Irish enterprise is being left behind as the Government doubles down on its dependence on foreign direct investment
ISME has welcomed the Summer economic Statement from Government, but said a far greater focus on indigenous enterprise will be required to address the imbalances in the Irish economy between multinational businesses and indigenous enterprise. ISME warned that Ireland will suffer the worsening effects of ‘Dutch Disease’ unless Budget 2026 focuses on scaling indigenous enterprises and helping them export. The association claims that Tuesday’s Summer Economic Statement does not include any new strategic support for the SME sector, despite mounting economic risks associated with overexposure to multinational tax receipts.
Dutch Disease is where labour, capital and tax reliefs flow to a successful part of the economy, to the detriment of other sectors. This can discourage investment and innovation in other areas, hindering economic diversification and long-term growth. Dutch Disease can create economic instability as the country’s fortunes become tied to the performance of a single sector and volatile global markets.
Neil McDonnell, Chief Executive of ISME, said: “We are living in a country where small businesses create two-thirds of jobs but get a fraction of policy attention. Ireland’s tax take is flattered by money from multinationals, but its economic soul is in its towns and villages. Budget 2026 must recognise that. If we keep chasing big headlines from big tech while ignoring the employers who built Ireland, we’ll end up with a hollowed-out economy.”
“We are optimistic for Ireland’s future, but that future will be built around entrepreneurial, innovative Irish businesses.”
ISME is calling for Budget 2026 to:
- Extend real SME representation to the Labour Employer Economic Forum (LEEF)
- Reform VAT rules (Section 56) to help more SMEs to exporter
- Broaden R&D tax reliefs to reach SMEs
- Fix low uptake of entrepreneurial reliefs like EII and KEEP
- Establish a national security clearance system to allow Irish SMEs to participate in EU defence and satellite programmes
Ireland has one of the widest dual-economy gaps in Europe, with Modified Gross National Income (GNI) accounting for just 57% of GDP, a warning sign typically seen in distorted or over-concentrated economies. Only Luxembourg has a wider gap.
ISME’s full Pre-Budget Submission can be found online – https://isme.ie/wp-content/uploads/2025/05/ISME-Pre-budget-Submission-2026.pdf
