Future Proofing Talent Supply in the IrishTech Start-up and Scaling Sector
Exeutive Summary
Indigenous tech start-ups and scaling companies have been targeted as a key area for national growth. This report highlights that while Ireland’s indigenous tech sector is experiencing significant growth driven by digital transformation, challenges persist in developing a sustainable talent pipeline to meet current and future skill demands.
While it is difficult to formally define and scope the size and output of the indigenous start-up and scaling tech sector, we identify some indicators. TechIreland estimates that there have been 4,165 new companies formed on the island of Ireland in the sector between 2015 and 2025. The sector is estimated to employ just under 40,000 people as of 2025. Of these 4,165 new companies in the sector, almost 10% (393) are female founded and over 50% are lo-cated outside the greater Dublin area. These companies operate across sectors but enterprise solutions, ICT, healthtech and fintech are the largest subsectors of activity. Enterprise Ireland, as the prominent investor in these young companies, estimates that over 23,000 people in 2024 are employed in digital technology companies supported by that agency and estimated total added value of these companies is almost 2.4bn, or €124,000 per person employed.
Proposals and Recommendations
Ireland performs admirably on several global comparisons of talent competitiveness. Illustratively, Ireland was ranked 17th on the 2024 IMD World Digital Competitiveness Ranking. Key strengths include employer training, higher education achievement and females with degree education. However, concerns include a ranking of 62nd globally in overall investment in education and 43rd for total investment in R&D. Similarly, Ireland ranked 12th in INSEAD’s Global Talent Index. Ireland excelled in its ability to attract talent, ranking 5th and in terms of openness to diversity and empowerment of women. However, concerns included the development of vocational and technical skills (23rd) and mid-level skill development (46th).
The wider ICT sector, including indigenous tech and scaling firms, in Ireland has experienced considerable growth in recent years. This sector is to the fore of the AI revolution in Ireland with high levels of deployment of AI. Employment in the sector is robust and growing, with some 182,900 employed in Q4 2024. The sector is highly reliant on migration to meet skills demands, with 40% of employees non-Irish nationals. Additionally the sector has a low level of female employees with women making up only 25% of the workforce.
Current Skills Demands
While Ireland performs admirably on several in-ternational indicators of talent competitiveness, our analysis also identifies several areas of concern. The ICT sector faces acute skill shortages in areas including software development, AI, cybersecurity, DevOps, and data analytics. There is also strong demand for transversal skills such as leadership, problem-solving, adaptability, and analytical thinking. Smaller businesses (SMEs) par-ticularly struggle to compete for skilled ICT pro-fessionals.
Future Skills Needs
To maintain competitiveness organisations need to proactively plan for emerging skill demands. Our baseline analysis of growth projections predicts an additional 89,590 positions in ICT by 2030. This will result in significant challenges from a supply perspective. However, the skills profile is also likely to change with significant additional demand for AI and machine learning skills, and network, cybersecurity and technological literacy also expected to see significant growth in demand. Demand for AI and machine learning specialists is expected to increase significantly. Furthermore, regulatory and ethical compliance in AI and digital policies will require specialized professionals. The importance of transversal skills is also a key consideration.
Talent Supply Challenges
Despite Ireland’s strong performance in delivering ICT graduates compared to EU norms, we expect that current supply will be insufficient to meet demand projections over the coming years. We identify several key actions that are recommended to meet the emerging talent requirements of the indigenous tech start-up and scaling sector.
Traditional labour market forecasting, which relies on historical data, is no longer sufficient in the face of rapid technological advancements. Modelling needs to incorporate external data, sectoral and organisational data to provide nuanced insights. This modelling should be dynamic and regularly updated. Firms should incorporate external data in their modelling.
Reskilling and upskilling of employees is likely to be critical. As skills evolve some skills will reduce in importance while others will emerge or become more valuable. Organisations must invest in continuous learning, upskilling and reskilling to meet emerging skills needs. A key risk is that SMEs including indigenous tech start-ups and scaling companies are less likely to have a talent development strategy in place. Sectoral level initiatives will be critical to upskilling and bodies such as Skillnet Ireland are likely to play a key role in this regard.
It is unlikely that third level institutions alone will provide sufficient supply to meet the growing skills demands of the ICT sector. We recommend a greater focus on other routes to entry to the labour market such as apprenticeships. However, to date there has been a slow update of apprenticeships in the ICT sector. SOLAS will play a key role here.
Migration has been critical to meet skills needs in the wider ICT sector with non-Irish nationals accounting for some 33% of ICT employees. Thus, the ongoing role of migration is critical to skills supply in the future. We note a fall in the number of employment permits issued in 2023 as a concern. We point to the importance of targeted global messaging about employment opportunities and the importance of an efficient employment permit system is critical. Barriers to international migration include high personal tax rates, cost of living, personal safety, and infrastructure particularly housing and transport.
Finally we also see significant potential in growing the diversity of employment in the ICT sector. Notwithstanding indicators of a strong commitment to inclusion and the empowerment of women, female employment in ICT remains relatively low. Initiatives aimed at increasing female participation and increased employment of other underrepresented groups offer a key means of increasing talent supply.
