Digital Transformation: Challenges and Opportunities for the Irish Labour Market

Anil Yadav and Tara McIndoe-Calder
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Anil Yadav: Central Bank of Ireland

Quarterly Bulletin Articles, 2026, 1-44

Abstract: AI and digital automation technologies have the potential to reshape labour markets and economies in difficult to predict ways. This Article examines the link between digital transformation and the Irish labour market, with four main findings. First, we find that at least 14 per cent of the current workforce may be employed in jobs with both high exposure to and low potential for augmentation by digitally transformed employment. Second, to date demand for AI-related skills is concentrated in ICT, Finance, and Professional Services, which combined account for 20 per cent of the workforce. Third, labour demand for highly skilled workers is running ahead of new domestic supply in key fields such as ICT and engineering. Fourth, our analysis indicates that digital skills mismatch is a significant barrier to occupational mobility, with higher mismatch associated with a lower probability of transitioning between occupations. These findings reflect current labour market conditions but AI technologies are developing quickly, such that further ongoing analysis is warranted. Public policy has a role to play in targeting retraining supports towards the most exposed occupations and sectors to facilitate workforce adaptability.

Date: 2026-03
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Persistent link: https://EconPapers.repec.org/RePEc:cbi:qtbart:y:2026:m:03:p:1-44

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