BCP Status of the SMEs in
the Asia-Pacific Region 2012

Asian Disaster Reduction CenterContentsContents............................................................................................................................... 2
1. Executive Summary ......................................................................................................... 3
2. Introduction ...................................................................................................................... 4
2.1 Background ................................................................................................................... 4
2.2 Purpose......................................................................................................................... 4
2.3 Methodology ................................................................................................................. 5
2.4 Survey coverage ........................................................................................................... 5
3. Survey Results and Findings ........................................................................................... 7
3.1 Potential Threats and Disaster Experiences ................................................................ 7
3.2 Adoption and Awareness .............................................................................................. 8
4. Discussion...................................................................................................................... 12

Asian Disaster Reduction Center 201221. Executive Summary
The purpose of this report is to summarize the findings of a 2012 regional survey
focused on private sector preparedness of small and medium-sized enterprises(SMEs) among APEC economies conducted by the Taiwan Institute of Economic
Research (TIER) and supported by the Asian Disaster Reduction Center (ADRC).
This is part of an APEC SMEWG project on improving the natural disaster
resilience of SMEs to facilitate trade and investment, which was proposed by
Chinese Taipei in 2011.
The following are key conclusions drawn from the survey’s findings:•Potential threats vary by economy‒ Potential threats vary depending on the situation. Earthquakes,floods, fires, and blackouts are the major threats indicated.

•BCP development and awareness level of SMEs is still low‒ Only 13% of SME respondents have a business continuity plan(BCP) while 34.8% are in the process of developing one. Almost
half of respondents do not know anything about BCPs.
‒ There is a substantial difference in the level of BCP awarenessbetween respondents that have actually experienced a disasterand those that have not.

•Process of BCP development‒ Many indicated that the reason they developed a BCP was toengage in good business practice and develop a risk management
strategy‒ Many SMEs refer to general guidelines and effectively use various
public support systems in the process of BCP development.

•Obstacles identified‒ The main obstacles for many respondents that don’t have a written
BCP are “lack of company BCP knowledge and expertise” and“lack of information needed for BCP development.”

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2. Introduction
2.1 Background
The APEC region accounts for approximately 40% of the world's land area, morethan 40% of its population, and around half of global GDP, yet regrettably
sustains almost 70% of the world’s natural disasters. One lesson learned frompast catastrophic events such as the Great Hanshin-Awaji Earthquake,
Hurricane Katrina, and the Great East Japan Earthquake, is that the private
sector plays an important role in reducing economic damage and regional
impacts when they are well prepared for disasters. SMEs account for 90% of allprivate sector companies and employ well over half of the workforce in themajority of economies in the region.
As its supply chains are closely intertwined, a single disaster could affect theeconomic activities of the entire APEC region. APEC therefore needs tostrengthen the private sector's capacity for disaster preparedness and recovery,
especially focusing on SMEs, by promoting BCP adoption in APEC member
economies.
This survey focused on SMEs and was conducted in 2012 by TIER andADRC. The results were combined with those from a study conducted by ADRC
in 2011 to provide a better understanding of the current status of BCP adoption
and the level of BCP awareness among private sector SMEs in the APEC region.
http://publications.apec.org/publication-detail.php?pub_id=1234

2.2 Purpose
Objective‒

Understand the current BCP adoption status of the private sector in theAPEC region.

Expected Outcomes– Understand the current situation in each economy and industrial sector.
– Identify and clarify the bottlenecks and problems for BCP developmentand implementation.
– Gather the information that policy makers need to enhance future
strategies.

– Share knowledge and better practices throughout the region.
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2.3 MethodologySurvey Method– Web-based online survey
Survey Period– June to November 2012
– The results of 2012 Survey were combined with those from astudy conducted by ADRC in 2011 to provide a better
understanding of the current status of BCP adoption and the levelof BCP awareness among private sector SMEs in the APEC
region.
Questionnaire Content

Small and Medium-Sized Enterprises (SME)– Defined in this study as private organizations with fewer than 300
employees

2.4 Survey Coverage‒‒‒Year 2011
Year 2012
Total

145 responses from 17 economies
262 responses from 13 economies407 responses from 18 economies

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Number of Respondents by Economy
Australia
Brunei Darussalam
CanadaChile
China
Hong Kong, China
Indonesia
JapanKorea
Malaysia
MexicoNew Zealand
PNG
Peru
The Philippines
RussiaSingapore
Chinese Taipei
Thailand
United States
Viet Nam
0204060

80

100

120

14080100

Industrial Sectors of Respondents
Agriculture, forestry and fishery
Mining and quarrying
Manufacturing
Electricity, gas, steam
Water
Construction
Wholesale and retail trade
Transportation and storage
Accommodation and food service
Information and communication
Financial and insurance
Real estateProfessional, scientific and technical
Administrative and support service
Education
Human health and social work
Other service
Extraterritorial organizations
Other0Asian Disaster Reduction Center 2012

2040606

3. Survey Results and Findings
3.1 Potential Threats and Disaster Experiences•The potential threats vary by economy. Earthquakes, floods, fires, andblackouts are the major threats.

