Analyses & Studies
E-commerce activities make up 30% of sales at Irish firms - ESRI
30% of sales at Irish enterprises come from e-commerce activities, compared to 20% in the EU and euro area, new ESRI research has found.
Irish enterprises perform relatively well compared to European peers when it comes to digital commerce, new research by the ESRI finds.
But the analysis also highlights that there are considerable differences across different sectors.
The paper finds around 30% of sales at Irish enterprises come from e-ecommerce activities, compared to 20% in the EU and euro area.
But the share is notably higher among the manufacturing and services sectors than it is in the construction sector, where e-commerce sales are lower.
"Relatively little of this activity is supported through firms' own websites or apps so this is a potential pathway for firms to further their digital offering," the study says.
The performance among Irish firms is better than European counterparts across all sizes of businesses.
But the researchers say there are clear differences between firms depending on size, with small firms having considerably less digital sales than both medium and large sized firms.
In relation to use of chatbot or virtual agents, big data analytics and machine learning, natural language processing, and service robots, the analysis finds that Ireland performs well.
Around one-in-five Irish firms report using these technologies, above the EU average of 6%.
Again, the usage rate in manufacturing is notably higher than in construction for Ireland but both sectors are well above their European peers.
Regarding use of AI, the overall average usage for Irish businesses is just under 8%, the same as other EU countries.
In manufacturing, the level of usage is somewhat larger at 8.5% and is higher than that for other countries.
"The usage for construction in Ireland is virtually zero and is considerably lower than the other European countries at just under 5%," the report finds.
"There is therefore a potential digital dividend which could be leveraged for the Irish construction sector if it can even catch up with the average or better performing countries," it added.
In terms of investment in digitalisation, authors Karen Hogan, Janez Kren and Conor O'Toole found Ireland has a higher rate proportionally than for the average of other countries for all years except 2021.
Between 2018 and 2020, Irish firms committed 18-20% of capital spending on digital and IT activities, compared to 13-15% for other European countries.
In 2021, though, spend dropped to 12% among Irish organisations.
The share of investment has been highest in the services and other sectors.
The study also looked at obstacles to long-term investment and their correlation with digital activities.
It found more Irish firms report that digital infrastructure is an obstacle to long-term investment than EU counterparts.
There is also an upward trend in firms reporting finding sufficiently skilled staff as an obstacle, both in Ireland and in the EU.
But neither of these aspects were strongly correlated with investment per employee in digitalisation.
The report says the findings support the continued deployment of a sector-specific targeted policy approach that can cater for challenges faced by different firms.
