Climate change and construction sector SMEs:vulnerability, consequences and resilience

Climate change has become one of the prime challenges the society has to face in the future. As far as businesses are concerned, it also has added one other important issue that they have to consider as part of their business planning. Climate change is of significant importance particularly to the Small and Medium-sized enterprises (SMEs), which are considered as the most vulnerable among the business community to the effects of climate change. This paper presents the findings of a literature review conducted with the aim of identifying the specific importance of climate change to the construction sector SMEs. The objectives of the paper are to identify the vulnerability of construction sector SMEs to the effects of climate change, their consequences and also to identify the importance of improving resilience and implementing adaptive measures to manage these issues. The paper also outlines the directions of a study undertaken to address these issues as part of an EPSRC funded research project titled “Community Resilience to Extreme Weather Events – CREW”. The paper concludes by stressing the importance of improving the resilience of construction sector SMEs to climate change effects and also the importance of collective action in this regard.

Case study as a research strategy:investigating extreme weather resilience of construction SMEs in the UK

Determining an appropriate research methodology is considered as an important element in a research study; especially in a doctoral research study. It involves approach to the entire process of a research study, starting from theoretical underpinnings and spanning to data collection and analysis, and extending to developing the solutions for the problems investigated. Research methodology in essence is focused around the problems to be investigated in a research study and therefore varies according to the problems investigated. Thus, identifying the research methodology that best suits a research in hand is important, not only as it will benefit achieving the set objectives of a research, but also as it will serve establishing the credibility of the work. Research philosophy, approach, strategy, choice, and techniques are inherent components of the methodology. Research strategy provides the overall direction of the research including the process by which the research is conducted. Case study, experiment, survey, action research, grounded theory and ethnography are examples for such research strategies. Case study is documented as an empirical inquiry that investigates a contemporary phenomenon within its real-life context, especially when the boundaries between phenomenon and context are not clearly evident. Case study was adopted as the overarching research strategy, in a doctoral study developed to investigate the resilience of construction Small and Medium-sized Enterprises (SMEs) in the UK to extreme weather events. The research sought to investigate how construction SMEs are affected by EWEs, respond to the risk of EWEs, and means of enhancing their resilience to future EWEs. It is argued that utilising case study strategy will benefit the research study, in achieving the set objectives of the research and answering the research questions raised, by comparing and contrasting with the alternative strategies available. It is also claimed that the selected strategy will contribute towards addressing the call for improved methodological pluralism in construction management research, enhancing the understanding of complex network of relationships pertinent to the industry and the phenomenon being studied.

SME resilience to extreme weather events:important initiatives for informing policy making in the area

Enhancing the resilience of local communities to weather extremes has gained significant interest over the years, amidst the increased intensity and frequency of such events. The fact that such weather extremes are forecast to further increase in number and severity in future has added extra weight to the importance of the issue. As a local community consists of a number of community groups such as households, businesses and policy makers, the actions of different community groups in combination will determine the resilience of the community as a whole. An important role has to be played by Small and Medium-sized Enterprises (SMEs); which is an integral segment of a local community in the UK, in this regard. While it is recognised that they are vital to the economy of a country and determines the prosperity of communities, they are increasingly vulnerable to effects of extreme weather. This paper discusses some of the exploratory studies conducted in the UK on SMEs and their ability to cope with extreme weather events, specifically flooding. Although a reasonable level of awareness of the risk was observed among the SMEs, this has not always resulted in increased preparedness even if they are located in areas at risk of flooding. The attitude and the motivation to change differed widely between SMEs. The paper presents schemas by which the SMEs can identify their vulnerability better so that they can be populated among a community of SMEs, which can be taken forward to inform policy making in this area. Therefore the main contribution the paper makes to the body of knowledge in the area is a novel way to communicate to SMEs on improving resilience against extreme weather, which will inform some of the policy making initiatives in the UK.

