Monday, May 20, 2024

Vast majority of Irish tech start-ups embrace AI – survey

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The vast majority of Irish tech start-up and scaling companies are deploying or preparing to deploy artificial intelligence (AI) according to a new survey.

The research from Scale Ireland also shows that finance is still the biggest challenge facing indigenous founders.

The 2024 State of Start-ups Survey reveals that 82% of respondents are deploying or preparing to deploy AI, while 83% believe AI will have a positive impact on their business.

Almost half think it will increase productivity.

“Our findings are very clear on the potential of AI – the founders and CEOs of Irish tech start-up and scaling companies are embracing AI in a big way,” said CEO of Scale Ireland Martina Fitzgerald.

“The vast majority of respondents are overwhelmingly positive about its potential and believe it will have a big impact on their businesses,” Ms Fitzgerald said.

Almost 80% of respondents said they felt it is difficult or very difficult to attract capital, which remains unchanged from last year, reflecting the funding situation.

“At the moment at least this isn’t a uniquely Irish problem,” Brian Caulfield, chair of Scale Ireland told RTÉ’s Morning Ireland. “Over there the past three years there has been a significant decline in the funding available on a global basis.

“In an Irish context, obviously we suffer from the same problems as the rest of the world but in addition to that we’ve a very weak angel capital market in Ireland. Or incentives are not great and we don’t really have a culture for angel investment.”

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Despite those funding pressures, the survey also found that the majority of start-ups are not availing of State supports, like the KEEP share option or the R&D tax credit.

Mr Caulfield said many firms saw availing of them as too much work.

“Over the years they have become more and more complex, to the extent that the Revenue guidance for the EIIS [Employment Investment Incentive Scheme] at this stage are something like 108 pages,” he said. “As a result of that complexity companies often need to employ external advisors to help them navigate the schemes, and for many companies it just gets to a point where they kind of feel it’s not worth the candle.”

The survey also found that two-thirds of start-ups did not have a sustainability plan, despite the growing need for businesses to take a more pro-active approach to their environmental impact.

Mr Caulfield said this was not only an enviromental issue, but it could also pose problems from a fund-raising perspective too.

“Increasingly, investment will come with conditions in relation to sustainability and we’re already seeing venture capital investors say that ‘if you don’t have a sustainability plan or an ESG plan, that you must have one in place within a year of the investment’,” he said.

“So start-ups are going to be pushed, not only by the environmental issue itself, but also by those kinds of factors.”

340 tech start-up founders and CEOs contributed to the survey which is being released to mark Scale Ireland’s third Regional Start-up Summit which takes place in Limerick today.

Scale Ireland is an independent not-for-profit organisation, which represents and advocates on behalf of Irish tech start-ups and scale-up companies.

There are currently more than 2,200 indigenous tech start-up and scale-up companies, employing more than 52,000 people in Ireland.

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