Coherent legislation critical for tech scaling, finds new Technology Ireland report
A new report commissioned by Technology Ireland, the Ibec trade association representing the technology sector, reveals that while the digital sector now employs 1 in every 8 workers in Ireland (332,000 people), and accounts for 29.4% of total exports (€211.7bn), unnecessary costs associated with regulatory friction is severely harming its future growth.
The report, "Reducing frictions, optimising interplay: Exploring the digital regulatory landscape", produced by Frontier Economics, warns that technology companies are spending an average of 7% of their annual EU-wide turnover navigating resolvable frictions. 85% of surveyed firms state that these compliance barriers have directly impacted their capacity to innovate.
Una Fitzpatrick, Director of Technology Ireland said: “Well-defined legislation is essential to build trust, but today’s regulatory frictions are overshadowing many opportunities, while driving up costs without improving compliance outcomes. With the Irish Presidency of the Council of the EU now underway, Ireland can leverage its honest broker status to facilitate meaningful discussions around better regulation, ensuring European competitiveness remains a core ambition and consideration for member states. Balancing clarity with consistency is the only way to ensure companies of all sizes can continue to invest, scale, and stay in Europe.
“Every single euro an Irish company is forced to spend on navigating fragmented, unclear, or overlapping administrative hurdles is a euro directly diverted away from vital research, development, and scaling. When compliance costs skyrocket in this manner, the primary casualty is the freedom to innovate. Instead of treating regulation and innovation as opposing forces to be balanced, the goal should be to leverage smart regulation as an enabler of a true Digital Single Market.”
Key findings:
- Over one-third (36%) of technology firms saw their EU-wide digital compliance costs surge by more than 50% since 2023 alone.
- On average, 12% of companies' total EU workforces are diverted to compliance activities, leading to delayed product launches (73%), and reduced scope of product features (73%).
- Employment in Irish digitally intensive sectors has grown 57% since 2017, offering average weekly earnings of €1,536 (70% above the national average).
- 89% of technology firms agree that costs would if overlapping EU rules, unclear guidelines, and member-state legal fragmentation were resolved.
You can find the full report here
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