New research from Trinity College Dublin in collaboration with Microsoft Ireland finds a widening AI maturity gap among Ireland’s small and medium-sized enterprises that, if left unaddressed, risks constraining national productivity and growth.
The AI Economy Ireland 2026 report, the third in an annual series tracking how AI adoption and organisational readiness are shaping economic capacity nationwide, finds that AI adoption is now near-universal with 92% of organisations using or planning to use AI.
Despite this, just 10% of leaders describe their deployment of AI as advanced or frontier-level, and SMEs remain disproportionately concentrated at the early stages.
'Biggest Gains'
"While large organisations race ahead, too many SMEs are still at the starting line, and the confidence gap among women in leadership tells us the skills challenge goes beyond technical training," said Catherine Doyle, general manager, Microsoft Ireland.
"Widespread adoption is what unlocks the biggest gains – and it's where the real opportunity begins. The next step is using AI not just to do today's work faster, but to build new products, enter new markets and create value we couldn't create before.”
SMEs that invest in AI are more likely to report significant productivity gains than large organisations (18% vs 8%), a sign that, where SMEs do commit, the returns are real. But too few SMEs are making that investment. Given that SMEs account for more than two-thirds of all employment in Ireland and contribute over 40% of gross value added, the economic stakes are significant.
The report shows a persistent AI readiness gap that is already translating into uneven business outcomes between large firms and SMEs. Large firms are more than twice as likely to deliver weekly time savings of two hours or more per employee (54% vs 25%), and SMEs are more than twice as likely to have no formal AI training in place (15% vs 6%). Left unchecked, this divide risks becoming a structural drag on the country's productivity and growth.
Gap
This gap matters because even modest levels of AI adoption are already delivering measurable gains in day‑to‑day work. A typical mid-sized organisation in Ireland is freeing up to 1,000 hours a month through everyday AI use, driven by reduced time spent on meetings, email and routine administrative tasks. For large multinational organisations operating here, this rises to up to 5,000 hours per month.
Importantly, the impact extends beyond organisational efficiency, with clear, direct benefits for leaders themselves. 70% of leaders report a reduction in overall workload pressure, while one in three say AI is making it easier to switch off from work. A further 26% report reduced evening or weekend work.
'Major Productivity Gains'
AI is firmly embedded in day-to-day operations, and Ireland is among the leading AI-adopting economies globally,” said Professor Ashish Kumar Jha, ADAPT Centre, Trinity College Dublin.
“The competitive advantage will come from how quickly organisations move from early deployment to scaled, governed and value-driven AI adoption. The levers are clear: organisations with a formal AI policy are ten times more likely to report major productivity gains, and SMEs that do invest in AI capability report higher rates of significant productivity gains than large firms. Closing the maturity gap between large organisations and SMEs will be essential if Ireland is to translate widespread AI adoption into durable, economy-wide productivity gains.”
Economic Impact
While efficiency gains are important, they represent only the first phase of AI’s economic potential. International evidence already suggests the biggest returns come not from doing today's work faster, but from using AI to create new value through innovation, new products and growth.
However, the findings show that many organisations have yet to redesign workflows, governance or operating models to capture these gains at scale. Ultimately, the next phase of economic impact in Ireland will depend on whether organisations use the time freed up by AI to drive innovation and growth, not just efficiency.
