40% Of Irish Companies 'Completely Lack Digital Assets'

Up to 40% of Irish companies 'completely lack digital assets' and lag behind other countries in e-business, according to a report by the European Investment Bank.

Minister for Trade, Employment, Business, EU Digital Single Market and Data, Pat Breen, today formally accepted a report entitled – The Digitalisation of small and medium enterprises in Ireland – from Andrew McDowell, Vice President of the European Investment Bank.

The report, a collaborative project between the Advisory Hub of the European Investment Bank and the Department of Business Enterprise and Innovation, investigates how to increase digital technology diffusion among Irish SMEs, especially in traditional sectors.

The report highlights that almost 40% of traditional Irish indigenous companies completely lack digital assets and Ireland lags behind leading countries in terms of e-business processes and e-business technology adoption. The project also found a limited appetite from traditional Irish SMEs for digital investment in products, process or business models due to the existence of market failures in relation to accessing finance and awareness of the benefits digital technologies can bring.

Welcoming his European Investment Bank colleagues to Ireland Minister Breen said, "I'm very pleased to formally accept this very timely study from the European Investment Bank.We know digital technologies are becoming increasingly disruptive and they offer potentially huge opportunities for SMEs to grow, scale and find new markets."

Minister Breen also pointed to the cost savings that digitalisation can bring. He said: "The increased operational efficiency associated with digitalisation reduces costs and improves competitiveness for individual SMEs. From a macro perspective, the widespread diffusion of digital technologies will serve to improve Ireland's productivity and protect its competitiveness from unsustainable cost growth."

Andrew McDowell, European Investment Bank Vice President, said: "Enabling business to harness digital technologies is crucial to expand into new markets, develop new products, create jobs and compete globally. The new joint European Investment Advisory Hub – Innovation Advisory report highlights Ireland's leading role adopting online trading and outlines how increased investment in digitalisation of manufacturing and services can create skilled jobs. The European Investment Bank looks forwarding to supporting implementation of measures outlined by the report and further increasing innovation financing for companies across Ireland.

The report recommends that the Irish Government adopt measures ensuring:

• the benefits of digitalizing traditional sectors of the economy are well understood by different stakeholders; and

• traditional SMEs that are willing to seize digital opportunities have access to adequate funding.

Recommendations from the report are already being used to strengthen digitalisation best practice in three other EU countries.

Supporting SMEs in terms of access to finance has been a cornerstone policy for Government in recent years and Government policy remains focused on ensuring that all viable SMEs have access to an appropriate supply of credit from a diverse range of bank and non-bank sources. 

On this, Minister Breen said: "In light of the continuing commitment to ensuring SMEs have appropriate access to credit, I am delighted to announce that the Department of Business, Enterprise and Innovation is in the process of developing a pilot scheme aimed at addressing the difficulty that SMEs have in accessing finance in order to obtain the benefits of digitalisation.

"The development of this pilot, combined with the Future Loan Growth Scheme to be launched in the coming weeks, are targeted Government of Ireland measures to address a clearly defined market failure in that they will provide competitively priced finance on favourable terms to eligible SMEs."