Cork Views: Yes, there was some good news in the budget 

When the dust settled after Budget 2026, many households in Cork and across the country were left wondering: what was in it for us?

After several years of ‘giveaway’ budgets, this year’s package marked a shift. The Government chose to invest strategically rather than spend broadly - signalling a pivot from short-term relief to long-term resilience.

Budget 2026 was, at its core, an enterprise and innovation budget. It was designed to shore up Ireland’s competitiveness, protect and create jobs, and future-proof the economy through targeted investment. While headlines focused on the 9% VAT reduction for the hospitality sector - a welcome development for coffee shops and restaurants from Midleton to Clonakilty - the real story lies in the Government’s decisive move to strengthen Ireland’s research and development (R&D) framework.

Cork has become one of Europe’s most dynamic innovation hubs. From pharmaceutical giants to advanced manufacturing and technology firms, the region has attracted some of the world’s leading companies.

This has created thousands of high-value roles and fostered an ecosystem that links industry, academia, and entrepreneurship.

R&D isn’t an abstract concept here, it is the beating heart of Cork’s modern economy and critical to making sure high-quality jobs are created and stay in Cork

The Government’s decision to increase the R&D tax credit from 30% to 35% and raise the first-year payment threshold to €87,500 is not just a fiscal adjustment; it’s a statement of intent. It recognises that Ireland’s future prosperity depends on our ability to innovate and that innovation needs sustained support.

These measures will directly benefit Cork-based firms engaged in cutting-edge research - from biopharma to clean tech to artificial intelligence.

But their impact will also ripple outward, supporting local suppliers, start-ups, and spinouts connected to these industries. Critically, they will embed employment and wages in households in the region.

Ireland’s success as a small, knowledge-intensive economy has long depended on its openness and ability to adapt. But global headwinds are gathering: trade tensions, U.S. isolationism, and a weakening of multilateral cooperation have created a more uncertain environment for small, export-oriented nations like ours.

In this context, innovation is one of the few levers truly within our control. It’s what allows Ireland to punch above its weight and what will ensure Cork remains competitive in a rapidly changing global economy.

Ireland’s national research and innovation strategy, Impact 2030, sets the goal of becoming a European Innovation Leader by the end of the decade. Currently ranked seventh on the European Innovation Scoreboard, Ireland is classed as a ‘Strong Innovator’ but our performance has plateaued. While countries like Sweden, Finland, and Denmark continue to accelerate, Ireland’s progress has been modest. Emerging players like Estonia are rapidly closing the gap.

To maintain our edge, we need to fix the structural weaknesses in our innovation system. Chief among them is the chronic underinvestment of public funds in research and innovation. Business investment remains robust, but public spending lags behind OECD and EU averages. This gap limits national capacity and risks stalling the momentum built over the past decade.

Budget 2026’s €70 million increase in innovation capital funding - a 17% uplift - begins to address this imbalance. It is a step in the right direction and aligns with calls from Ibec and others in the enterprise community to match ambition with funding.

A common misconception is that the R&D Tax Credit mainly benefits multinationals. While it’s true large companies have historically been the biggest claimants, that’s starting to change. The Government has recognised the need to simplify access for small and medium-sized enterprises (SMEs), and Budget 2026 includes measures to do just that.

The forthcoming R&D Compass initiative will have the opportunity to clarify qualifying activities, recognise outsourcing arrangements, and expand the range of eligible work. This means more local companies - including engineering firms, tech start-ups, and traditional manufacturers in Cork - will now fall within its scope.

Of course, innovation funding alone is not enough. The availability of skilled researchers, engineers, and technicians will determine how effectively we translate investment into impact. Here, too, Cork is well positioned. With University College Cork and Munster Technological University driving world-class research and strong industry links, the region already has the foundations of a powerful innovation ecosystem.

But, as Ibec and others have warned, we must continue to invest in people - from apprenticeships to postgraduate training - to sustain growth and maintain competitiveness. The National Training Fund and other public instruments must be deployed strategically to support this. Building a world-class labour force is not optional; it’s the cornerstone of Ireland’s innovation future.

Budget 2026, for some, may have felt flat. But by investing ambitiously in infrastructure, skills, and innovation to drive productivity and protect and create jobs, we will deliver the greatest benefit for society.

In these uncertain times, that will ultimately support people’s incomes much more effectively than any one-off payments. Areas such as Cork - with its track record, decades of success, and strong supporting ecosystem - could see the greatest gains from last week’s announcement.