A survey has found that up to 60% or €3.5bn of online spending by Irish consumers goes abroad, while a quarter of Irish businesses do not have any web presence.
The findings were contained in research on Ireland's digital economy carried out by Amarach Consulting on behalf of UPC.
The report predicts that up to 150,000 new direct and indirect jobs could be created through the Irish internet economy by 2020 as more and more people carry out their business online.
79,000 of these jobs would be directly in the internet economy.
The study forecasts that the value of Ireland's internet economy will grow from €8.4bn a year now to €21.1bn by 2020.
The research, carried out among 1,000 Irish adults and 200 businesses, found the proportion of people with access to broadband speeds above 30Mbps or higher has trebled to 30% in the two years since the last survey.
The survey found 59% of adults in Ireland shop online at least once a month.
It also found that consumer spending online is currently worth €6bn a year and will grow to €13bn by 2020.
The research found that almost two thirds of parents have parental control software installed on their home devices.
And when it comes to the value people put on internet access, the report found that people would want €130 a month in compensation if their internet connection were to disappear tomorrow.
The survey also found a significant use of "second screening" with eight out of ten adults admitting to using a laptop, smartphone or tablet while watching TV.
60% of adults have interacted with Government online.
However, when it comes to working at home, six out of ten adults away they cannot because their broadband is not good enough.
Speaking at the launch of the report, UPC Ireland CEO Magnus Ternsjö said Ireland is not doing enough to get its businesses online.
He said Irish businesses cannot afford to only capture 40% of online sales here. While Gerard O'Neill from Amarach Consulting said the failure of Irish businesses to capture the online market was a very significant lost opportunity.
Minister for Communications Pat Rabbitte said the study findings are very encouraging in terms of digital adoption and its significance for the Irish economy.
He said he is confident that the Government is going in the right direction when it comes to rolling out high-speed broadband.
He said the Government's plan to intervene in the market in rural areas is the right way to go.