Resilience and recovery: SME experiences of extreme weather events and other external threats

Blundel, Richard; Baldock, Robert; Dadd, Deneise; Schaefer, Anja and Williams, Sarah (2014). Resilience and recovery: SME experiences of extreme weather events and other external threats. In: Institute for Small Business and Entrepreneurship (ISBE) 2014, 5-6 Nov 2014, Manchester.



Objectives: To examine how small and medium-sized firms deal with external shocks of various kinds, with particular reference to extreme weather events. The research asks how business owners and managers prepare themselves for these inherently uncertain events and how they deal with immediate impact on the business when it faced with an external crisis. It also explores the longer term effects of exposure to adverse conditions, to see whether these experiences tend to undermine businesses, or help to make them more resilient over time.

Prior Work: The research is informed by contributions to the resilience literature, which spans individual, organisational, inter-organisational and regional levels of analysis. It identifies a variety of factors as potential sources of resilience for smaller firms and potential vulnerabilities. Some empirical work has been conducted in this area but there is scope for a more in-depth examination of the ways that SME owners and managers perceive and prepare for external threats, their experiences in responding to crises, and implications of the promotion of environmentally sustainable practices.

Approach: Evidence was collected from a large quarterly survey of SMEs in Britain. Statistical findings are based on 1,353 useable questionnaire responses comprising a sub-sample drawn from a larger telephone omnibus survey, supplemented by a sub-sample of respondents to a slightly longer online version. The statistical data were augmented by qualitative evidence from online respondents and a series of six semi-structured interviews which explored issues emerging from the survey in greater detail.

Results: Organisational resilience is an important issue for SMEs. Nearly three quarters (73%) of respondents identified at least one external event that posed a ‘real threat’ to their business over the last five years and many identified multiple threats. Extreme weather conditions were identified as a real threat by 27% of respondents, a finding underlined by graphic qualitative accounts of damage caused to businesses by events such as flooding and heavy snowfall (n.b. the survey was conducted prior to the extended period of storms and flooding that disrupted many businesses in late 2013).

Value: This working paper makes an empirical contribution to the organisational resilience literature by providing evidence from a relatively large and broadly representative sample of British SMEs, coupled with tentative policy implications and suggestions for further research. Recent years have seen a policy focus on promoting high growth firms. Given continuing economic uncertainties and the prospect of increasing threats from extreme weather events, it may also be advisable to consider initiatives that foster the longer-term resilience of SMEs, and to pay particular attention to the needs of smaller and more vulnerable firms.

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