Reinstatement of flood affected properties:experiences of SMEs affected by the 2009 Cockermouth flood event

Recent policy changes in the UK encourage at-risk communities to learn to live with and adapt to flooding. Adaptation of individual properties by embracing resilient and resistant measures is an important aspect endorsed therein. Uptake of such protection measures by property owners, including that of Small and Medium-sized Enterprises (SMEs), has traditionally been low. A post-flood situation offers an opportunity to reinstate / reconstruct by integrating flood protection measures, in such a way that reduce damage and enhance the ability to recover in the event of a future flood incidence. In order to investigate the reinstatement / reconstruction experiences of flood affected SMEs, those affected by the 2009 Cockermouth flood event were studied. The results of a questionnaire survey revealed that many SMEs have opted for traditional reinstatement rather than resilient reinstatement. A detailed case study revealed requirements of getting the business back and running as soon as possible, a lack of guidance and advice from professionals and financial concerns as some of the barriers faced by SMEs. It is important that SMEs are provided with necessary guidance during the post-flood reinstatement stage, in order to make sure that the opportunity to build back better, integrating flood-protection measures is grasped by the SME owners. Stakeholders related to the construction industry, who are actively involved with post-flood reinstatement work, have an important role to play in this regard, providing necessary guidance and expertise to flooded SMEs.

Impacts of flooding on SMEs and their relevance to chartered surveyors:

This is the final report of the RICS Education Trust funded “Developing Flood Expert Knowledge in Chartered Surveyors – DEFENCES” research project. The UK has endured a number of major flood events in recent years, and the UK Environment Agency (2009a) identified that about 5.2million properties in England, amounting to one in six, are at risk of flooding. The impacts of flooding include direct and indirect impacts and can be particularly devastating for small and medium-sized enterprises (SMEs) who are generally more vulnerable to such events than larger business organisations. Recent flood events have established how costly flooding can be to the SME sector (Pitt, 2008, ABI, 2010), which has given greater impetus to the need to improve the resilience of at-risk SMEs. A lack of professional advice on flood protection and adaptation measures represents a potential barrier to the uptake of such interventions by SMEs. A recent Royal Institution of Chartered Surveyors (RICS) survey, as quoted in Defra (2008) notes that, although a majority of chartered surveyors would like to work in this area of practice (flood risk assessment and adaptation), they are conscious of gaps in their competency, knowledge and understanding. The research project sought to contextualise this broader issue and investigate how chartered surveyors can bridge the gap in providing professional flood advice to SMEs. Further, a shift in the UK government policy on flood risk management is evident, where at-risk communities are urged to adapt to flooding. This places greater emphasis on property-level flood adaptation, providing further impetus for Chartered Surveyors to be involved. Findings of the research will be of interest to the RICS, the RICS Flood steering Group, practicing surveyors generally, SMEs, business support and policy making organisations.

Coping with extreme weather:strategies of construction SMEs

Weather extremes have created a considerable impact on Small and Medium-sized Enterprises (SMEs) in the UK during the recent years, especially on SMEs in the construction sector. Evidence in relation to the recent weather extremes have demonstrated that SMEs are some of the worst impacted by the Extreme Weather Events (EWEs) and have confirmed them as a highly vulnerable section of the UK economy to the impact of extreme weather. This is of particular importance to the construction industry, as an overarching majority of construction companies are SMEs who account for the majority of employment and income generation within the industry. Whilst construction has been perceived as a sector significantly vulnerable to the impacts of EWEs, there is scant evidence of how construction SMEs respond to such events and cope with their impact. Based on the evidence emerged from case studies of construction SMEs, current coping strategies of construction SMEs were identified. Some of the strategies identified were focused at organisational level whereas others were focused at project level. Further, some of the strategies were general risk management / business continuity strategies whereas others have been specifically developed to address the risk of EWEs. Accordingly, coping strategies can be broadly categorised based on their focus; i.e. those focused at project or organisational level, and based on the risks that they seek to address; i.e. business / continuity risks in general or EWE risk specifically. By overlapping these two aspects; their focus and risks that they seek to address, four categories of coping strategies can be devised. There are; general risk management strategies focused at business level, general risk management strategies focused at project level, EWE specific strategies focused at business level, and EWE specific strategies focused at project level. It is proposed that for a construction SME to effectively cope with the impact of EWEs and develop their resilience against EWEs a rich mix of these coping strategies are required to suite the particular requirements of the business.

