Report reveals vast economic potential of AI

Artificial Intelligence has the potential to contribute at least €250 billion to Ireland’s GDP by 2035, a new report predicts

Catherine Doyle, General Manager of Microsoft Ireland, and Dr Ashish Kumar Jha, Associate Professor of Business Analytics at Trinity Business School and co-author of a report by Microsoft and TCD which found AI is expected to add €250bn to Ireland’s economy by 2035. 

A report produced by the Trinity Centre for Digital Business and Analytics (CDBA) in collaboration with Microsoft Ireland, has revealed that AI has the potential to contribute at least €250 billion to Ireland’s GDP by 2035.

That figure could increase by a further €60 billion depending on how businesses, government, and industry leaders harness AI’s capabilities and implement policies that foster responsible innovation, the AI Economy in Ireland 2025 report found.

Very encouragingly, the research carried out among 300 senior leaders across Ireland found a surge in AI adoption in this country, with 91 per cent of the organisations surveyed claiming to use it, nearly double the 49 per cent level reported in the 2024 study. That level of adoption now puts Ireland ahead of many of its EU counterparts after previously trailing behind.

The study takes quite a broad view of AI adoption, according to report co-author Dr Ashish Kumar Jha, associate professor of business analytics at Trinity Business School. “AI-first organisations are those where AI is central to operations, while other businesses use AI primarily for data-driven decision-making,” he explains. These companies account for 22 per cent of businesses.

When other usage is taken into consideration, including AI being integrated into existing software, such as enterprise resource planning (ERP) or customer relationship management (CRM) systems, or where free public models are used, the figure rises to 91 per cent.

“This highlights that while AI is widely used in some form across organisations, only a minority have embedded it strategically,” says Jha.

To estimate the technology’s economic contribution, Ireland’s GDP for 2035 without AI intervention was projected and the impact of AI as a result of productivity growth through automation and new activities as a result of innovation was added.

“We analysed how AI could automate repetitive and structured tasks across industries, using CSO data to project AI-driven efficiency gains,” Jha explains. “The second factor is technological innovation and AI-led growth. We examined Ireland’s economic growth during the internet boom (1990–2008) and compared it with similar economies. This allowed us to estimate the additional growth AI could bring over the next decade.” 

The potential for an additional €60 billion on top of the €250 billion direct contribution was calculated by analysing how a favourable policy environment — such as investment in AI training, education, and foreign direct investment — could further accelerate growth.

 “We looked at Ireland’s past performance during the tech boom and compared it to similar economies that experienced growth without strong government intervention,” says Jha. “This comparison provided a differential estimate of additional economic gains that proactive policies could generate.”

 There are certain barriers which must be overcome to realise that potential, however. “From an organisational perspective, one of the main barriers is providing employees with the right skills and knowing how to use AI,” says Microsoft Ireland general manager Catherine Doyle who also emphasises the importance of having the right security and AI policies in place to create a safe space for AI adoption.

That feeds into the issue of ‘shadow AI’ — the unauthorised use of AI tools by employees. Doyle points to an interesting approach to tackling the problem taken by Musgrave where the company ran an amnesty programme for staff to come forward to show what AI tools they had been using to do their work, but also to introduce employees to Microsoft Copilot. 

“It helped create a dialogue between the company and employees to understand AI, the risks, and opportunities,” she points out.

The SME sector faces significant challenges in relation to AI adoption. 

“At a national level, the economic potential of AI for Ireland will only be fully realised if AI is adopted broadly across the economy, including SMEs which make up 99.8 per cent of our enterprise sector,” says Doyle. “Providing targeted support to SMEs, to help them overcome expertise and cost barriers, will ensure equal access to AI-driven opportunities.” 

She believes Ireland must take advantage of its strong starting position if the country is to capitalise on the opportunities presented by AI. 

“Ireland is so well placed and stands out with unique advantages which we shouldn’t take for granted — such as a strong tech cluster, prestigious educational institutions, stable political landscape, and talent-attracting reputation,” Doyle notes. “To ensure we don’t lose this advantage, Ireland must move at speed to strategically progress broader AI adoption across all key sectors, accelerated over the next two years, across both large-scale enterprise and SME, as well as across private and public institutions. It’s ours for the taking.” 

For businesses, the first step is to have an AI strategy and policies around its adoption, she advises. “They need to know where they are going and how they want to use AI. Regularly revising their AI policies is also key as the organisation matures.” 

Upskilling is crucial. “Our report identified that 62 per cent of SMEs cite lack of AI skills as the top barrier to adoption,” she says. “Skilling is key to building a workforce that can drive AI adoption across various sectors. A nationwide systematic intervention to support widespread skilling at a national level is needed in the short term to accelerate full adoption at scale. If we look at education, we could adapt curricula and teaching methods to incorporate AI, ensuring students gain the necessary skills without compromising critical thinking and problem-solving skills.” 

Collaboration will be key to success, she believes. “It’s vital that we continue to encourage partnerships between businesses, academia, and government to foster an ecosystem that supports AI innovation and adoption. We should not forget promoting research in AI, collaborating with industry to drive innovation and practical implementations. This could be underpinned by robust policies and regulations that support AI development and use including, creating a conducive environment for AI innovation through incentives and support for research and development.” 

State-supported research will play a key role. “We can see in the UK, US and Australia, AI centres and research programmes based on UNESCO’s AI competency framework and other frameworks. In Ireland, there is a welcome commitment in the Programme for Government to establish a National AI Research Centre. Ireland could seek to offer intellectual and R&D leadership on AI and to become a hub for AI-related jobs and investments through the rapid establishment of the national centre.” 

The benefits of AI adoption are by no means restricted to the private sector. 

“To leverage the advantages of AI, it is essential to facilitate the transition of public sector organisations to modern technological platforms which are essentially, cloud-based,” says Doyle. “This shift will enable more efficient, responsive, and innovative public services.” She cites the example of Derby City Council in the UK, which is undergoing an AI-powered transformation of its services which is expected to save the Council £12.5 million annually. “Their ambition is to free employees for higher-value work, enhance service delivery, and maintain trust with local citizens.”

 “Leading by example is so impactful,” she concludes. “By implementing AI solutions within public services, we can demonstrate their benefits and encourage wider adoption. There is an opportunity to leverage policy commitments like the Action Plan on Competitiveness to drive the adoption of AI tools and deliver productivity across the public and private sectors by cascading the benefits from senior leadership in government to drive new behaviours and outputs linked to AI adoption.”