80pc of Ireland’s tech firms may ‘run out of cash’
EIGHTY per cent of Irish indigenous tech and high-growth companies expect to run out of cash within six months, unless the Government makes changes to its emergency supports, according to a survey.
In the wake of the Covid-19 crisis, Scale Ireland, an advocacy body for Ireland’s innovation-driven companies, surveyed more than 350 Irish high-growth firms employing over 2,200 people.
It also found that 20pc of the companies were at risk of becoming bankrupt within the next four weeks if supportive action is not taken. It said this posed an “urgent threat” to the labour market.
In the absence of a targeted package of liquidity supports, Scale Ireland predicts the potential loss of 30,000 high-skill jobs across a range of sectors, while a further 60,000 future jobs, expected to be created by 2025, may fail to materialise.
Liz McCarthy, chief executive of Scale Ireland, said it was “unfortunate” that the provisions overlooked these companies.
According to Scale Ireland’s research, the emergency supports are not responding to the needs of tech companies. It found eligibility criteria is overly complicated, that the pace of response is slow and that there was a lack of coordination between State agencies and banks.
Scale Ireland claimed Enterprise Ireland informed it last week that only 55 companies had applied for the Sustaining Enterprise Fund, with just one approved. It said this highlighted “deficiencies” with the structure of the support environment.
The fund now has 120 enquiries with two in the approvals process.
The group said the Government should update and simplify supports. It wants the Government to make debt solutions available to innovative companies, to put in place grants targeted at innovative firms and to start a bridging fund that leverages private investment.