Potential Threats

Earthquake

211

Tsunami80

Hurricane / Wind storm

101

Flood

179

Snow

23

Fire

214

Wild fire

34
44
42
38

Volcano eruption
Drought
Insect Infestation
Pandemic / Epidemic

93Blackout188

Terrorism102Nuclear

60050100150200250

Number of Respondents by Economy*more than
5 answers

Earthquake Tsunami

Hurricane /FloodWind storm

Snow FireWild
fire

Volcanoeruption

Drought

InsectPandemic /Blackout Terrorism Nuclear
Infestation Epidemic

Australia

10230

1002012

10Brunei Darussalam

300

30200

1

13202

Indonesia

108

180

52

102

16591Japan

27

102

30

110

10041333Korea

3132

1800001402Malaysia

543152953447843New Zealand

522

10

30

10

12000The Philippines

54141547041

41511101132

145Russia

42

1138

40

1376

16

513132067

32

19Singapore

654

9117

12121717

12

4

Chinese Taipei

29919

17

3

21

1233

1122

611Thailand

1210

720

2

103

4

53

5

9

14

8Viet Nam

53

2

50

4

2

100

1

3

3

1

Asian Disaster Reduction Center 20127

3.2 Adoption and Awareness•Of all respondents, 13% indicate that their companies have a BCP. Onthe other hand, 47% of respondents are unaware of BCPs.

•Responses demonstrated substantial differences in terms of the levelof BCP development and awareness between respondents that haveactually experienced disaster and those that have not.

BCP Development Status
Do you have a BCP?

Disaster ExperienceHas your company ever been seriously disrupted by a disaster?
Yes 24%

Asian Disaster Reduction Center 2012

No 76%

8

3.3 Process of BCP Development•Many respondents began to develop their BCPs spontaneously,identifying the reasons as “for risk management of [their] company”
or “for good business practice.” The number of respondents thatdeveloped BCPs because of the requirements of their stakeholders isrelatively small.

•Many SMEs refer to general guidelines and effectively use various
public support systems in the process of developing their BCPs.

•The top three obstacles for respondents that don’t have written BCPs
are “lack of company BCP knowledge and expertise,” “lack ofinformation needed for BCP development,” and “management’s lowawareness,” in descending order.

Reasons or trigger events that motivated your company to develop a BCP

53

For good business practice58For risk management of your company
From the disaster experience of your company

15

Legal requirement

14
19

Customers’ requirement
Share holders’ requirement

5Bank/creditor’s requirement

5Parent company or holding’s requirement

7

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How did your company build a BCP?

Refer to general guidelines published by central /local government

26

Refer to Sector specific guidelines published byeach industrial association

18

Refer to guidelines of BCP standards, e.g.
BS25999, NFPA1600, etc.

1512Refer to text books

23

Advised from consultants

Useful Public Support Systems

13

Funding support

12

Providing disaster information

13

Training support

12

Providing toolkit

Sending experts

Asian Disaster Reduction Center 2012

710

Obstacles for Preparing a BCP

48

Management’s awareness is low

45

Employee’s awareness is low
Difficulties coordinating within the company

2459

Lack of information for building BCP

46

Lack of human resources

67

Lack of company BCP knowledge and expertise45

Lack of budget
No need for written plan

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4. Discussion
The lessons learned from past catastrophic events show that the private sector
plays an important role in reducing economic damage and regional impacts
when they are well prepared for disasters. SMEs employ well over 50% of theworkforce in the APEC region and are also uniquely positioned to bringcommunities back from devastation, as they have existing relationships with theaffected population and a vested interest in promoting a speedy recovery. APEC
therefore needs to strengthen the capacity of SMEs for disaster preparedness
and recovery by promoting BCP development among APEC member
economies.
The following are key suggestions for encouraging the adoption of BCPs
among APEC economies, drawn from the survey’s findings.
• Raise public awareness of BCPs, especially among SMEs

We found a low level of awareness of BCPs in SMEs across alleconomies. We should first share good practices for raising awareness of
the importance of having a BCP by utilizing BCP guidelines and toolkits
commonly used in advanced companies. Second, we should pay more
attention to supply chain management, maintaining close relationships
between relevant communities and public institutions and agencies, in aneffort to promote public-private partnerships (PPP). We have observed
situations in which supply chain disruptions in one economy impacted
many other economies (e.g., the automobile industry in the Great East
Japan Earthquake, 2011). Therefore, considering issues of supply chain
management is imperative when developing a business continuity
strategy. Also, working cooperatively with suppliers, including those indifferent economies, on BCP development will improve the BCP status ofemerging economies.
• Eliminated obstacles to BCP development
Our survey shows the following obstacles to BCP development:• Lack of BCP leadership among top management• Lack of skills and knowledge• Difficulty in securing human resources• Low awareness among employees
Asian Disaster Reduction Center 201212• Lack of budget for BCP tasks
These all are critical factors for BCP development. Therefore, eacheconomy should make an effort to remove these obstacles.

