Schemes such as the GrowDigital voucher have not done enough to improve the deployment of digital tools among SMEs. With 78 applications having been made to obtain this funding since its launch in September 2024, it is clear that a new approach to digitisation for SMEs must be adopted, possibly through a tiered scheme, categorising projects of varying scale and complexity to determine the level of grant support they should receive.
To help SMEs market themselves to wider audiences, Enterprise Ireland’s Digital Marketing Capability grant covers 50% of project costs of up to €70,000, with €35,000 the maximum sum on offer. If a similar scheme were offered based on a digital transition that is tiered depending on the scale of the project, this extra support would help businesses considerably. Furthermore, an Accelerated Capital Allowance (ACA) of 100% to cover the costs of the adoption of AI tools in year one should be introduced.
What can businesses do?
Irish SMEs should explore ways to efficiently and cost-effectively transform digitally. For example, using AI in marketing and customer engagement projects can improve a company’s visibility in global markets and boost competitiveness, something the Government has said it is focused on via its market diversification strategy.
However, many SMEs will have to take charge of their own destiny and provide their own ICT training to make employees fully equipped for the digital transition. Developing a bottom-up culture of digital competitiveness will reap obvious benefits in terms of efficiency, plus scalability potential.