Intellectual property enforcement in smaller UK firms:findings from a survey in 2009-10

This report details research into the enforcement of intellectual property (IP). It considers the attitudes and practices of small and medium-sized enterprises (SMEs) and micro firms as well as the cost implications of the present IP enforcement system in the UK. According to an earlier report for SABIP, by Weatherall et al. 2009, in the Gowers Review of Intellectual Property questions of enforcement were largely addressed through assertion, rather than empirical research. This report aims to provide such research. Our study included both an online survey and a phone survey. These concentrated on SMEs and micro firms rather than being a comparative study with large firms. Further work obtained information on Patents and Registered Design cases listed for hearings in the Patents Court from 2003 to 2009. The analysis of this data provides some evidence that complements the results of the survey.

Intellectual property enforcement in smaller UK firms:a report for the Strategic Advisory Board for Intellectual Property Policy (SABIP)

This report details research into the enforcement of intellectual property (IP). It considers the attitudes and practices of small and medium-sized enterprises (SMEs) and micro firms as well as the cost implications of the present IP enforcement system in the UK. According to an earlier report for SABIP, by Weatherall et al. 2009, in the Gowers Review of Intellectual Property questions of enforcement were largely addressed through assertion, rather than empirical research. This report aims to provide such research. Our study included both an online survey and a phone survey. These concentrated on SMEs and micro firms rather than being a comparative study with large firms. Further work obtained information on Patents and Registered Design cases listed for hearings in the Patents Court from 2003 to 2009. The analysis of this data provides some evidence that complements the results of the survey.

Attitudes towards and perceptions of entrepreneurs in Central Eastern Europe (Poland, the Czech Republic, and East-Germany)

This paper explores attitudes and perceptions towards entrepreneurs in three Central Eastern European (CEE) countries undergoing transition from planned to market-based economic systems. Entrepreneurs and small and medium-sized enterprises (SME) play a critical role in this transformation process. Study one examines whether governments and general public are perceived as supportive of entrepreneurs. Such perceptions might eventually increase the number of entrepreneurs as it would be seen as a legitimate career choice (cf. Etzioni, 1987). Study two explores whether the concept ‘entrepreneur’ is interpreted in the same way in the three cultures using a student sample. Cross-cultural aspects and support measures for entrepreneurship are discussed.

Estimating the impact of R&D on productivity using the BERD-ARD data

The UK has a relatively low ratio of business R&D to GDP (the BERD ratio) compared to other leading economies. There has also been a small decline in UK’s BERD ratio in the 1990s, whereas other leading economies have experienced small rises. The relatively low BERD ratio cannot be explained solely by sectoral or industry-level differences between the UK and other countries. There is, therefore, considerable interest in understanding the firm-level determinants of investment in R&D. This report was commissioned by the DTI to analyse the link between R&D and productivity for a sample of firms derived from merging the ONS’s Business Research and Development Database (BERD) and the Annual Respondents Database (ARD). The analysis estimates the private rates of returns to R&D, and not the social rates of return, since it is the private returns that should drive firms’ decisions. A key objective of this research is to analyse the productivity of R&D in small and medium sized enterprises (SME). The analysis is intended to allow comparisons to the results in Rogers (2005), which uses publicly available data on R&D in medium to large UK firms in the 1990s.

