Priority resilience strategy for micro, small, and medium enterprises for dealing with natural disasters

Abstract

Micro, small, and medium enterprises (MSMEs) contribute significantly to the Indonesian economy. However, although the geographical location of Indonesia makes it susceptible to natural disasters, very little attention has been paid to the susceptibility of MSMEs to natural disasters. On average, MSMEs are fragile and need assistance in drawing up risk mitigation plans that can help them survive disasters. Moreover, no specific research has been conducted regarding MSMEs in the context of natural disasters. Therefore, this study proposes an MSME resilience measurement framework and provides examples of its application to MSMEs in Madura Island, Indonesia. This study aims to assist MSMEs and the government in determining priority strategies when dealing with natural disasters. A structured questionnaire was used to measure the resilience levels of MSMEs and identify a priority strategy for risk mitigation. Respondents in this study were the owners and leaders of 50 MSMEs in four regencies in Madura Island. The result of this study is a risk and resilience management model that demonstrates the cycle of resilience measurement and selection of mitigation strategies. The results of the resilience measurement of these MSMEs indicate that most have a low level of resilience and that priority strategies primarily involve efforts to improve the skills of human capital.