A report conducted by Implement Consulting Group and commissioned by Google examines a highly important group of companies termed ‘innovative digital businesses’.
Delivered in partnership with Scale Ireland, the event aims to promote discussion around the opportunity of AI for Ireland’s indigenous tech start-up and scale-up companies. Innovative digital businesses are defined as businesses likely to have digital technology at their core and a scalable business model less than 30 years old. They fall into one of three categories: startups (2–49 employees), scaleups (50–500 employees), or grownups (over 500 employees).
The economic role of digital innovative businesses
Innovative digital businesses play an outsized role in the Irish economy, paying higher average wages than other businesses. While these businesses have accounted for 4% of private sector job growth since 2017, they have created fewer jobs in Ireland compared to other EU countries. In Denmark, for example, these businesses account for 11% of new jobs, and in Sweden, they account for 13%.
The use of AI in innovative digital businesses
Innovative digital businesses are key to capturing the AI opportunity and closing Europe’s competitiveness gap. These businesses are 50% more likely to create radical innovations and play a crucial role in the early diffusion of new technologies, such as generative AI. These businesses develop new AI tools, in turn enabling businesses across sectors to benefit from the new technology.
The potential of scaling innovative digital businesses
Ireland has a strong ecosystem of innovative businesses, with 56 innovative digital businesses per 100,000 working-age adults compared to the EU average of 19. If Ireland can transform more startups into grownups, reaching the same relative levels as the three leading OECD countries, it could create 14,000 jobs and contribute €1.8 billion annually to the Irish economy.
James Lawless TD, Minister for Further and Higher Education, Research, Innovation and Science said:
“It is essential that businesses are supported in the adoption of AI. This includes tailored support for start-ups and scale-ups, but the foundation of all this is people and the skills they bring to bear. My Department is acutely focused on Ireland’s future skills needs. This includes expanding digital upskilling and reskilling opportunities through initiatives like Springboard+, MicroCreds, apprenticeships, and others. Together, with the right capital, the right infrastructure, and most importantly, the right skills, Ireland is ready not just to adopt AI – but to lead in shaping it.”
Vanessa Hartley, Head of Google Ireland, said:
“This is a transformative opportunity for Ireland to leverage AI to secure our position as a global leader in technology. To fully realise AI’s potential, Ireland should seek to enhance the conditions that support businesses to increase AI adoption and scale successfully. Google Ireland is committed to continuing its role in supporting Ireland’s competitiveness in these crucial areas.”
Marina Fitzgerald, CEO of Scale Irelan,d added:
“Scale Ireland is hugely positive about the potential economic and societal benefits of AI, which is being deployed by the vast majority of our members. This report is very timely as it highlights the opportunity for Ireland to create a supportive environment so indigenous tech companies can leverage AI to drive innovation, economic growth and competitiveness. Put simply, we need to create the conditions to support and match the global ambition of our founders.”
Report recommendations
The report sets out five areas of focus for Ireland to support the scaling of these businesses:
— Build an AI-empowered workforce by investing in skills and training systems, treating AI as a core component of the education system.
— Widening access to state-of-the-art AI tools, digital infrastructure and compute power.
— Invest in research and development by investing in long-term AI research and encourage private investment at a national and EU level.
— Risk-based regulation to provide clarity to developers, adopters and users.
— Capital: Unlock fragmented risk capital markets and increase the attractiveness of venture capital investment in the EU.