On the compatibility of benevolence and self-interest:philanthropy and entrepreneurial orientation

This article explores the philanthropy of owner–managers of small- and medium-sized enterprises (SMEs) investigating whether and why more entrepreneurially oriented SMEs are also more likely to engage in philanthropic activities. We find support for a positive link between entrepreneurial orientation (EO) and philanthropy in a representative sample of 270 Lithuanian SMEs controlling for alternative explanations. We highlight that philanthropy is relatively common among SME owner–managers and thus complement existing research which views philanthropy as sequentially following wealth generation. In line with our theorizing, further qualitative findings point to drivers of philanthropy beyond those considered in the dominant strategic-instrumental perspective. Building on social-psychological theories of motivation, we argue and confirm that philanthropy can also be an expression of owner–managers’ altruistic values; these values can be compatible and even mutually reinforcing with entrepreneurship. Our study is set in a transition economy, Lithuania, facilitating the analysis of heterogeneity in attitudes toward philanthropy.

Development of a digital tool to overcome the challenges of rural food SMEs

It has been recognised that throughout the UK, rural economies have a significant potential for growth but despite the potential for growth, many rural businesses face barriers that prohibit their expansion. In this study, we focus on one particular group of rural small- to medium-sized enterprises (SMEs): food and drink producers. Through user engagement activities, we identify the issues and needs associated with distributing products to the market, in order to understand the main issues which prevent rural food and drink SMEs from expansion, and to establish the requirements for a digital solution to this challenge.

Regional growth and SMEs in Brazil:a spatial panel approach

Cravo T. A., Becker B. and Gourlay A. Regional growth and SMEs in Brazil: a spatial panel approach, Regional Studies. This paper examines economic growth for a panel of 508 Brazilian micro-regions for the period 1980-2004, using spatial econometrics and paying particular attention to the importance of small and medium-sized enterprises (SMEs). The findings indicate the presence of spatial dependence in the process of economic growth and the existence of two spatial regimes in Brazil. The human capital level of the whole population is an important growth determinant, but does not generate positive spillovers. Furthermore, human capital embodied in SMEs is more important than the size of this sector for regional growth and SME activity generates positive spatial spillovers. © 2014 © 2014 Regional Studies Association.

Decision support system for vendor managed inventory supply chain:a case study

Vendor-managed inventory (VMI) is a widely used collaborative inventory management policy in which manufacturers manages the inventory of retailers and takes responsibility for making decisions related to the timing and extent of inventory replenishment. VMI partnerships help organisations to reduce demand variability, inventory holding and distribution costs. This study provides empirical evidence that significant economic benefits can be achieved with the use of a genetic algorithm (GA)-based decision support system (DSS) in a VMI supply chain. A two-stage serial supply chain in which retailers and their supplier are operating VMI in an uncertain demand environment is studied. Performance was measured in terms of cost, profit, stockouts and service levels. The results generated from GA-based model were compared to traditional alternatives. The study found that the GA-based approach outperformed traditional methods and its use can be economically justified in small- and medium-sized enterprises (SMEs).

A conceptual framework for understanding resilience of construction SMEs to extreme weather events

Purpose Small and Medium-sized Enterprises (SMEs), which form a significant portion in many economies, are some of the most vulnerable to the impact of Extreme Weather Events (EWEs). This is of particular importance to the construction industry, as an overarching majority of construction companies are SMEs who account for the majority of employment and income generation within the industry. In the UK, previous research has identified construction SMEs as some of the worst affected by EWEs. Design/methodology/approach Given the recent occurrences of EWEs and predictions suggesting increases in both the intensity and frequency of EWEs in the future, improving the resilience of construction SMEs is vital for achieving a resilient construction industry. A conceptual framework is first developed which is then populated and expanded based on empirical evidence. Positioned within a pragmatic research philosophy, case study research strategy was adopted as the overall research strategy in undertaking this investigation. Findings Based on the findings of two in-depth case studies of construction SMEs, a framework was developed to represent EWE resilience of construction SMEs, where resilience was seen as a collective effect of vulnerability, coping strategies and coping capacities of SMEs, characteristics of the EWE and the wider economic climate. Originality/value The paper provides an original contribution towards the overarching agenda of the resilience of SMEs, and policy making in the area of EWE risk management by presenting a novel conceptual framework depicting the resilience of medium-sized construction companies.