6 Engagement of Small and Medium-Sized Manufacturing Enterprises …
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effective flood adaptation measures are being introduced, so that businesses remain
important for local employers and taxpayers (Linnenluecke and Griffiths 2015; Neise
et al. 2017). In order to demonstrate the potential of SMEs as a crucial player
on collaborate flood risk reduction Neise et al. (2019) found that micro-, smalland medium-sized enterprises in Jakarta and Semarang are willing to contribute to
join large-scale flood risk reduction measures (e.g., a polder system) if they receive
support from public authorities and the community. Hence, the enterprises are not
purely driven by their self-interest but rather are interested in participating in joint
activities that can substantially reduce the flood risk for all affected actors.
In the following, we propose policy instruments that can help to unfold the potential of SMEs in supporting the state authorities and the community on adaptation to
floods. Such integration could strengthen the flood governance in flood-prone coastal
cities.
First, the analysis has shown that particularly the SMEs can rarely adapt effectively
to flood events due to limited financial resources and strong competitive pressure.
Therefore, dynamic capabilities could be strengthened by the implementation of
business continuity management within small firms. Business continuity management encompasses managerial processes to identify risks that can impact critical
business processes. Based on this assessment—optimally—preventative measures,
preparedness activities, and response solutions are carried out (Disaster Recovery
Institute 2016; International Labour Organization 2011). Studies stress that SMEs
commonly lack to develop business continuity management independently (Disaster
Recovery Institute 2016; Kato and Charoenrat 2018). Therefore, it is suggested that
state authorities, business associations, or the chambers of commerce offer training
programs and raise the awareness of business continuity planning tools. This might
encourage SMEs to implement a business continuity planning in order to pursue a
more proactive flood adaptation strategy. Business continuity planning can be also
beneficial for the SMEs in order to improve their usually low level of competitiveness.
Second, the collaboration between SMEs and large enterprises should be encouraged. Usually, large firms own better dynamic capabilities (i.e., competencies and
resources) to develop sophisticated adaptation measures (Neise and Revilla Diez
2019). Therefore, it is recommended that these firms share their knowledge with
smaller firms. On the one hand, this might enhance the flood adaptation strategy
of SMEs and consequently, their viability. On the other hand, large firms can take
more attention to SMEs as critical suppliers. Consequently, the entire manufacturing
sector and even small firms could reduce their flood risk more effectively, through
an improved synchronization of individual measures. If large companies and SMEs
collaborate, it is possible that large-scale, more effective adaptation measures (e.g., a
polder system) can be implemented, for instance, in an industrial park. Moreover, the
manufacturing sector would become more competitive and create more jobs and tax
revenues; thus, could contribute to a more advanced regional development with lower
flood risk for the entire region (Neise et al. 2018). As stated above, the Indonesian
disaster management law already encourages corporate social responsibility activities by companies on disaster mitigation. This formal regulation should be enhanced
while large companies collaborate with local SMEs on flood adaptation.
115
effective flood adaptation measures are being introduced, so that businesses remain
important for local employers and taxpayers (Linnenluecke and Griffiths 2015; Neise
et al. 2017). In order to demonstrate the potential of SMEs as a crucial player
on collaborate flood risk reduction Neise et al. (2019) found that micro-, smalland medium-sized enterprises in Jakarta and Semarang are willing to contribute to
join large-scale flood risk reduction measures (e.g., a polder system) if they receive
support from public authorities and the community. Hence, the enterprises are not
purely driven by their self-interest but rather are interested in participating in joint
activities that can substantially reduce the flood risk for all affected actors.
In the following, we propose policy instruments that can help to unfold the potential of SMEs in supporting the state authorities and the community on adaptation to
floods. Such integration could strengthen the flood governance in flood-prone coastal
cities.
First, the analysis has shown that particularly the SMEs can rarely adapt effectively
to flood events due to limited financial resources and strong competitive pressure.
Therefore, dynamic capabilities could be strengthened by the implementation of
business continuity management within small firms. Business continuity management encompasses managerial processes to identify risks that can impact critical
business processes. Based on this assessment—optimally—preventative measures,
preparedness activities, and response solutions are carried out (Disaster Recovery
Institute 2016; International Labour Organization 2011). Studies stress that SMEs
commonly lack to develop business continuity management independently (Disaster
Recovery Institute 2016; Kato and Charoenrat 2018). Therefore, it is suggested that
state authorities, business associations, or the chambers of commerce offer training
programs and raise the awareness of business continuity planning tools. This might
encourage SMEs to implement a business continuity planning in order to pursue a
more proactive flood adaptation strategy. Business continuity planning can be also
beneficial for the SMEs in order to improve their usually low level of competitiveness.
Second, the collaboration between SMEs and large enterprises should be encouraged. Usually, large firms own better dynamic capabilities (i.e., competencies and
resources) to develop sophisticated adaptation measures (Neise and Revilla Diez
2019). Therefore, it is recommended that these firms share their knowledge with
smaller firms. On the one hand, this might enhance the flood adaptation strategy
of SMEs and consequently, their viability. On the other hand, large firms can take
more attention to SMEs as critical suppliers. Consequently, the entire manufacturing
sector and even small firms could reduce their flood risk more effectively, through
an improved synchronization of individual measures. If large companies and SMEs
collaborate, it is possible that large-scale, more effective adaptation measures (e.g., a
polder system) can be implemented, for instance, in an industrial park. Moreover, the
manufacturing sector would become more competitive and create more jobs and tax
revenues; thus, could contribute to a more advanced regional development with lower
flood risk for the entire region (Neise et al. 2018). As stated above, the Indonesian
disaster management law already encourages corporate social responsibility activities by companies on disaster mitigation. This formal regulation should be enhanced
while large companies collaborate with local SMEs on flood adaptation.