6 Engagement of Small and Medium-Sized Manufacturing Enterprises …
103
et al. (2006) note that companies often question the economic benefits of adaptation
compared to the needed investments. Hence, the companies might waive adaptive
actions or postpone activities of adaptation until the flood exposure causes severe
damages and losses.
In order to relate adaptation measures to the necessary input of dynamic capabilities and their efficacy, we distinguish between soft and hard measures. Adaptation regarding organizational measures, for instance, back-up plans for production or
shipping, are understood as soft adaptation. The enterprises need to learn appropriate
competencies to implement and adapt them flexibly. But soft measures such as an
emergency response team require continual funding and/or deployment of manpower.
Soft (i.e., organizational) measures are very suitable if the flood risk can be anticipated
by experience or forecast systems. Technological adaptation and investment in the
built infrastructure are mostly considered as hard adaptation measures. Simple hard
measures such as elevating the plant level only require minor skills and technologies.
The SMEs can rely on their own competencies and implement them on their own or
use small financial resources to hire a local construction company. Regarding more
advanced hard (i.e., technologically based, capital-intensive) measures, e.g., a polder
system, the enterprises typically need to consult and hire engineering companies. The
enterprises are forced to acquire external competencies. In addition, these measures
involve high investment costs (Agrawala et al. 2011; Hallegatte 2009, 2014).
Method and Data
The empirical research is based on a comparative case study approach (cf. Yin 2014)
that compares SMEs in Jakarta and Semarang and regarding their dynamic capabilities. The research followed a mixed-method approach. In a first step, we assessed
the flood exposure of SMEs by spatial analysis of secondary data provided by the
Central Agency on Statistics of Indonesia (BPS). In a second step, qualitative data
material was collected from 48 in-depth interviews with business owners or directors
of small (n = 25) or medium-sized (n = 23) manufacturing firms. The interviews
aimed to provide an understanding of the disruptions of firms’ businesses processes
caused by floods and the determinants (e.g., resources, skills and knowledge) of
firms’ rationales to implement adaptation measures or the inability to do so.
In addition, 21 expert interviews were conducted with other key informants. The
interviews with representatives of business associations and industrial park management authorities dealt with the cooperation between the enterprises and the interviewed stakeholder within an industrial park or among firms within the business
sector. The expert interviews with local public authorities (e.g., local disaster management authorities, BAPPEDA Kota Semarang, and Public Works DKI Jakarta) gave
an understanding of the flood mitigation policy in Jakarta and Semarang. In addition,
the interviews centered on the cooperation of public authorities with SMEs on flood
103
et al. (2006) note that companies often question the economic benefits of adaptation
compared to the needed investments. Hence, the companies might waive adaptive
actions or postpone activities of adaptation until the flood exposure causes severe
damages and losses.
In order to relate adaptation measures to the necessary input of dynamic capabilities and their efficacy, we distinguish between soft and hard measures. Adaptation regarding organizational measures, for instance, back-up plans for production or
shipping, are understood as soft adaptation. The enterprises need to learn appropriate
competencies to implement and adapt them flexibly. But soft measures such as an
emergency response team require continual funding and/or deployment of manpower.
Soft (i.e., organizational) measures are very suitable if the flood risk can be anticipated
by experience or forecast systems. Technological adaptation and investment in the
built infrastructure are mostly considered as hard adaptation measures. Simple hard
measures such as elevating the plant level only require minor skills and technologies.
The SMEs can rely on their own competencies and implement them on their own or
use small financial resources to hire a local construction company. Regarding more
advanced hard (i.e., technologically based, capital-intensive) measures, e.g., a polder
system, the enterprises typically need to consult and hire engineering companies. The
enterprises are forced to acquire external competencies. In addition, these measures
involve high investment costs (Agrawala et al. 2011; Hallegatte 2009, 2014).
Method and Data
The empirical research is based on a comparative case study approach (cf. Yin 2014)
that compares SMEs in Jakarta and Semarang and regarding their dynamic capabilities. The research followed a mixed-method approach. In a first step, we assessed
the flood exposure of SMEs by spatial analysis of secondary data provided by the
Central Agency on Statistics of Indonesia (BPS). In a second step, qualitative data
material was collected from 48 in-depth interviews with business owners or directors
of small (n = 25) or medium-sized (n = 23) manufacturing firms. The interviews
aimed to provide an understanding of the disruptions of firms’ businesses processes
caused by floods and the determinants (e.g., resources, skills and knowledge) of
firms’ rationales to implement adaptation measures or the inability to do so.
In addition, 21 expert interviews were conducted with other key informants. The
interviews with representatives of business associations and industrial park management authorities dealt with the cooperation between the enterprises and the interviewed stakeholder within an industrial park or among firms within the business
sector. The expert interviews with local public authorities (e.g., local disaster management authorities, BAPPEDA Kota Semarang, and Public Works DKI Jakarta) gave
an understanding of the flood mitigation policy in Jakarta and Semarang. In addition,
the interviews centered on the cooperation of public authorities with SMEs on flood