A disappointment for digitalisation and tech skills

Budget 2025 was praised by many in Ireland’s business sector, but was missing specific investments in digitalisation and upskilling in tech.

Yesterday (1 October) SiliconRepublic.com’s team of journalists scoured through the details of Budget 2025 to bring you the top takeaways you need to know.

For start-ups and SMEs, it brought good news in the form of an increase to the first-year payment threshold of the R&D tax credit and a two-year extension to Employment Investment Incentive, the Start-Up Relief for Entrepreneurs and the Start-Up Capital Incentive.

When it comes to climate action, there was an increase in carbon tax, small reliefs in public transport, heat pumps and EVs and more money for long-term infrastructure planning.

And individual workers will see changes to the minimum wage, universal social charge and increase to the standard rate cut-off point.

Along with help for start-ups, the Budget also delivered a participation exemption for foreign dividends, which Daryl Hanberry, a partner and head of tax and legal, at Deloitte Ireland, said will make it easier for multinational tech companies to invest and operate in Ireland.

He also said the change to the R&D tax credit was welcome, but missed an opportunity to go further. “Qualifying R&D activities should be expanded to include AI, blockchain, data analytics and also carbon neutrality.”

Where are the digital skills?

Within the speeches of Ministers Jack Chambers, TD, and Paschal Donohoe, TD, there were also several changes targeting people in higher education, including the National Training Fund, which has a €1.5bn package until 2030.

However, while this fund has been welcomed, there are concerns about the lack of specificity around upskilling for future tech skills and training for the growth of digialisation.

CIPD director Mary Connaughton said she found it “concerning” that there was no direct reference to digitalisation and AI in the workplace. “We look forward to seeing the detail of this package and hope the skills gap is addressed.”

Una Fitzpatrick, director of Technology Ireland, expressed similar concerns. “Advancements in generative AI and transformational technologies promise a cross-sectoral revolution which must be supported by proactive efforts in workforce development and lifelong learning,” she said.

“It is imperative that these funds, which have come from employers’ contributions, are effectively used to boost businesses and their employees and not diverted as a means to address under investment in further and higher education.’’

Fitzpatrick was also disappointed to see no “further ambition in this budget” when it comes to increasing the volume and pace of digitalisation in the delivery of public services.

“The Government must lead by example to bolster state capacity by increasing investment in and procurement of modern digital government and public services.”

Apple tax a boost for data centres?

One word missing from the entirety of both ministers’ speeches was the word technology. And as for the word digital, it was only mentioned by Chambers in relation to securing the electricity grid infrastructure and in reviewing the R&D tax credit – which encourages businesses to invest in research and development.

It’s an unsurprising fact, given that the tech sector suffered from a similar problem in last year’s budget, not to mention the fact that looming elections tend to see governments lean into short-term wins to keep voters happy rather than long-term investments that yield less instant rewards.

But that’s not to say this year’s budget was completely free from Big Tech’s hands. Budget 2025 also hinted at the spoils of the Apple tax bill being divvied out.

The fund is currently valued at €14.1bn. Donohoe said it has been agreed that it should be invested in “infrastructure for the future development of our society”.

“Specifically, water, electricity, transport and housing have been identified as four strategic investment pillars,” he said.

In her newsletter The Briefing, tech and democracy strategist Liz Carolan noted that Ibec’s director of lobbying and influence, Fergal O’Brien, had already warned that Ireland needs “world-class infrastructure, clean, competitive energy, plentiful water supply” to remain competitive.

This comes at a time when tech companies such as Amazon warn that Ireland is missing out on billions in data centre investment compared to other European countries, so this could be the Government’s way of reinforcing infrastructure to make the country appealing for data centres again – despite the immense pressure they continue to put on the grid.

I can’t help but worry that that when it comes to the tech sector, Ireland’s eggs are still all in one basket, ignoring the problems with data centres in favour of the investments they’ve brought us in the past and overlooking the potential that could come from investing in semiconductors, quantum and medtech.

I also find myself hoping the Irish Government will realise the difference between vague promises of training that may or may not include digitalisation, and real investment in niche, deep-tech skills that will be needed for emerging technologies.

From talking to tech leaders, the talent Ireland has is one of the main reasons they set up hubs and manufacturing sites and EMEA HQs. But if the talent well runs dry because we haven’t properly invested in the skills of tomorrow, we may have bigger problems than water supply for data centres.

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