Skills shortages top constraint for Irish tech leaders as AI investment surges and cyber concerns escalate 

• Over one third of tech leaders in Ireland (36%) cite talent gaps as the most significant barrier
• AI adoption widespread, 82% say they are investing in AI today, up from 44% last year
• Cyber resilience is under intensifying pressure, with almost half (48%) saying data leakage through GenAI tools the biggest cybersecurity concern, and under one in three (31%) saying they are well prepared for AI-enabled cyber risk exposure
• Budgets look stable, but pressure to do more with same budget is rising
• About 30% cite budget limits as a key challenge, up from 19% last year

Irish technology leaders are accelerating investment in AI, but many organisations are now encountering a new constraint: capability, not capital. That’s according to the fifth annual Tech Leaders Outlook Survey 2026, which surveyed 150 senior technology leaders – Chief Technology Officers (CTOs) and Chief Information Officers (CIOs) - from a range of sectors* across the country.

The research finds that while AI investment has become mainstream, the ability to execute is being impacted by skills shortages, internal capacity constraints, delivery risk, rising cyber pressures and transformation challenges, even as budgets remain broadly stable for many organisations. This points to a shift from experimentation to execution, where the challenge is less about whether to invest in AI and more about how to deliver it at scale.

Skills shortages deepen

The biggest execution constraint reported by tech leaders in Ireland is people, skills and capability. More than a third of technology leaders (36%) cite a shortage of skilled employees as the most significant barrier to executing their agenda, up significantly from 24% last year.

Skills shortages are concentrated in emerging and highly specialised domains, most notably AI. By contrast, demand for more traditional IT skillsets has eased following the post‑pandemic hiring surge.

Past tech cycles show it often takes five to eight years for talent to catch up to the technology and so continuous AI skills development will be key for all workers in Tech.

Concerns about internal capacity are also rising, with 16% now citing insufficient internal capability to drive change, compared with 6% last year. At the same time, succession planning and talent development have moved up the IT leadership agenda, identified as a priority by 18% of respondents, up from 5% last year.

From a workforce impact perspective, the findings suggest AI is not yet driving widespread hiring reductions. When asked, only 6% believe AI adoption will reduce recruitment, while 3% contend it will drive an increase. 84% anticipate no impact on recruitment levels.

AI investment is rising fast, but capability is lagging

The research finds a step change in AI investment over the past 12 months, indicating a broader shift from experimentation to execution, where the challenge is less about whether to invest in AI and more about how to deliver it at scale.

82% of respondents say they are currently investing in AI, up from 44% last year. 37% say they have an AI strategy, and a further 45% are exploring AI’s possibilities.

AI is being deployed most commonly to drive productivity and effectiveness, rather than cost reduction or more fundamental Agentic business transformation. Almost half of organisations have deployed employee productivity tools (49%), while 28% are using industry-specific AI solutions, 18% are using customer engagement tools like chatbots, and 16% have adopted data analytics and decision intelligence support.

Encouragingly, most organisations are already seeing tangible outcomes from their AI investments with just one in five respondents reporting they have yet to see meaningful value. The benefits most commonly cited relate to improved productivity and efficiency and enhanced customer experience. Improved decision‑making and access to industry‑specific AI capabilities are also emerging as areas of value. Cost reduction through automation appears far less prominent, cited by just 7% of respondents.

Nearly one in five leaders (19%) now flag an inability to adopt AI fast enough as a key concern, up from 12% in 2025.

Budgets may be stable, but the squeeze is real

On the surface, sentiment on IT budgets is more positive than last year. 36% expect budgets to rise by 3% - 9%, while 11% anticipate an increase of more than 10%. Almost half (46%) expect spending to remain broadly in line with the previous year.

However, budget limitations have emerged as a more pressing concern, with almost 30% citing limited budgets as a key challenge, up from 19% last year, reflecting pressure as resources become pre-committed and discretionary spend tightens.

Ronan Walsh, Head of Technology Consulting at EY Ireland, said: “While there has been much recent discussion on job displacement in Tech, our research finds that the single most significant barrier to Irish technology leaders executing their agendas right now is the shortage of skilled employees to implement new technologies or progress complex transformation programmes.

This points to a more nuanced reality that while AI adoption is accelerating, most organisations are struggling to find the talent they need to make AI work in practice. AI specialists are in short supply and training cannot keep pace. In many cases, technology leaders are being asked to work miracles, balancing rising expectations with limited capacity, and being more creative than ever in how they allocate resources while maintaining a clear focus on value and return on investment.

Tech leaders across all industries are navigating a period of profound change, balancing transformation and AI agendas with the need to keep their organisations secure and running smoothly. As they modernise legacy environments, strengthen data foundations and manage rising cyber risk, the challenge is delivering change that is secure, practical and sustainable within constrained budgets. The organisations that will pull ahead will be those that lean into this AI-enabled transformation opportunity and invest in people, tech, governance and their ability to deliver.”

Irish organisations favour cautious transformation

Despite rising expectations and the promise of Agentic AI, most organisations are pursuing measured change. Only 4% describe their approach as aggressive enterprise transformation, while 41% are pursuing incremental transformation. A further 33% favour cautious, risk-managed change, and 21% are primarily maintenance-focused with limited appetite for change.

This cautious lens suggests organisations are trying to balance value creation with resilience in an environment marked by volatility, cost pressure and disrupted markets, while still maintaining momentum where it matters most.

Cyber resilience is the priority, but preparedness is uneven

Cybersecurity capability is identified as the area most in need of investment over the next two years. It is also both an investment priority and a critical operational challenge. One‑third (33%) of technology leaders identify cybersecurity as a key concern, while 17% point to weaknesses in data management. Data governance is also moving up the agenda, with 11% citing it as a priority investment area.

The preparedness picture is mixed. 31% say they are aware and well prepared for AI-enabled cyber risk exposure, 21% say they have limited awareness but some response capability, 36% say they are aware but not prepared, and 12% say they are neither aware nor prepared.

When asked about the single biggest cybersecurity concern in the age of artificial intelligence, 48% cite data leakage through GenAI tools as the single biggest concern. Other risks cited include AI-driven automation of cyberattacks (38%), exposure of intellectual property or sensitive data (26%), AI-enabled phishing and social engineering (23%), and deepfake-enabled fraud (20%).

Carol Murphy, Head of Markets, EY Ireland, said: “Businesses are operating in a more volatile and a faster paced world than ever before. For tech leaders, that means attempting to keep pace with AI developments, safeguarding against cyber risk, and dealing with intense competition for talent — simultaneously, and at pace. This research explores how they are navigating with confidence in this unprecedented environment: where they feel well-positioned, where they feel exposed, and how they are plotting the path forward.”

To view the full report please visit: https://www.ey.com/en_ie/insights/consulting/why-capability-not-capital-will-define-technology-leadership-in-2026

ENDS

About the Survey
*The EY Ireland Tech Leaders’ Outlook Survey 2026 was conducted during March and April 2026. The study was conducted using Computer‑Aided Telephone Interviews (CATI) with 150 senior technology leaders across Ireland, including individuals with strategic decision‑making accountability, technology or data responsibilities, and innovation or transformation leadership roles. The survey encompassed a diverse range of sectors that included Government and Infrastructure, Consumer and Health, Industrial and Energy, and Telecommunications and Technology.