Lessons learnt about SME recovery from natural disasters

14 June 2012

Media Release: Palaver Media on behalf of ICSB

Lessons learnt about SME recovery from natural disasters

Don’t underestimate the ability of small businesses to adapt.

This was one of the key lessons about the way that small businesses responded in the aftermath of the Canterbury earthquakes, as shared this week with international visitors attending the World Conference of the International Council for Small Business (ICSB) in Wellington.

The topic of SME disaster recovery and risk management was fully explored in a session moderated by Peter Townsend, chief executive of the Canterbury Employers' Chamber of Commerce, with speakers from New Zealand (Mark Steel of MED), Australia (Barbara Cullen of Small Business Victoria), Japan/ India (researcher Prajakta Khare) and Dr Robert Lai of APEC’s dedicated SME Crisis Management Centre (apcecscmc.org)

Mark Steel drew attention to the nimble ability shown by Christchurch businesses to relocate to fortuitously under-tenanted business parks and other locations in order to recommence operations, but also noted the particularly harsh impact of the Canterbury earthquakes on tourism and export education.

Barbara Cullen spoke at length about the collusion of bushfires and floods in the state of Victoria over the last three years. A key element of the state government’s response targeted to small businesses was based around extensive use of face-to-face business mentoring. This was “amped up” by having a Mobile Business Centre on the road to travel between remote centres.

“Providing such a large amount of post-disaster business mentoring was expensive but it was effective,” said Ms Cullen. Because of the severity and ongoing nature of the disasters, business mentors had themselves required counselling.

Two other features of the responses had been “buy local” campaigns to provide a stimulus for local businesses and a focus on crisis essentials for tourism operators. Two observations Ms Cullen made were the value of spending time predicting sectors that are likely to be most in need after a disaster, as well as assessing the effects on an area if a local industry disappeared.

That kind of worst-case scenario was something that Prajakta Khare touched on in her presentation about the resilience shown by the unique community of ceramics producers in the Japanese township of Mashiko, a popular visitor destination that is almost entirely dependent on its historic cluster of potteries and that suffered almost total destruction when Japan was struck by last year’s massive earthquake.

In her paper – adjudged and awarded at the end of the conference to be “one of the best” – Ms Khare assessed the galvanising and unifying effect generated after the earthquake. Potters who had not really had much to do with each other began to become organised at a level that had previously been missing – from a concerted voluntary reconstruction effort through to the creation of new e-commerce sales channels and the formation of a new internationally focused society to increase the promotion and exhibition of Mashiko’s wares. Other activity included a special donation of large quantities of traditional pottery to tsunami affected regions and the re-use of broken ceramics in the interiors of buildings.

“In many ways the disaster created more opportunities for more informal interactions that were more profound,” said Ms Khare. “People were boosted out of a certain kind of inertia and can now benefit from more self-reinforcing mechanisms to remain more unified”.

Dr Lai’s speech focused on the importance of business continuity planning (BCP), joint studies by APEC on that topic and the formation of a new expert group on which New Zealand is represented by Erica Seville, a Research Fellow at Canterbury University.

ENDS

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