•Expand effective public support systems and resources available toSMEs
We found that BCPs are least well known among SMEs. SMEs are thepredominant firms within APEC member economies, and they employ alarge percentage of the region’s work force. However their limited
resources and skills make them more vulnerable.
Our survey indicates that public supports are effective for SMEs.
Therefore, we should expand the public support systems and resources
available to SMEs. First, public support should be used to enhance theBCP awareness of SMEs by providing them with disaster information e.g.
historical data, hazard maps and early warning. Second, BCP guidelines,
standards, and toolkits should be issued to help SMEs acquire the skills
and knowledge they need to develop their BCPs.

Asian Disaster Reduction Center 201213BOX
Role of SMEs / Aspects by Industries
When disasters cause business activity to stagnate, the impacts are felt not only
by individual companies, but also in the employment levels and the overall
economy of the stricken region. When trade and commerce are conducted withbusinesses in other areas, the economic damage can also affect far away
regions through supply chains. A business continuity plan (BCP) is a holistic planthat identifies the potential impacts and critical operations of an organization
prior to the occurrence of a disaster and outlines the effective response andquick recovery measures a business can take to continue its operations at
acceptable levels and avoid various disruptions for a specified period of time.
The process of developing and installing a BCP strategically within anorganization is referred to as business continuity management (BCM).
The earthquake that struck on March 11, 2011 impeded or suspended businessproduction in the affected regions, disrupting supply chains and affecting
businesses across Japan. Since business activities in the manufacturing sector
do not take place solely between manufacturers and their direct suppliers andcustomers, disruptions to one link of a supply chain can easily have implications
around the globe. This disaster caused 656 small and medium-sized enterprises(SMEs), which employed 10,757 workers, to go bankrupt within one year. But
only 79 of those SMEs (12%), were located in the Tohoku region; the others
were located all over Japan. The bankruptcies of the latter group were attributed
to indirect losses or damage caused by disruptions in their supply chains. Risk
management efforts aimed at tackling emergency situations are therefore
expected to assume greater importance in business in the future.
The Thailand Flood of 2011 also affected many enterprises outside of Thailand
through supply chain disruptions. The APEC region’s supply chains are closelyintertwined, such that a single disaster can affect the economic activities of theentire region. It is therefore essential that urgent efforts be made to strengthen
the private sector’s capacity for disaster preparedness and recovery bypromoting BCP development among APEC member economies. It is importantto note that SMEs are critical players in supply chains and regional economies,
though their level of business continuity preparedness has been shown to be
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insufficient.
Based on past experience, private sector businesses have changed theirmindsets toward disaster preparedness and business continuity strategies. The
construction industry plays a role in debris removal and infrastructure repair tofacilitate a speedy resumption of everyday activities, supermarkets play a role inproviding evacuation shelters and delivering relief supplies to communities, andthe logistics industry plays a role in securing multiple channels for the delivery ofgoods by preparing fuel and drivers. Since the roles they play in a disaster differ
by industry, businesses need to take those roles into consideration as they
develop their own business continuity strategies.
In logistics, on-time delivery and reliability are key issues to ensuring customer
satisfaction. During ordinary times, logistics functions are essential to aneconomy. But when a disaster occurs, these functions become much more
important in terms of their social impact, enabling local governments to deliver
relief goods, such as food, drinking water, and daily goods to the affected areas.
Many logistics firms conclude disaster support agreements with localgovernments prior to the occurrence of a disaster, making it critical to arrange
and secure in advance the emergency drivers who will be needed as part of theirbusiness continuity strategies.
Manufacturing companies in such industries as ICT, semiconductors, andautomobiles are introducing just-in-time strategies by reducing inventory. Given
recent experiences with supply chain disruptions, however, many manufacturers
have begun examining their suppliers’ BCP status as well. They are examining
not only their primary suppliers, but also their secondary and tertiary suppliers.
As SMEs lack the financial resources to prepare multiple work sites, they are
considering cooperative network arrangements with same-industry partners inremote geographical locations that can provide mutual support in the event of amajor disaster.
Because social functions and stakeholders in modern developed societies arehighly interconnected and interdependent, any disruptive incident can haveregion-wide impacts. A single incident can have an extensive impact both
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domestically and internationally when supply chains and value chains areundermined. The private sector plays a major role in creating employment andsupporting the local economy, thereby ensuring regional sustainability. In theevent of a disaster, the role of the private sector becomes even more importantin this respect. Effective cooperation among disaster-resilient private sector
players helps ensure a resilient and sustainable civil society.
It is important to note that one lesson learned from past catastrophic events suchas the Kobe Earthquake, Hurricane Katrina, the Great East Japan Earthquake,and the Thailand Flood is that private sector enterprises including SMEs play animportant role in reducing national and regional economic damage when theyare well prepared.

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