Ireland has emerged as a beacon of success in terms of business survival amidst the Covid-19 pandemic. With a remarkably low business closure rate of only 1.6% in 2020, compared to the EU average of 7.2%, Ireland has surpassed its counterparts in the European Union.
This achievement can be largely attributed to the extensive government support provided to businesses, including the employment wage subsidy scheme and other taxpayer-funded assistance. Such measures effectively prevented numerous business failures and contributed to the overall resilience of the Irish economy.
While challenges may still lie ahead for some businesses that heavily relied on these supports, the billions invested in supporting small and medium-sized enterprises (SMEs) during the pandemic have been widely regarded as a positive move.
Additionally, Ireland’s robust economy, higher growth rates, and the strength of its business sector have further bolstered its exceptional business survival rate.
This article examines the various factors that have contributed to Ireland’s remarkable business survival amidst the pandemic.
Government Supports
The success of Ireland’s low business failure rate during the Covid crisis in 2020 can be attributed to the government’s implementation of various Covid supports, such as the employment wage subsidy scheme, which effectively prevented a higher number of business closures compared to the EU average.
The Irish government provided substantial taxpayer-funded supports for small businesses and households, including financial assistance and wage subsidies. These supports played a crucial role in alleviating the financial burden faced by businesses and allowed them to continue operating.
The founder of SME lender Grid Finance praised the government supports for their effectiveness in preventing business failures. However, it is worth noting that some businesses that were propped up by these supports may still face challenges in the future. Notably, there were 410 insolvencies in the first six months of the year, indicating that some companies are struggling without state supports.
Nonetheless, the billions spent on supporting SMEs during the pandemic were widely regarded as a necessary measure to safeguard businesses and the overall economy.
Low Business Failure Rate
With a significantly lower closure rate compared to the EU average, the country demonstrated a notable resilience in maintaining business operations during the pandemic.
In 2020, only 1.6% of Irish companies closed permanently, while the EU average stood at 7.2%. This low failure rate can be attributed to the government’s effective Covid supports, including the employment wage subsidy scheme. The Irish government provided substantial taxpayer-funded assistance to small businesses and households, which undoubtedly played a crucial role in preventing business failures.
However, it is important to note that while these supports have propped up struggling businesses, some may still face challenges and potential closures in the future. The presence of 410 insolvencies in the first half of the year indicates that certain companies are struggling without state supports.
Nonetheless, the billions spent on supporting SMEs during the pandemic have been widely regarded as a prudent and beneficial investment, as Ireland boasted the highest survival rate for businesses in the EU.
Factors Contributing to Success
Notable factors contributing to the success of maintaining business operations during the pandemic include effective government Covid supports, such as the employment wage subsidy scheme, and substantial taxpayer-funded assistance provided to small businesses and households.
The Irish government’s implementation of these measures played a crucial role in preventing business failures and ensuring the survival of firms.
The employment wage subsidy scheme provided financial support to businesses, allowing them to retain employees and continue operations.
Additionally, the government’s significant investment in supporting small businesses and households helped to mitigate the economic impact of the pandemic and sustain businesses during challenging times.
The combination of these measures, along with the overall strength of the Irish economy and its higher growth rates compared to other countries, contributed to Ireland’s remarkable business survival rate amidst the pandemic.
