Engagement of Small and Medium-Sized Manufacturing Enterprises in Individual Flood Adaptation in Indonesian Coastal Cities—Implications for Flood Governance

Flood risk in urban coastal areas is on the rise due to increased population, urban growth, environmental degradation, and climate change impacts. State authorities are often overstrained to provide adequate flood risk reduction, including for small and medium-sized manufacturing enterprises (SMEs), the backbone of urban economies in Indonesia. SMEs are oftentimes located in coastal areas or along rivers and are frequently affected by flooding. Hence, they are forced to adapt individually in order to protect their investment goods, maintain their production processes, and secure livelihoods of owner and employees. This chapter investigates how SMEs in urban areas are exposed to and respond to floods. We analyze which kind of flood adaptation measures SMEs implemented and why. The paper also examines the enablers and barriers to convene SMEs around collective flood adaptation measures in order to alleviate flood risk more substantially. The study uses a mixed-method approach and takes Jakarta and Semarang as examples for the empirical research. Interviews with representatives of firms, business associations, industrial parks management, and public authorities give an understanding of SMEs’ adaptation challenges. A quantitative survey of 120 participants presents an overview of chosen firms’ individual flood adaptation measures. The analysis shows that SMEs rely on incremental flood adaptation measures (e.g., elevating, pumps) and barely engage in more substantive or transformative risk reduction measures. The SMEs hesitate to engage in collective flood adaptation strategies due to a lack of joint governance mechanisms and sparse support from public authorities and managers of industrial parks. In sum, the chapter provides relevant results for policy design, suggesting a stronger integration of SMEs into integrative flood adaptation policy in Indonesian coastal cities.