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While there were some positive announcements for the Irish tech sector, a short-sighted view of the future could see Ireland lagging behind in the deep-tech arena, writes Jenny Darmody.
As the dust settles on yesterday’s (10 October) Budget 2024 announcements, it’s time to take a little stock of what the consequences could be.
Yesterday, SiliconRepublic.com’s team of reporters crawled through the details to see what next year’s budget will bring to our readers.
For the start-ups sector, it means reduced capital gains tax rates for angel investors and higher tax credits for R&D. For SMEs, the Government will establish a Tax Administration Liaison Committee (TALC) subgroup to simplify tax reliefs and schemes.
Individual workers will see personal, employee PAYE and earned income tax credits increase by €100 each with the standard rate income tax cut-off point increasing by €2,000 to €42,000. And for those in higher education, the budget included an allocation of €60m to address the “sustainable funding of higher education”.
And while there were announcements of funding for retrofitting, transport and a new climate-related fund, some experts have criticised the lack of clarity or urgency in addressing the crisis.
Budget day is always a tricky task to get right. There’s only so much money in the pot and while we can all talk about badly spent public funds, bloated management salaries and costly mistakes, the budget still must be divvied out to address the national needs as appropriately as possible.
While some industries, bodies and cohorts in society will welcome some of this year’s announcements, the Government has still fallen short on many other areas, many of which are in extreme need, from struggling renters to children in poverty.
It is with these caveats in mind, that I think about the sector in which SiliconRepublic.com is so deeply embedded – science and technology and, more specifically, the emerging tech and next-gen innovations that will help create our future.
‘For too long, the Irish Government has focused on attracting tech companies under that oversimplified umbrella term of just tech’
In the run-up to yesterday’s Budget, there were calls from multiple tech bodies for funds that would help advance Ireland’s digital future.
Una Fitzpatrick, director of Technology Ireland, said it’s imperative that the country doubles down on future-proofing digital innovation, skills, adoption and services throughout the upcoming budgets and beyond. “Ireland has a significant opportunity to enhance its performance in innovation, digital and AI capabilities. This isn’t solely about being a hub for scientific innovation, but ensuring both companies and individuals can adapt to new technologies,” she said.
Unfortunately, a budget that comes right before a general election can often be seen as a way of currying favour with the voting public in the short term rather than putting money into long-term strategies to future-proof the nation’s economy.
Securing a skilled future workforce
A lot of ripples within the sci-tech industry over the last 12-18 months have signalled an important shift in the ecosystem. Following a global shortage, the EU brought in its Chips Act to help protect its semiconductor supply chain and ensure it’s competitiveness on a global scale. ChatGPT and generative AI exploded onto the business world causing ripples across multiple industries, just as the EU AI Act was finalised. And a particularly gruelling ‘tech winter’ saw tech hubs come to terms with the challenges that came with a mass ‘right-sizing’ across the industry.
Having spoken to experts, it’s clear that Ireland has a lot of the tools it needs to continue being a key player in the global tech ecosystem – it already attracts a lot of foreign direct investment, it sits firmly in the EU but with strong ties to the UK and the US, and it has long been considered a strong hub for tech talent. However, not addressing the ongoing skills shortage, particularly in emerging technologies could be a grave mistake.
Digital Business Ireland (DBI) specifically called out a lack of enhanced Skillnet funding for SME training in areas such as AI, web3 and blockchain, adding that the budget may prove to be “a misstep” as other nations prioritise developments in emerging tech.
In June for example, French president Emmanuel Macron announced €40m in funding for French-made generative AI projects. The investment is intended to attract more capital from private investors. “For Ireland to remain competitive in the space, a similar programme would go a long way to aiding local AI start-ups,” DBI wrote in a statement.
Time to dig a little deeper
CIPD Ireland also voiced its concern about a lack of investment in computing and AI skills, with director Mary Connaughton adding it could have “significant implications” for the country.
“We are known the world over for our talented and skilled workforce and with the proliferation of new roles in the tech sector as well as strong international competition, now is not the time to ease off investing in this area.”
This speaks to the lack of forward thinking when it comes to ongoing skills shortages within key technology areas and highlights another problem that has needed to be addressed for quite some time now.
For too long, the Irish Government has focused on attracting tech companies under that oversimplified umbrella term of just tech. This often tends to translate into software development, SaaS and social media platforms, all of which can benefit the country’s economy.
But as the tech industry balloons outwards into every corner of society, it’s time more specific distinctions were made. Deep tech is an ecosystem within an ecosystem, one that needs much more research and development and different kinds of supports, as it faces unique challenges.
It includes, but is not limited to, areas such as quantum computing, AI and deep learning models, semiconductors, clean-tech, biotech advances and other high-tech innovations. Ireland has a lot to shout about in this area, from thriving medtech and space-tech scenes to an impressive semiconductor ecosystem and an unsurprisingly powerful agritech industry.
And while the increased R&D credit rate will incentivise increased activity and spending in the start-up sector – which will no doubt benefit deep-tech start-ups, it’s important to remember the big picture when it comes to ensuring Ireland remains attractive, not just as a tech hub, but as a deep-tech hub.
Following the Budget, Technology Ireland’s Fitzpatrick also expressed her disappointment that digital was barely mentioned throughout the speeches. “Ireland remains the heart of the technology industry in Europe, but we cannot be complacent and must continue to focus on increasing our attractiveness and outpace our competitors,” she said. “Ireland must rise to infrastructure challenges, inflation pressures and address our global competitiveness, while paving the way to future growth, creating diverse talent pipelines, prioritising an ecosystem that embraces innovation and invests in skills and supporting entrepreneurship.”
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