6 Engagement of Small and Medium-Sized Manufacturing Enterprises …
101
(e.g., Berkhout et al. 2006). However, a comprehensive understanding of firms’
individual competencies to adapt to natural hazards is still lacking, particularly in
hazard-prone emerging and developing countries, such as Indonesia.
Also, within the debate of flood governance, SMEs play a minor role in Indonesia
and at the global level. The debate around adaptation governance rather focuses on
state actors, individual households, or groups of households in community-based
adaptation approaches (e.g., Garschagen 2013; Garschagen 2016; Birkmann et al.
2010, 2014; DiGregorio et al. 2016). Yet, since public authorities are in many countries overstrained to provide an adequate flood risk reduction particularly also for
enterprises, it seems to be necessary to include firms as a key stakeholder in adaptation governance considerations. In fact, the question arises how SMEs can enhance
the performance and effectiveness of flood governance arrangements.
Thus, we argue that it is crucial to gain at first an understanding of firms’ own activities on adaptation. Accordingly, in a first step, the chapter is to analyze how SMEs
develop individual flood adaptation strategies by utilizing their dynamic capabilities (i.e., resources and competencies) and to identify deficiencies. Since the SMEs
cannot often reduce their flood exposure substantially, we discuss in a second step
how flood risk reduction can be better addressed by an integrative approach, i.e., in a
joint effort of firms, together with public authorities, residents, and the civil society
institutions. By doing so, the chapter complements the literature by discussing how
SMEs can be vital players of flood governance in coastal cities.
The remainder of the chapter is structured as follows: Sect. “Flood Risk and SMEs’
Individual Adaptation” provides a conceptual frame for the analysis of how SMEs
develop their individual adaptation by utilizing their routines and dynamic capabilities. Section “The Role of SMEs on Broader Flood Governance in Indonesia”
describes the methodological approach and provides a data overview. The fourth
section presents the magnitude of flood exposure of SMEs and the empirical results
of the chosen individual adaptation by SMEs in Jakarta and Semarang. Section “The
Role of SMEs on Broader Flood Governance in Indonesia” elaborates the formal
perspective on flood governance in Indonesia. It also presents examples of SMEs’
engagement on flood governance and highlights deficits. Based on these results, we
suggest recommendations for a more integrative flood governance in Sect. “Discussion: Proposal for a More Integrative Flood Governance”. The last section provides
key conclusions.
SMEs’ Dynamic Capabilities on Flood Risk Reduction
Numerous papers estimated firms’ loss and damage from flood events. Also, research
has dealt with the recovery time and/or survival rate of firms (e.g., Bahinipati et al.
2017; de Mel et al. 2012; Sydnor et al. 2017). Other literature has focused on prevention activities by firms. For instance, Kreibich et al. (2007) discuss the preparedness
and precaution measures of firms in the context of floods in Saxony, Germany 2002.
A survey of small businesses and their willingness on flood risk mitigation strategies
101
(e.g., Berkhout et al. 2006). However, a comprehensive understanding of firms’
individual competencies to adapt to natural hazards is still lacking, particularly in
hazard-prone emerging and developing countries, such as Indonesia.
Also, within the debate of flood governance, SMEs play a minor role in Indonesia
and at the global level. The debate around adaptation governance rather focuses on
state actors, individual households, or groups of households in community-based
adaptation approaches (e.g., Garschagen 2013; Garschagen 2016; Birkmann et al.
2010, 2014; DiGregorio et al. 2016). Yet, since public authorities are in many countries overstrained to provide an adequate flood risk reduction particularly also for
enterprises, it seems to be necessary to include firms as a key stakeholder in adaptation governance considerations. In fact, the question arises how SMEs can enhance
the performance and effectiveness of flood governance arrangements.
Thus, we argue that it is crucial to gain at first an understanding of firms’ own activities on adaptation. Accordingly, in a first step, the chapter is to analyze how SMEs
develop individual flood adaptation strategies by utilizing their dynamic capabilities (i.e., resources and competencies) and to identify deficiencies. Since the SMEs
cannot often reduce their flood exposure substantially, we discuss in a second step
how flood risk reduction can be better addressed by an integrative approach, i.e., in a
joint effort of firms, together with public authorities, residents, and the civil society
institutions. By doing so, the chapter complements the literature by discussing how
SMEs can be vital players of flood governance in coastal cities.
The remainder of the chapter is structured as follows: Sect. “Flood Risk and SMEs’
Individual Adaptation” provides a conceptual frame for the analysis of how SMEs
develop their individual adaptation by utilizing their routines and dynamic capabilities. Section “The Role of SMEs on Broader Flood Governance in Indonesia”
describes the methodological approach and provides a data overview. The fourth
section presents the magnitude of flood exposure of SMEs and the empirical results
of the chosen individual adaptation by SMEs in Jakarta and Semarang. Section “The
Role of SMEs on Broader Flood Governance in Indonesia” elaborates the formal
perspective on flood governance in Indonesia. It also presents examples of SMEs’
engagement on flood governance and highlights deficits. Based on these results, we
suggest recommendations for a more integrative flood governance in Sect. “Discussion: Proposal for a More Integrative Flood Governance”. The last section provides
key conclusions.
SMEs’ Dynamic Capabilities on Flood Risk Reduction
Numerous papers estimated firms’ loss and damage from flood events. Also, research
has dealt with the recovery time and/or survival rate of firms (e.g., Bahinipati et al.
2017; de Mel et al. 2012; Sydnor et al. 2017). Other literature has focused on prevention activities by firms. For instance, Kreibich et al. (2007) discuss the preparedness
and precaution measures of firms in the context of floods in Saxony, Germany 2002.
A survey of small businesses and their willingness on flood risk mitigation strategies