Understanding the adaptive capacity of Australian small-to-medium enterprises to climate change and variability

Abstract Small-to-medium enterprises (SMEs) comprise 96 per cent of all private businesses in Australia. The SME sector is the economy’s largest employer and the largest contributor to GDP. Moreover, SMEs play a significant role within socio-economic systems: they provide employment, goods and services and tax revenue for communities. Climate change may result in adverse business outcomes including business interruptions, increased investment and insurance costs, and declines in financial indicators such as measures of value, return and growth. After natural disasters, SMEs face greater short-term losses than larger enterprises, and may have lower adaptive capacity for various reasons. This study examines the underlying factors and processes shaping adaptive capacity of Australian SMEs’ to climate change and associated sea level rise. Specifically, the research asks the following questions: 1) How have SMEs considered and integrated adaptation into business planning? 2) What are the key underlying processes that constrain and influence the adaptive capacities of SMEs? and 3) What types of support are required to promote SME business continuity under a changing climate? The study adopts theories from Political Ecology and draws on literature on vulnerability and hazards to understand the processes that mediate the adaptive capacity of SMEs. The empirical research involved an online survey targeting SMEs, attending business engagement events hosted by chambers of commerce, 30 semi-structured interviews with secondary stakeholders, five case studies involving SMEs and secondary stakeholders, and finally a stakeholder workshop which brought together participants from both groups. The central conclusion of this study is that underlying contextual processes are critical to enhancing the adaptive capacity of SMEs. These processes include: the social relationships between SMEs and support organisations; the relationships within support organisations themselves; the agency of SMEs to direct resources toward building resilience into business continuity; SMEs’ perceptions of climate risks; and power struggles between support organisations. Unfavourable combinations of these processes have the potential to limit the adaptive choices that SMEs can adopt in order to overcome climate change and other related stresses on business continuity. These processes generate vulnerability and often occur at scales external to the SMEs;including relationships between different tiers of government as well as between various support organisations working with SMEs. These contextual processes have been largely overlooked in formal programmes that aim to build business resilience. The programmes have tended to be reactive and have tended to focus on business recovery during and after disasters rather than on altering the vulnerability context of SMEs through anticipatory prevention and preparedness or adaptation planning. This study suggests that the success of efforts to build the adaptive capacity of SMEs to future climate and related stresses will depend on how they address these underlying processes to facilitate the ability of SMEs to exercise their agency in pursuing adaptive choices that they value

Internal report cluster 1: Urban freight innovations and solutions for sustainable deliveries (2/4)

Technical report about sustainable urban freight solutions, part 2 of

ADB–OECD Study on Enhancing Financial Accessibility for SMEs: Lessons from Recent Crises

During the era of global financial uncertainty, stable access to appropriate funding sources has been much harder for small and medium-sized enterprises (SMEs). The global financial crisis impacted SMEs and entrepreneurs disproportionately, exacerbating their traditional financing constraints. The financial conditions of many SMEs were weakened by the drop in demand for goods and services and the credit tightening. The sovereign debt crisis that hit several European countries contributed to further deterioration in bank lending activities, which negatively affected private sector development. The global regulatory response to financial crises, such as the Basel Capital Accord, while designed to reduce systemic risks may also constrain bank lending to SMEs. In particular, Basel III requires banks to have tighter risk management as well as greater capital and liquidity. Resulting asset preference and deleveraging of banks, particularly European banks with significant presence in Asia, could limit the availability of funding for SMEs in Asia and the Pacific. Lessons from the recent financial crises have motivated many countries to consider SME access to finance beyond conventional bank credit and to diversify their national financial system. Improving SME access to finance is a policy priority at the country and global level. Poor access to finance is a critical inhibiting factor to the survival and growth potential of SMEs. Financial inclusion is thus key to the development of the SME sector, which is a driver of job creation and social cohesion and takes a pivotal role in scaling up national economies. The Asian Development Bank (ADB) and the Organisation for Economic Co-operation and Development (OECD) have recognized that it is crucial to develop a comprehensive range of policy options on SME finance, including innovative financing models. With this in mind, sharing Asian and OECD experiences on SME financing would result in insightful discussions on improving SME access to finance at a time of global financial uncertainty. Based on intensive discussions in two workshops organized by ADB in Manila on 6–7 March 2013 and by OECD in Paris on 21 October 2013, the two organizations together compiled this study report on enhancing financial accessibility for SMEs, especially focusing on lessons from the past and recent crises in Asia and OECD countries. The report takes a comparative look at ADB and OECD experiences, and aims to identify promising policy solutions for creating an SME base that is resilient to crisis, from a viewpoint of access to finance, and which can help drive growth and development

Access to finance and venture capital for industrial SMEs

SMEs play a crucial role for European economies. The numbers show the high importance of SMEs for national economies. Accordingly, it is no surprise that the regulatory framework SMEs are imbedded in is the subject of an important political discussion. In the discussion it is frequently mentioned by representatives of SMEs as well as associations of SMEs, that the access to finance for SMEs is still inferior. Based on the importance of SMEs for national economies and the discussion on the accessibility of financial resources for SMEs, it is the main objective of this study to provide solid data on the access of SMEs to financial resources. To provide the data, the study is focusing on four main issues. First of all, the importance of SMEs for national economies will be shown. After that the financing of SMEs in selected countries will be analysed. Then the availability of venture capital for SMEs will be discussed. Finally the tax regimes and the influence of the tax system on the access to finance for SMEs will be analysed. Since there is still a large variety among the tax systems of the European Union member states, the study has focused on Austria, France, Germany, Poland and the United Kingdom. --SME,financial structure,venture capital,tax framework,accounting standards

Reducing structural dominance and entry barriers in Russian industry

Many industrial firms in Russia have undergone changes in ownership, but relatively few have been competitively restructured. Using survey and other data, the author suggests that much of Russian industry is immune from robust competition because of heavy vertical integration, geographic segmentation, and the concentration of buyers and sellers, in selected markets. Moreover, regulatory constraints protect incumbent firms from competition with new entrants, both domestic and foreign. The author sketches a reform agenda for Russia's post-privatization program, which emphasizes the restructuring of anti-competitive structures and the reduction of barriers to entry. The author's proposed reform agenda calls broadly for strengthening Russia's nascent rules-based framework for competition policy to reduce discretion, increase transparency, and improve accountability.Markets and Market Access,Environmental Economics&Policies,Economic Theory&Research,Banks&Banking Reform,Small and Medium Size Enterprises,Environmental Economics&Policies,Economic Theory&Research,Private Participation in Infrastructure,Small Scale Enterprise,Microfinance

Internal report cluster 1: Urban freight innovations and solutions for sustainable deliveries (3/4)

Technical report about sustainable urban freight solutions, part 3 of