Generative AI could boost economy by €45 billion

Generative artificial intelligence could lead to a €40-45 billion boost in the size of Ireland’s economy over the next decade if fully adopted, according to a new study.

The research finds that two thirds of jobs – equivalent to 1.7 million roles – will potentially be assisted by generative AI.

A further 800,000 roles, or 28% of the workforce, are unlikely to be exposed to automation at all it says.

However, the report says that 150,000 or 6% of positions here are likely to have more than half of their work fully or partially displaced by the automation provided by AI and will need to find new employment.

The estimated cost of the productivity loss arising from this is €1-2 billion, it states.

“These workers are likely to see their jobs fundamentally change and may need to be re-employed in new occupations,” the analysis concludes.

The research was carried out by Implement Consulting Group on behalf of Google Ireland between November of last year and March of this year.

Around 8% of Irish businesses had adopted at least one form of AI by last year, the report finds, on a par with the EU average, but behind other Northern European states like Denmark, Finland and Belgium were adoption is already much higher.

58% of Irish business leaders told the authors that AI has already improved the productivity of their staff.

Just over half claim it has generated new ideas which have already been implemented.

The authors estimate that at its peak, the productivity effect of generative AI in Ireland will be equivalent to 1.4% of Gross Domestic Product each year.

However, they also estimate that if there is a five-year delay in making use of the potential benefits of generative AI, the GDP growth potential falls from 8% or €40-45 billion to only 2% or €8-10 billion.

“Ireland should seek to leverage the national presence of multinational tech giants by incentivising partnerships and mentorship programmes between these corporations and SMEs,” partner at Implement Consulting Group, Martin H Thelle, said.

“This can facilitate knowledge transfer, provide access to advanced AI tools and resources as well as encourage the development of AI-based business models in the start-up ecosystem,” he added.

The report predicts that AI could have the greatest impact on Ireland’s large manufacturing sector, potentially boosting annual productivity growth by 1.2% or €15-16 billion.

SMEs lag behind larger corporations on AI adoption, it also says, with 36% of big firms adopting it in 2023, compared to 7% of SMEs.

A higher share of female workers are estimated to be affected by generative AI than males, both positively and negatively.

The report says that in order to be able to compete with other large economies like the US, Ireland will have to depend on AI initiatives being driven at EU level.

However, it also states that gaps in AI drivers here will need to be filled, in areas like talent, development, commercial and research.

“For the past 20 years, Ireland has been at the forefront of the digital age, embracing new technology and leading innovation in Europe,” said Vanessa Hartley, head of Google in Ireland.

“Today we are at an inflection point and we have an immense opportunity to ensure Ireland remains at the heart of this next transition to AI,” she stated.

In relation to the issue of displacement of jobs, the Google boss said the company wants to make sure it is bringing AI to Ireland in both a bold and a responsible way.

“It is really important that we think about reskilling and upskilling those roles…that might be impacted by AI,” she said.

Minister for Enterprise, Peter Burke, said AI would complement a lot of existing roles but he added that the Department of Finance is producing a report to stress test the labour market to see what areas could be at risk and how that can be responded to in a way that maintains employment growth.

He said there is so much opportunity in AI and we as a country have to work to hive that out and use it to our maximum benefit.

Regarding the impact of AI on Google’s presence in Ireland Ms Hartley said the company continues to invest here and it remains Google’s HQ for the EMEA region.

“We see ourselves continuing to focus on areas of priority such as engineering and this is the largest sales site for Google in the world and will continue to be so,” she said.

However, AI requires data centres and right now there is an effective moratorium on the construction of new ones in the greater Dublin region due to concerns about the capacity of the electricty grid.

Google has a data centre in Dublin and Vanessa Hartley said as AI becomes accessible to consumers and businesses, the company does expect to see demand in its data centre capacity and usage.

“However, Google remains committed to being carbon free by the end of 2030,” she added.

Peter Burke said a position paper in relation to data centres is currently awaited from the energy regulator.

He said certainty needs to be provided around data centre development, “and we will.”

The report was published as Google launched a new AI education pillar through its digital upskilling programme, “You’re The Business”, which is delivered with Enterprise Ireland and the Local Enterprise Offices.