AI Adoption Outpaces Cybersecurity Readiness: What the EU’s New Digital Decade Report Tells Irish Businesses 

The European Commission has published its 2026 Digital Decade country report for Ireland, and the findings offer a useful reality check for Irish manufacturers, food and drink businesses, and SMEs weighing up their next steps on AI and digital transformation. 

Published in June 2026, the report assesses Ireland’s progress against the EU’s 2030 digital targets. The headline picture is familiar to anyone tracking Irish enterprise digitalisation: strong fundamentals, but an uneven translation of those strengths across the wider business base. 

AI adoption gather pace, but SMEs still trail

Ireland’s AI adoption among enterprises reached 19.64% in 2025, up from 14.9% the year before, a jump of nearly 32%. That puts Ireland roughly level with the EU average of 19.95%, though the country is actually behind its own national roadmap target for this measure. 

The more telling number is the split by company size. Among large enterprises, 57.27% now use AI, comfortably ahead of the EU average. Among SMEs, that figure drops to just 18.34%, slightly below the EU average of 18.9%. This is the pattern the report keeps returning to: Ireland’s aggregate numbers look healthy, but the benefits are concentrated in larger, often foreign owned firms, while smaller domestic businesses risk being left behind. 

Cloud, data and the diffusion problem

Cloud adoption is one of Ireland’s genuine strengths, at 63.03% of enterprises versus an EU average of 46.69%. Data analytics adoption sits at 40.79%, just ahead of the EU’s 39.85%. Taken together, 71.74% of Irish enterprises now use at least one of AI, cloud or data analytics, close to the 75% target set for 2030. 

The catch is momentum. Ireland’s annual growth rate in these areas is consistently slower than the EU average, even though it started from a stronger base. The Commission’s assessment is blunt: Ireland’s challenge isn’t weak uptake, it’s the risk that its current lead narrows if adoption doesn’t deepen further across the broader SME population. 

Cybersecurity is the weak link

If there’s one area where Irish businesses are genuinely behind, it’s cybersecurity. Only 40.85% of Irish enterprises use at least five ICT security measures, against an EU average of 56.85%. The gaps are widest in some fairly basic areas: data backup to a separate location, network access controls, VPN use, incident log monitoring, risk assessment and security testing. 

As more Irish businesses adopt AI and cloud tools, this gap matters. The report notes that cyber resilience is becoming more important precisely as firms take on more data driven and AI enabled processes, and that smaller firms face the greatest capability and investment constraints in closing it. 

Semiconductors and scale up finance

Ireland’s semiconductor sector remains a genuine strength, with over 80 companies and 27,000 jobs anchored by facilities like Intel’s Fab34. But the report flags a familiar constraint for indigenous firms and start-ups: limited access to venture capital, commercialisation support and specialised skills. 

The wider start up and scale up picture tells a similar story. Ireland’s unicorn count grew by just one in the past year (17 to 18), against 10.2% growth across the EU. An estimated 1.1 billion euro equity financing gap over the next three to five years is flagged as a real risk, one that could see promising Irish firms relocate abroad or get acquired early rather than scale domestically. 

The Takeaway for Irish businesses

For manufacturers, food and drink producers and SMEs more broadly, the report reinforces a message we’ve been hearing consistently through 2026: AI and cloud adoption is accelerating, but the gap between larger and smaller firms is real, and cybersecurity readiness needs urgent attention as digital footprints grow. Ireland has the infrastructure and ambition. The open question is whether smaller, domestically owned businesses can close the adoption gap before it becomes a lasting competitive disadvantage. 

The full Digital Decade 2026 Ireland country report can be downloaded from the European Commission here: https://digital-strategy.ec.europa.eu/en/library/digital-decade-2026-country-reports