The EU has hailed Ireland as a European tech leader, but warns small businesses and public services are falling behind.
The European Commission’s latest Digital Decade report scores every member state against the EU’s 2030 technology goals.
Whilst Ireland receives praised for its “high level of ambition” and its €9.24 billion “investment roadmap”, the EU warns of significant structural gaps in the domestic economy.
A ‘Silicon Island’ for connectivity
Ireland continues to punch above its weight in digital infrastructure. The European Commission praised the country’s strong fixed connectivity and expanding gigabit-capable coverage via the National Broadband Plan.
Other key areas of praise include:
- Digital Skills: Irish citizens remain well above the EU average for basic digital skills.
- Cloud Leadership: Irish businesses are ahead of the curve, with 84 percent cloud take-up, already surpassing the EU’s 2030 target of 75 percent.
- Strategic Ambition: The report highlights Ireland’s ‘Silicon Island’ 2025 semiconductor strategy and its role as a hub for “digital unicorns” and global tech players.
- Digital Identity: Progress on MyGovID, which is reaching the pilot stage, is noted as a front runner towards the European Digital Identity Wallet.
SMEs and AI lagging behind
But the European Commission warns that the presence of global tech leaders, with their European headquarters in Ireland, is not filtering down to the domestic economy.
Stagnating digitalisation of small and medium sized enterprises (SMEs) is a particular concern.
The European Commission says Irish SMEs are failing to adopt advanced tech at the same pace as their international peers.
Specific warnings:
- The AI Gap: Only 26 percent of Irish businesses have adopted AI, far below the 2030 target of 75 percent.
- Specialist Shortages: Growth in the number of ICT specialists remains “too slow,” creating a bottleneck that prevents local firms from scaling up.
- Healthcare and Justice: Public service digitalisation remains “uneven.” The report specifically calls out the “paper-based” justice system and “weak access” to electronic health records.
Funding Cliff edge
The report also identifies a looming financial challenge. Nearly half of Ireland’s current digital measures are set to expire by the end of 2026.
€535 million in public funding must be renewed or replaced by the end of the year if a funding gap is to be avoid, the European Commission says.
The Digital Decade is the EU’s 10-year plan to shape Europe’s “digital transformation”. It was first launched back in 2021.
Europe picture
Across Europe, there is still a long way to go to meet EU tech ambitions.
A senior European Commission official said that progress on production of semiconductors in the EU was insufficient, there was too much tech and computing dependency on other parts of the world and a shortage of ICT (Information and Communication Technology) experts.
The Digital Decade set a target of recruiting 20 million ICT experts by 2030. The European Commission says that Europe is only currently half way there.
“At the current rate, we will not make it,” she warned.
Global challenges
The political climate has also changed for the worse since the targets were set.
Back then, China was the great competitor. That’s still the case, but Europe now also doubts if it can rely on the United States.
Some targets are more promising. The EU says more than half of Europeans have “basic digital skills”.
There is also impressive progress on the roll out of 5G networks with coverage now at 90 percent of the European Union, according to officials.
The target of 100 percent by 2030 looks well in reach.
But other more high tech targets are way off.
Failing targets
The Digital Decade commits to 10,000 “climate-neutral and highly secure edge nodes”, advanced computers placed strategically across the EU to ensure the fastest possible processing times.
So far roll out has only reached 75 percent.
Artificial intelligence (AI) is also way behind schedule.
The Digital Decade committed to a target of three-quarters of businesses using AI. According to the European Commission the current rate is around 25 percent.
That is up from only 13.5 percent in 2024.
EU budget
The EU is currently in the middle of negotiating its next seven year budget and officials hope the report will convince member states to direct more funding to tech projects.
Digital projects pursued under the EU’s emergency fund to overcome the covid pandemic, the Recovery and Resilience Facility, had a cost benefit ratio of 1:1.5, said one European Commission official proudly.
Member states are currently pushing back on the European Commission’s proposed €2 trillion budget.
Officials want to see movement towards an agreement during Ireland’s presidency of the Council of the European Union.