The latest KPMG Enterprise Barometer found a surge in confidence levels among Ireland’s private business leaders with 79 per cent seeing increased demand for products and services, up from 45 per cent at the start of the year. This confidence is driving increased plans to enter new markets, but the report indicates that people, over technology, remain the investment priority. The report captures the views of more than 100 key decision-makers and entrepreneurs and offers a timely snapshot of business sentiment, as well as a call to action for policymakers to ensure a prosperous future for private enterprise.
Our country needs entrepreneurs more than ever before - they build more than just companies; they create jobs, contribute significant amounts of tax to the exchequer, foster innovation, and invest in and strengthen their communities. We should not be shy about championing business and the success of our businesspeople. Their commitment to their companies and their people fuels sustainable growth, preserves cultural identity, and ensures economic independence from the ground up.
Confidence drivers
Our research finds the majority (79 per cent) of Ireland’s private businesses and entrepreneurs are confident in their growth prospects for the coming year, even with rising costs (especially labour costs), talent retention, geopolitical impacts and tariffs. These factors increase uncertainty for entrepreneurs already navigating a complex landscape underpinned by rapid digital transformation and heightened demands to address risks and opportunities posed by sustainability and AI, and the threats arising from cybersecurity.
This confidence is driven primarily by increased customer demand for products and services, cited by nearly eight in 10 companies as the key factor supporting growth, a significant rise from 45 per cent in January 2025, as concerns at the start of the year have eased.
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Other factors contributing to this confidence include plans to enter new markets or launch new products (57 per cent), and the introduction of new technologies (36 per cent).
Additionally, one in five is looking to integrate AI technologies to streamline processes, reduce costs, and improve operational efficiency, demonstrating a clear focus on margin protection. Encouragingly, turnover expectations have also improved, with 71 per cent anticipating an increase in their turnover over the next 12 months, up from two-thirds in January.
Business challenges
Despite strong growth expectations, domestic businesses face significant pressures that threaten to limit performance, creating a complex balance between ambition and caution. Labour costs remain the major concern for 75 per cent of firms, a slight decrease from 81 per cent earlier in the year, yet still critical. This is compounded by severe recruitment and retention difficulties (55 per cent) and intense competition for skilled workers from multinationals (49 per cent), adding further strain to domestic businesses.
According to Niall Savage, head of private enterprise at KPMG in Ireland, “We should never underestimate the importance of entrepreneurs. They are crucial to communities across the island. Understanding their views is essential for shaping effective policies to secure a prosperous future for entrepreneurship in Ireland. This understanding should not be a data exercise; it is a policy imperative.”
Meanwhile, Jenny Melia, chief executive, Enterprise Ireland, said: “Understanding how we can best support our indigenous enterprise base to grow and scale has never been more important. Enterprise Ireland’s purpose is to accelerate sustainable Irish business, and it is our long-term ambition that our agile and innovative Irish exporters will become the primary driver of the Irish economy. These innovators and entrepreneurs are economic anchors in towns and villages around the country, and we are committed to supporting them to achieve their global ambition.”
We should never underestimate the importance of entrepreneurs. They are crucial to communities across the island.
— Niall Savage, head of private enterprise, KPMG
Investment priorities
There has been a welcome strategic reprioritisation within the sector, with investment in innovation increasingly the priority for business.
Nonetheless, given the forecasted impact of AI, it is surprising that workforce and skills was still identified by respondents as the most important investment area, albeit at 38 per cent is it down 6 per cent since the start of the year. Talent challenges remain a significant focus with 81 per cent identifying increased labour costs and 68 per cent citing recruitment and retention of staff as the biggest challenges for business. Logically this will turn focus to investment in innovation, technology and automation.
Investment in innovation has unsurprisingly seen the most dramatic increase, rising from 15 per cent in January 2025 to 26 per cent in September 2025.
We welcome the increased focus on investment in innovation and suspect that this trend will continue over the next few years. It also illustrates how Irish businesses and entrepreneurs are using capital allocation to address structural and external pressures. The continued heavy investment in workforce and skills is a defensive measure against the talent crisis, while the acceleration of innovation spending is an offensive strategy aimed at enhancing efficiency and product diversification.
Entrepreneurial mindset
The report highlights that the core objective is to build a large, enduring company, rather than pursuing a quick sale or a short-term ‘cash out’ strategy – 83 per cent of respondents indicated they were focussed on growing their business rather than selling it. This statistic underscores a deep-seated ambition for legacy and scale that forms the bedrock of Ireland’s entrepreneurial ecosystem.
The challenge for policymakers is facilitating this through tax efficient mechanisms to reward entrepreneurs for investment and their efforts to date – taking something off the table to enable a focus on the next chapter of the company’s story.
While over a third of respondents acknowledge the Irish Government’s active support for entrepreneurship as a driver of economic growth, this positive sentiment does not translate into confidence in specific policy effectiveness.
Indeed, only a quarter feel Government measures are currently effective in encouraging domestic businesses and entrepreneurs to continue operations rather than selling them. This sentiment is reinforced by concerns over resource availability, with just 24 per cent agreeing there are sufficient financial incentives to help private businesses and entrepreneurs scale.
Thriving in a competitive global market
KPMG’s findings suggest that, by listening to private business leaders, we can support policymakers to design measures that enable more businesses to thrive in a highly competitive global market. Business leaders are calling for more support from Government, reduced red tape to ease compliance and improve access to funding; mechanisms to let owners take some money off the table while continuing to invest; incentives that reward sustainable investment in talent and technology beyond R&D; and long‑term supports for entrepreneurs who intend to stay with their businesses.
Read the full report at kpmg.ie/enterprisebarometer.
