Irish manufacturing firms lag EMEA counterparts in AI adoption despite recognising profit potential.
Irish manufacturing operations see significant profit potential in artificial intelligence (AI) but are investing less and implementing AI more slowly than their European, Middle East, and African (EMEA) counterparts, according to a new PwC report released today (26 May).
The study, titled ‘AI in Operations – Revolutionising the manufacturing industry’, surveyed over 400 manufacturing executives across more than 30 EMEA countries, including Ireland. It found that while 73% of Irish manufacturing operations expect AI to increase profitability by 2030 (compared to 84% across EMEA), Irish companies are falling behind in actual implementation.
“While the initial focus regarding AI implementation is on operational and productivity improvements, the real interest lies in the potential to disrupt and fundamentally reinvent existing business models”
Only 3% of Irish manufacturing companies have fully integrated AI into their operations, less than half the 8% rate reported by EMEA companies overall. However, 70% of Irish respondents are currently piloting and scaling up AI projects, compared to 55% of their EMEA counterparts, suggesting a potential surge in AI implementation in the coming years.
Keeping Irish manufacturing competitive
“The survey suggests that manufacturing operations can become more competitive as a result of full scale AI adoption,” said Gary Hanniffy, Director of Manufacturing at PwC Ireland.
“A majority of Irish manufacturing operations, consisting largely of pharma, life sciences and med-tech multinational companies, are piloting AI initiatives rather than having moved to scaling and integrating the technology right across their business operations while EMEA companies are more advanced in their implementation journey.”
The financial investment gap is substantial. Only 15% of Irish manufacturing operations invested more than €6 million in AI-related initiatives over the past five years, compared to 41% of EMEA companies. Nearly a third (32%) of Irish operations invested less than €1 million during the same period.
This investment gap may explain why 29% of Irish manufacturers report no business benefits from AI yet, more than double the 14% rate across EMEA. Just 4% of companies in both Ireland and EMEA have realised significant financial benefits and return on investment from AI so far.
Where benefits have materialised, Irish manufacturers report reduced operational costs (60%), improved decision-making (53%), improved operational productivity (50%), and reduced personnel costs (43%) as the top advantages.
The survey identified several key challenges hampering AI implementation, including data quality issues, IT and data security concerns, questions about the reliability of AI-generated content, and data availability problems.
Governance structures also appear to play a crucial role in successful AI adoption. All Irish manufacturers that have fully integrated AI use a centralised AI team for governance, while 76% of those just beginning to pilot AI lack coordinated governance structures.
“While the initial focus regarding AI implementation is on operational and productivity improvements, the real interest lies in the potential to disrupt and fundamentally reinvent existing business models,” said Áine Brassill, Operations Transformation Partner at PwC Ireland.
“AI Agents will make the ability for AI systems to autonomously perform tasks a reality, enabling decision making and delivering real competitive differentiation.”
Brassill emphasised that building trust in AI will be critical for success: “Companies need to be confident in the integrity of solutions that will drive safe and secure AI outcomes. Taking a responsible approach, including upskilling employees, will be critical to getting the most from AI alongside confirming future compliance with regulators and the EU AI Act.”
-
Bank of Ireland is welcoming new customers every day – funding investments, working capital and expansions across multiple sectors. To learn more, click here
-
For support in challenging times, click here
-
Listen to the ThinkBusiness Podcast for business insights and inspiration. All episodes are here. You can also listen to the Podcast on:
-
Spotify
-
SoundCloud
-
Apple