100
T. Neise et al.
of industrial parks. In sum, the chapter provides relevant results for policy design,
suggesting a stronger integration of SMEs into integrative flood adaptation policy in
Indonesian coastal cities.
Keywords Jakarta · Semarang · Flood · Manufacturing firms · Governance
Introduction
In many countries of the Global South, small- and medium-sized manufacturing
enterprises
1 (SMEs) are exposed to floods. This is also true in Indonesian coastal cities
where a high number of firms collocate due to an abundant number of workers, a high
market potential, and a better infrastructure. At the same time, the global proliferation
of flood hazards is becoming increasingly visible (EM-DAT 2018) and can further be
expected for the future (IPCC 2018). An important reason is that climate change tends
to raise the sea-level and the magnitude of storm surges (IPCC 2018). Furthermore,
high urbanization in sensitive low-lying flood-prone areas causes the reduction of
green space and land subsidence due to groundwater extraction (e.g., Garschagen
et al. 2018; Garschagen and Romero-Lankao 2015; Garschagen 2015; SudmeierRieux et al. 2015). All these aspects accelerate the flood-proneness of SMEs.
So far, public authorities in Indonesia inadequately address the flood risk of SMEs
and/or fail to include SMEs into state-led—often insufficient—flood mitigation policies in coastal cities (Neise et al. 2018). This is a remarkable deficit that hampers
effective and more comprehensive flood risk reduction. A central task is, therefore, to
better understand the factors that hinder an integrative flood adaptation in which all
actors involved (e.g., residents, public authorities, the civil society) jointly organize
and implement large-scale adaptation measures, such as a polder or pump systems.
In theory, it is to be expected that such large-scale measure can be more effective
than individual ones and can realize a higher investment efficiency as costs can be
distributed among all actors.
Small and medium-sized manufacturing firms are the backbone of Indonesia’s
economy, especially to alleviate poverty and to provide jobs for the lower skilled
population (Pakpahan 2013; Sandee 2009). Flood hazards induce business disruptions, such as destroyed raw materials or power outages that result in lower outputs,
worker layoffs, and degrading livelihoods (Hallegatte 2014). Hence, the susceptibility of SMEs to flood hazards also leads to vulnerabilities for the residents and the
economic development within Indonesian coastal cities at large.
Research with a focus on firms is burgeoning but rather focusses on estimating
losses and damages provoked by natural disasters or survival rates of firms (e.g.,
Bahinipati et al. 2017; Pathak and Ahmad 2016). Lately, the literature is highlighting
how enterprises in industrialized countries adapt to floods to sustain their business
1 Our definition of SMEs relies on the frequently applied definition by the European Commission
(2015) that call all firms with fewer than 50 employees as small enterprises and enterprises with
fewer than 250 employees are defined as medium-sized enterprises.
T. Neise et al.
of industrial parks. In sum, the chapter provides relevant results for policy design,
suggesting a stronger integration of SMEs into integrative flood adaptation policy in
Indonesian coastal cities.
Keywords Jakarta · Semarang · Flood · Manufacturing firms · Governance
Introduction
In many countries of the Global South, small- and medium-sized manufacturing
enterprises
1 (SMEs) are exposed to floods. This is also true in Indonesian coastal cities
where a high number of firms collocate due to an abundant number of workers, a high
market potential, and a better infrastructure. At the same time, the global proliferation
of flood hazards is becoming increasingly visible (EM-DAT 2018) and can further be
expected for the future (IPCC 2018). An important reason is that climate change tends
to raise the sea-level and the magnitude of storm surges (IPCC 2018). Furthermore,
high urbanization in sensitive low-lying flood-prone areas causes the reduction of
green space and land subsidence due to groundwater extraction (e.g., Garschagen
et al. 2018; Garschagen and Romero-Lankao 2015; Garschagen 2015; SudmeierRieux et al. 2015). All these aspects accelerate the flood-proneness of SMEs.
So far, public authorities in Indonesia inadequately address the flood risk of SMEs
and/or fail to include SMEs into state-led—often insufficient—flood mitigation policies in coastal cities (Neise et al. 2018). This is a remarkable deficit that hampers
effective and more comprehensive flood risk reduction. A central task is, therefore, to
better understand the factors that hinder an integrative flood adaptation in which all
actors involved (e.g., residents, public authorities, the civil society) jointly organize
and implement large-scale adaptation measures, such as a polder or pump systems.
In theory, it is to be expected that such large-scale measure can be more effective
than individual ones and can realize a higher investment efficiency as costs can be
distributed among all actors.
Small and medium-sized manufacturing firms are the backbone of Indonesia’s
economy, especially to alleviate poverty and to provide jobs for the lower skilled
population (Pakpahan 2013; Sandee 2009). Flood hazards induce business disruptions, such as destroyed raw materials or power outages that result in lower outputs,
worker layoffs, and degrading livelihoods (Hallegatte 2014). Hence, the susceptibility of SMEs to flood hazards also leads to vulnerabilities for the residents and the
economic development within Indonesian coastal cities at large.
Research with a focus on firms is burgeoning but rather focusses on estimating
losses and damages provoked by natural disasters or survival rates of firms (e.g.,
Bahinipati et al. 2017; Pathak and Ahmad 2016). Lately, the literature is highlighting
how enterprises in industrialized countries adapt to floods to sustain their business
1 Our definition of SMEs relies on the frequently applied definition by the European Commission
(2015) that call all firms with fewer than 50 employees as small enterprises and enterprises with
fewer than 250 employees are defined as medium-sized enterprises.