Ireland's Innovation Index · 2023
The baseline: investment was rising, but budget and talent constrained delivery.
In the inaugural Index, 80% of respondents expected research, development and innovation (RDI) investment to rise over the following three years. Budget, talent and the administration involved in accessing supports shaped the policy agenda.
Who responded
Respondent profile.
Ownership
64% Irish-owned and 36% foreign-owned.
Largest sectors
Engineering/technology 18%, software/ICT 17%, medical and health 15%, and manufacturing 14%.
RDI teams
57% had 1–10 people directly engaged in RDI; 25% had 11–50.
Finding 1 · Investment
RDI spending had risen—and expectations were stronger still.
Sixty-eight per cent reported higher RDI spend over the preceding three years. Eighty per cent expected an increase over the following three. These are separate retrospective and forward-looking questions.
View the data table
| Category | Value |
|---|---|
| Past three years · increased | 68% |
| Next three years · expect increase | 80% |
Base: respondents answering each question; exact valid base not published. The executive summary gives 67% for the first value; the detailed chart gives 68%, used here. Source — 2023 report, p.14
Finding 2 · Direction
Companies were focused on products, improvement and new business.
Product innovation was the most frequently reported activity. Improving existing products or services and developing new business areas or models were prominent priorities.
View the data table
| Category | Value |
|---|---|
| Product innovation activity | 84% |
| Improve existing products/services | 77% |
| Develop new business areas/models | 67% |
Multi-select questions. Activity and future-priority measures are shown together for orientation, not as one scale. Source — 2023 report, pp.5 and 10
Finding 3 · Delivery barriers
Budget and recruitment were the clearest constraints.
Nearly half selected limited budget, while 46% reported difficulty recruiting key talent. The findings describe reported barriers, not their financial effect.
View the data table
| Category | Value |
|---|---|
| Limited budget | 48% |
| Recruitment of key talent | 46% |
Multi-select question; exact valid base not published. Source — 2023 report, p.5
Finding 4 · Supports
Respondents associated support with more R&D and employment.
The R&D Tax Credit was the most commonly used support. Respondents attributed more R&D, employment and internal investment to the supports they accessed; these are reported effects, not an independent causal evaluation.
View the data table
| Category | Value |
|---|---|
| Allowed more R&D | 64% |
| Supported more employment | 52% |
| Encouraged internal investment | 44% |
Multi-select question; wording reflects respondent attribution. Source — 2023 report, pp.15–16
Finding 5 · International position
Multinational respondents described material reliance on the credit.
Among relevant multinational respondents, 69% rated Irish supports equal to or more favourable than other locations. Fifty-eight per cent said no more than half of their Irish R&D would occur without the credit.
View the data table
| Category | Value |
|---|---|
| Supports equal or favourable | 69% |
| No more than half of R&D without RDTC | 58% |
Subgroup finding. The RDTC counterfactual is based on 131 multinational respondents; the comparison base is not stated. Source — 2023 report, pp.18 and 20
Finding 6 · Green innovation
A higher green-technology rate attracted broad support.
Seventy-nine per cent said a 50% credit rate for green and sustainable technology would increase investment. This is a stated response to a hypothetical incentive, not evidence of realised investment.
View the data table
| Category | Value |
|---|---|
| Yes | 79% |
| Unsure | 19% |
| No | 2% |
The executive summary says 78%; the detailed chart and body say 79%, used here. Source — 2023 report, p.17
What IRDG and KPMG asked for
The 2023 recommendations, as published.
Reproduced as published. Source — 2023 report, p.30. This page preserves the evidence and recommendations as published in 2023. Tax law and programme rules may since have changed; it is not current tax advice.
Raise national R&D investment
Raise government R&D expenditure to 0.8% of modified gross national income (GNI*) and target combined gross expenditure on R&D (GERD) of 3% of GNI* within three years.
Recommendation 1Clarify qualifying-purpose wording
Amend the then section 766 wording from expenditure incurred ‘in the carrying on’ to ‘for the purposes of’ R&D.
Recommendation 2Increase the outsourcing allowance
Set the allowable third-party amount at the greater of 25% of non- outsourced R&D expenditure or €250,000.
Recommendation 3Raise the credit for the first €1m
Increase the relief to at least 35% for the first €1 million of qualifying R&D expenditure.
Recommendation 4Create a green R&D rate
Introduce a 50% R&D Tax Credit rate for qualifying green-technology R&D.
Recommendation 5Add a green innovation grant
Create a grant specifically supporting innovation in green technology.
Recommendation 6Consider a green super-deduction
Introduce a green-technology super-deduction, suggested in the report at 150%.
Recommendation 7IRDG's reading of it
What the 2023 evidence meant.
The inaugural Index established a strong investment signal, but also a practical policy problem: ambition would not translate automatically into delivery while finance, skills and access friction remained unresolved. This is IRDG interpretation, shown separately from the survey findings above.
What changed since publication
Progress against recommendation 4.
The 2023 edition asked for the R&D Tax Credit rate to rise to at least 35% for the first €1 million of qualifying expenditure. Finance Act 2025 legislated a 35% rate for accounting periods whose specified return date falls on or after 23 September 2027 — generally accounting periods ending 31 December 2026 or later. Earlier periods remain at 30% or 25%. IRDG was one of many bodies making that case; the ask, its date and the outcome are on the record, and no more than that is claimed. The other six recommendations are recorded here in their original 2023 form and are not rewritten in light of later events.
Data notes and corrections
What this edition does and does not establish.
Published so that anyone reusing these figures knows their limits. Where the report contradicts itself, the contradiction is recorded rather than resolved silently.
Note 1
This was a cross-sectional survey of companies active in RDI, not a nationally representative panel.
Note 2
Most question-level valid bases are not published. Two subgroup questions identify bases of 131 multinational and 121 SME respondents.
Note 3
The detailed RDI-headcount chart says 57% had 1–10 people directly engaged in RDI; the executive summary says 58%. This page uses the detailed chart.
Note 4
The source contains discrepancies: 67% versus 68% for past investment, 78% versus 79% for green R&D, and a reference to six recommendations although seven are listed.
Note 5
Multi-select percentages can exceed 100%. Respondent-reported effects of supports should not be read as causal estimates.
Citation
IRDG and KPMG (2023), Ireland’s Innovation Index 2023, Dublin: Industry Research & Development Group.
The publication
Read the 2023 report in full.
Everything on this page is drawn from the published report — 394 responses, 365 completed, fieldwork 27 April to 19 May 2023. The PDF carries the full charts, the question wording and the methodology note.
Ireland's Innovation Index is produced by IRDG with KPMG. This is the baseline edition.
Data, corrections and media
Spotted something wrong, or need the underlying data?
If a figure here does not match your copy of the report, tell us and we will check it and publish a correction. We also take media and data-reuse requests through the same route.