Comment: There's an old saying about the global economy: "When America sneezes, Europe catches cold."

This may actually come to fruition, albeit in the reverse direction, as avian flu traverses the globe causing immense damage to public confidence in the food industry.

However, the wider implications for the global economy are even more serious.

Anyone aged 50 or older has already lived through two pandemics. It is estimated that three million people died during the flu pandemics of 1957/58 and 1968/69. The path of the 1957 outbreak was also traced to Asia and had touched all corners of the world within six months.

As a professional with wide experience in risk identification and management, it is clear to me that, despite some progress, many companies are not yet fully prepared for the potential impact of avian flu.

To put avian flu into context, estimates for deaths as a result of an avian flu pandemic range from 7.5 million to a massive 350 million.

Even with a lesser scale of infection the following impacts could occur:

anywhere from 25 per cent to 40 per cent of an entire country's workforce could take between five and 25 days sick leave;

other staff will be required to stay at home to care for infected family members or will be afraid to risk coming to work for fear of infection;

economic damage of $800 billion (€670 billion) could be inflicted on the global economy;

travel, tourism, sports, entertainment and every other industry could face severe disruption in both its supply and demand markets;

staff based in infected areas may need or demand immediate repatriation to their home territory.

In particular, healthcare systems would come under immense pressure. For example, a crisis preparation study carried out using the hospital system in Atlanta as a base found that a flu pandemic with similar features to avian flu would reach peak demand in the fifth week of an eight-week pandemic.

In that week alone, the additional demand on health resources would require 28 per cent of hospital beds, 77 per cent of ICU capacity and 42 per cent of ventilators. The Atlanta region could expect almost 14,000 hospital admissions and 2,500 deaths in the eight weeks.

And remember, the healthcare and other systems could be operating with just 75 per cent of its normal workforce. In such scenarios business must ask itself if it is prepared for this.

We are certainly seeing an increase in preparedness planning among the public sector. In addition many larger businesses are also reviewing their crisis management plans and assessing how well prepared they are.

However, there still does not seem to be full recognition that an outbreak of avian flu would have massive business and economic implications.

Many member states of the European Union have now confirmed the presence of the H5N1 strain of the virus, potentially lethal to humans, and it is quickly spreading across the continent.

An outbreak of avian flu will severely test even the best-laid business continuity plans, and businesses are well advised to review and revise their plans in the light of this threat.

The question on everyone's tongue is, "how worried should we be?". It's a simple question but has a complicated answer. Just as citizens of San Francisco or Tokyo know that they live in an active earthquake zone, people and organisations need to be aware that the entire world is becoming a potential pandemic infection zone.

At the very least, the avian flu virus has raised public awareness of pandemics and their impact.

Now that this awareness has been raised, it is up to corporate leaders and boards of directors to prepare business plans, strategies and tactics for the future, against a backdrop where it is impossible to determine how severe an outbreak is likely to be.

Crises in general represent an area for which it is difficult to prepare. That said, when a group of executives are put into a room and asked to imagine the worst, they can generally come up with some highly unusual crisis scenarios. The key difficulty and where specialist expertise is often required is in developing plans to respond to those scenarios.

It must be said that business is nothing if not resilient and planning for the unknown and dealing with unforeseen events is just another element of modern business.

Even if avian flu does not emerge as a pandemic, the time spent on planning and preparation will not have been wasted.

Corporate preparedness is a transferable skill. Those organizations who are not prepared will suffer the consequences.

David Hamilton is head of Marsh Ireland's consulting practice. Marsh Ireland is a leading provider of risk and insurance services.