'Digital transformation, smart technologies, ESG, internet of things, artificial intelligence, machine learning, industry 4.0, disruptive technologies' – these are some of the new genres of modern thinking when we consider today's industrial landscape. 

Although the step change to digitisation has not been as precipitous as first envisaged, rapid, steady growth has allowed each sector time to adapt and adopt to new approaches, and we are seeing real value as a result.

Advanced industrial digitisation has the power to reshape how we produce products, how we deliver services, and how we achieve net zero. It is both disruptive and symbiotic.

The development and adoption of industry 4.0 technologies has already been a game changer within multiple sectors, streamlining supply chains, removing redundancies, and maximising productivity.

With significant growth in the development and innovation of new technologies and data driven approaches, digitisation is now becoming an important economic indicator, a benchmark for future industrial development, and a key lever to competitiveness and enhanced economic resilience.

The European Commission has recognised that a robust policy on industrial digital transformation is critical to building upon our strengths in manufacturing, mobility, health and environmental sustainability, reflected in the Horizon Europe framework.  

From a national perspective, where does Ireland stand and what opportunities are available to support the digital journey?

Ireland: performance and opportunity

Nationally, Ireland has consistently punched above its weight in terms of industrial development, particularly evident in the semiconductor, pharma and biopharmaceuticals, medical devices and software and ICT sectors. This is borne from decades of investment to enhance and embed manufacturing capability and develop a highly skilled workforce.

More recently, Ireland has translated manufacturing capability into strategic expertise, evidenced by increased industrial RD&I being performed by multinational companies (MNCs) and indigenous SMEs locally. The presence of both embedded manufacturing and software/ICT industries has created favourable conditions to drive the digital manufacturing agenda.

The net result is that Ireland is well positioned to pursue opportunities arising from the digitalisation of manufacturing(1). Indeed, Ireland is ranked in the top five overperforming countries in the 2022 Digital Economy and Society Index(2)(DESI), alongside Germany and France.

Although DESI captures a broad base of societal digitalisation data, Ireland lies within the top 10 countries under the 'integration of digital technologies' metric, showing that we are on the right trajectory.

The investment within industry to fund their own digital transformation is difficult to quantify. In the most recent figures from the CSO, the total business expenditure on R&D (BERD) in the manufacturing sector was €1.3bn(3). This provides little insight on a granular level.

Data driven production processes

However, in practice, we have seen great strides in the adoption and development of advanced autonomous, integrated and data driven production processes, especially in the highly regulated industries.

The growth within the pharma sector is precipitous, and we have already seen major gains in the cadence of drug development and significant streamlining of very complex production processes. Digitisation and lean approaches are the new symbiotic partners for success.

Supporting industry is a central theme to our national RD&I policy, and it is important that we continue to crystallise action from ambitious plans. Ireland’s research and innovation strategy, outlined in the Impact 2030 report(4) highlights the important RD&I mega trends and sets out support structures to enable digitised industry and advanced manufacturing, ensuring we remain competitive in an uncertain European and global economy.

An important lever to success lies in academic-industry collaboration, enabled at across the technology readiness levels (TRL) scales through the SFI research centres and EI/IDA joint venture technology centres. Coupled with access to funding, these centres are the catalysts to the development of formative, innovative and disruptive digital technologies.

This is compounded by a large pool of funding available through Horizon Europe. The European Commission has housed the digital transformation in the €15bn digital industry and space work package, with a clear focus on advanced digitisation and AI for manufacturing to realise the 2050 green deal. Digitisation will be a critical component to achieving net zero(5,6).

This is a great opportunity, especially given our successful track record in attracting European Commission funding. Indeed, Irish entities have already signed more than 45 Horizon Europe grants within the digital industry and space theme, capturing circa €30m in funding to date.

Considering the Horizon Europe programme is in its infancy; our national outlook is positive if we continue this performance over the seven-year lifetime of the framework.

Opportunities to maximise innovation

Digital manufacturing is holistic, cross cutting, and an important enabler to achieving net zero. It is also incredibly complex and requires significant investment in R&D, with development opportunity across many areas such as advanced sensors, autonomous systems, robotics, AI and ML, augmented and virtual reality, big data analytics, cloud and high-performance computing, and even digital fabrication.

Successful transition to digitisation is a long-term strategy requiring significant short to medium-term buy-in.

Ireland is well positioned to be a digitalisation frontrunner, and there are robust mechanisms to fund the change, such as the R&D tax credit, RD&I grants and the knowledge development box (KDB). It is important to understand what R&D incentives are available, and more importantly, how to maximise the benefits that can support your development work.

Author: Eoin McCarthy, PhD. (In KPMG’s R&D Incentives Practice we have significant experience in identifying the right approach across the varied funding mechanisms and can add value to your RD&I. Go to kpmg.ie/RandD to find out more.


1) 'Study on digitalisation of the manufacturing sector and the policy implications for Ireland', Department of Business, Enterprise & Innovation (DBEI)

2) 'Digital Economy and Society Index (DESI) 2022', European Commission 

3) 'Business Expenditure On Research And Development, 2019-2020', CSO Statistical Release

4) 'Impact 2030: Ireland’s Research and Innovation Strategy', Department of Further and Higher Education, Research, Innovation and Science

5) 'Horizon Europe, budget - Horizon Europe - the most ambitious EU research & innovation programme ever', European Commission.

6) 'Horizon Europe, Work Package 2021-2022, Digital, Industry and Space', European Commission.