Irish enterprise investment in AI and digital transformation is growing steadily. The IRDG/KPMG Ireland Innovation Index 2026, published in June 2026, finds 67% of companies rank AI and disruptive technologies among their top priorities, up from 45% two years ago. The R&D tax credit, raised to 35% in Budget 2026, is stimulating investment. The opportunity is to extend that stimulus to the fastest-growing innovation forms: digital transformation, design-led innovation, and new business models.

The case rests on clear employer mandate. The IRDG/KPMG survey finds 71% say a specific credit for AI, digitalisation, and design would enable more innovative work and 71% say it would support new product and service development. The current R&D framework requires activity within defined science and technology categories, structurally excluding the investment most Irish enterprises are making today. Closing that gap is the most direct fiscal lever to accelerate digital transformation.

Enterprise investment intent is running ahead of fiscal support. The EY CFO Survey Ireland 2026 finds 59% of Irish CFOs prioritise AI and technology infrastructure investment, and 94% expect growth in 2026. The KPMG Global Tech Report 2026 confirms 89% of Irish organisations say technology is improving investment value. Finance leaders are ready to commit capital to digital transformation; a qualifying credit would increase the scale and depth of that commitment.

The IRDG/KPMG findings reveal an IP and design opportunity. Ireland ranks 26th of 27 EU members for design applications and last for trademarks, yet 45% say an Innovation Tax Credit would directly support increased IP creation and protection. The National Digital & AI Strategy 2030 establishes an AI Research Centre of Scale and a Regulatory Sandbox for commercialising digital innovation. A dedicated credit would accelerate the IP pipeline those instruments exist to generate.

Broadening relief to cover digital transformation would benefit SMEs most. The EU Digital Decade 2025 Ireland Country Report confirms SME digital intensity stagnated in 2024, with only 39% reaching high digital maturity against Ireland's 90% target for 2030. Firms whose digital investment falls outside science and technology definitions are precisely those the credit could unlock. The Digital Transition Fund provides grant support; a tax credit would complement it with a permanent, scalable structure.

Three actions should define enterprise strategy. First, finance leaders should audit digital transformation, design, and process innovation spend falling outside current R&D credit qualification and model the value of a 35% credit against that pipeline. Second, technology leaders should engage IRDG and Enterprise Ireland to ensure firm-level digital transformation priorities shape the credit's design. Third, align transformation roadmaps with the AI and IP commercialisation infrastructure being built under the National Digital & AI Strategy.

The IRDG/KPMG Innovation Index 2026 establishes the strongest employer mandate for innovation tax reform in years. With 67% prioritising AI and digital technologies and 71% backing a dedicated credit, the policy direction is clear. For enterprise leaders, the opportunity is to quantify their digital transformation investment pipeline, engage the policy process, and position to capture the fiscal return on innovation investment already under way.

(The views expressed by the writer are his/her own and do not necessarily reflect the views or positions of BusinessRiver.)