Forewarned is forearmed | What will 2025 bring for Irish business

A new year beckons and as it is so soon after a general election, there is much we don’t know. We can try gazing into a crystal ball, but it will not shed much light on the subject of how the new Government will work, never mind who will be involved. At the time of writing, it is looking as though it will be the two main parties Fianna Fáil and Fine Gael, along with a group of independents.

However, is this the best possible solution to the issues that are facing Irish businesses in 2025 and beyond? Members of Institute of Directors (IoD) Ireland’s view is that this is a less favourable outcome. We conducted a snap poll of our members during election week and just under two-thirds of respondents replied that their preference was for a two-party coalition and that this formation would deliver on the crucial ingredients required to tackle Ireland’s pressing challenges. The results also revealed a near-universal agreement on what the next Programme for Government must prioritise: infrastructure (including broadband) and housing. With both cited as top priorities, the business community has issued an appeal for urgent action on these fronts.

Infrastructure, Housing and Economic Pressures as Top Priorities

The message is clear: the digital transformation and regional development that businesses see as essential for growth depend on robust broadband infrastructure. Similarly, the housing crisis looms as a bottleneck, hindering talent acquisition and retention – a challenge cited by respondents as a critical hurdle for 2025. There are, of course, other significant hurdles. Economic and fiscal pressures, coupled with the high cost of doing business, weigh heavily on decision-makers. Add to this the perennial struggle to attract and retain top talent, the growing complexity of regulatory frameworks, and the urgency for a supportive policy environment becomes undeniable.

This underscores the importance of a focused agenda for the next Government giving Irish business and the economy serious consideration when collating the Programme for Government. In the poll, IoD respondents overwhelmingly prioritised infrastructure investment while digital transformation, global competitiveness and trade tariffs were also cited as requiring consideration. These priorities reflect an acute awareness of the interconnectedness of infrastructure and economic competitiveness.

Global Uncertainty from 2024 Elections

2024 was the year of elections – in Ireland, the general and local – internationally, the European elections in June and the American elections in November. The new European Commission will influence Ireland in several key areas e.g. economic and fiscal policies, digital innovation, sustainability and climate action. However, with the uncertainty of what a Trump administration will bring, Ireland needs to adapt more.

Impact of Protectionism on Ireland’s Economy

Ireland's economic stability, often heralded for its resilience and growth, could face significant challenges in a protectionist trade environment. As a small, open economy, we depend heavily on global trade and FDI, with exports contributing significantly to our GDP. The country has thrived as a hub for multinational corporations, particularly in sectors like technology, pharmaceuticals, and finance, due in part to its EU membership and open trade policies. 

However, rising protectionism could disrupt these dynamics by increasing trade barriers, restricting market access, and creating uncertainty for businesses reliant on seamless global supply chains. Such developments may deter investment and slow economic growth, highlighting the vulnerabilities of Ireland’s globalised economic model to shifts toward insularity in international trade policies.

Innovation and Market Expansion as Growth Drivers

Irish business leaders, who took part in the IoD Ireland poll, are looking to the future with a keen eye on innovation and market expansion. Digital transformation, enhancement of products and services, and reaching new markets were identified as key growth drivers. Notably, generative AI remains a secondary priority, reflecting the need for businesses to balance bold technological bets with proven strategies.This outlook aligns with the broader global trends emphasising innovation as the engine of economic dynamism. Ireland, with its vibrant tech ecosystem, is well-positioned to harness this momentum, but it is essential that the incoming Government offers the right mix of incentives and infrastructure so as to keep Ireland at the forefront of innovation.

As we step into a new year, the stakes for Irish businesses have never been higher. The incoming Government has a unique opportunity to shape the country’s economic trajectory by addressing critical challenges such as infrastructure deficits, the housing crisis, and global trade uncertainties. However, this will require decisive action, clear priorities, and a commitment to fostering an environment that supports innovation, competitiveness, and sustainable growth. 

IoD Ireland’s Role in Supporting Leaders

At Institute of Directors Ireland, we gather world-class knowledge, research, and input from the best in business to empower our members and their boards, so that they can be prepared to face any bumps in the road, delivering all that directors need to lead in times of ceaseless change. The saying ‘Forewarned is forearmed’ comes to mind, but it is important in all areas of business to be prepared in case of all eventualities.

Adapting for a Resilient Future

While the path forward may be uncertain, one thing is clear: Ireland’s ability to adapt, innovate, and invest strategically will determine its resilience in the face of global and domestic pressures. The business community stands ready to engage, collaborate, and support policies that secure a brighter, more prosperous future for all. The question now is whether the Government will rise to meet the moment.