That is according to Ibec and research undertaken by Professor Andrew Burke, dean of Trinity Business School, and peers last year, which highlighted the long-lasting detrimental impacts that a shock that causes the permanent exit of a firm from a market can have on the long-term performance of that industry.

Disaster management

Prof Burke said: “Our research in disaster management shows that if a firm formally exits a market, as opposed to a temporary closure of its door to business, this causes a long-term permanent decrease in the number of firms and industry profits. From this, it will take five years to get back to approximately 80% of industry performance.” 

“We can see that an exit bears significant and lasting economic and social costs and therefore any measure to prevent widespread closures of businesses in the midst of a crisis ought to factor in the enormous cost of not supporting firms in danger of closure.” 

Danny McCoy, Ibec CEO, said: “Without the implementation of support measures for vulnerable businesses, the road to recovery from the crisis will be longer and more expensive.

"While the Wage Subsidy Scheme is a welcome and a critical component to ensure the sustainability of our business model during the crisis, our reboot and recovery phase requires more.”  

“Last week Ibec called for a new programme of guarantees, loans, and other supports that would help ensure €26.4 billion of liquidity to the economy, at a net exchequer cost of €3.9 billion. Although these are significant sums, there are no cheap alternatives.”