The digitisation of the Irish economy could potentially be worth around €300 billion in 2023, accounting for 65% of economic output.

That is according to forecasts by Amárach and the International Data Corporation contained in a new report by Microsoft Ireland.

The research, which was carried out with over 360 business decision makers and technology leaders, reveals that over 80% of businesses have been forced to adopt digital technologies faster and sooner due to the pandemic.

However, just under 30% said they are using these technologies to engage customers through connected experiences or to empower employees.

Meanwhile, nearly half of businesses think they are behind the curve when it comes to having the right digital services and technologies in place to deal with new working realities.

But almost 80% said they believe their investments to date will have a lasting positive impact on their business.

The majority of respondents also said that digitalisation will allow them to attract and retain talent.

"As the report clearly demonstrates, the last 18 months have highlighted the seismic potential of the digital economy in Ireland over the coming years," said Kieran McCorry, National Technology Officer with Microsoft Ireland.

"However, the report also highlights just how much more there is still to do to reach this potential - with many businesses only just now scratching the surface of digital transformation and how they use data and tools, connect with customers, or engage employees," he added.

Kieran McCorry, National Technology Officer with Microsoft Ireland

Most businesses said cloud-based systems and investments are top of the list when it comes to their approach to technology in the future.

Despite concerns in relation to cloud adoption such as security, cost and trust, almost 70% of businesses said they need to move some or all of their operations to the cloud so they can prepare for the 'new normal'.

Of those already using cloud, 36% said they could not revert to how they did things before.

Hybrid working was highlighted as a key driver of the adoption of digital technologies, with almost 70% stating they will have a 'hybrid workforce' in future.

"As we look towards recovery, we are seeing enormous interest from Irish organisations of all sizes to embrace and build on their investments to realise the full economic, environmental, and business benefits of digitalisation on a much larger scale - with cloud adoption central to their plans," said Mr McCorry.