A new report projects a doubling in the Irish internet economy to €11.3 billion annually in the next 3 years.
The UPC survey on Ireland's Digital Future says this will be underpinned by 2.6 million Irish online shoppers spending €5.7 billion - or 7% of all consumer spending.
This is compared to €3.7 billion back in 2012.
While the internet economy currently accounts for roughly 3% of Irish GDP, this is set to double to 6% over the next 3 years.
Enda Kenny says the digital economy has a major role to play in Irish economic recovery.
"Digital capital of Europe"
Addressing a discussion forum on jobs in Dublin the Taoiseach said "Ireland on its way to becoming the digital capital of Europe".
"We welcome the arrival of global digital brands into Ireland and the contribution they make to our economy and society".
He said the on-going challenge for government was to prevent a 'two-tier digital economy' from developing - and to ensure Irish small and medium sized businesses are encouraged "to embrace the opportunities new digital technologies can offer".
"I want to see all Irish businesses live up to their potential and have the ability to compete globally" he continued.
"For the Government's part, we will work to create a supportive and flexible enterprise environment so that Ireland's digital economy can continue to go from strength to strength" he added.
UPC Ireland CEO is Dana Strong.
"The prize from greater digital uptake will be obtained for Ireland if we can use Irish based innovation, entrepreneurship and productivity to create enhanced revenues and jobs for industry and particularly for small and medium businesses with export potential" she said.
