New ESRI research has found that Irish businesses perform relatively well compared to their European peers when it comes to digital commerce.
However, this analysis also highlights significant differences across sectors.
According to the paper, approximately 30% of Irish companies' sales come from e-commerce activity, compared to 20% in the EU and Eurozone.
However, compared to the construction sector, where e-commerce sales are low, the manufacturing and service sectors have a significantly higher share.
“This is a potential avenue for companies to further promote their digital services, as this activity is relatively rarely supported through a company's own website or app,” the study said.
Irish companies outperform their European counterparts across all sizes.
However, the researchers say there are clear differences based on company size, with small and medium-sized businesses having significantly lower digital sales than medium-sized and large companies.
The analysis found that Ireland performs well when it comes to the use of chatbots and virtual agents, big data analytics and machine learning, natural language processing, and service robots.
Around one in five Irish companies report using these technologies, higher than the EU average of 6%.
Again, manufacturing is significantly more heavily utilized than construction in Ireland, but both sectors are significantly higher than their European counterparts.
When it comes to the use of AI, the average usage rate across Irish companies is just under 8%, in line with other EU countries.
In the manufacturing industry, the usage rate is somewhat high at 8.5%, which is higher than in other countries.
“Construction use in Ireland is virtually nil, at just under 5%, significantly lower than in other European countries,” the report said.
“Therefore, if Ireland's construction sector can catch up with average or even better-performing countries, it could benefit from digitalization,” it added.
Authors Karen Hogan, Janeth Crenn and Conor O'Toole found that Ireland had a proportionately higher share of investment in digitalisation than the average for other countries in every year except 2021. discovered.
Between 2018 and 2020, Irish companies dedicated 18-20% of their capital expenditures to digital and IT activities, compared to 13-15% in other European countries.
However, in 2021, Irish organizations' spending fell to 12%.
The highest proportion of investment was in the services and other sectors.
The study also investigated the correlation between barriers to long-term investment and digital activities.
They found that more Irish companies than EU companies report that digital infrastructure is a barrier to long-term investment.
A growing number of businesses, both in Ireland and the EU, are reporting that finding sufficient skilled staff is a barrier.
However, none of these dimensions had a strong correlation with digital investment per employee.
The report says the findings support the continued development of targeted, sector-specific policy approaches that can respond to the challenges faced by a wide range of businesses.
