Creating resilient SMEs: Is business continuity management the answer?

According to the EU, during the past five years, small and medium enterprises(SMEs) have created 85% of new jobs and two-thirds of private sectoremployment in the region. SMEs are considered the backbone of the economy in Europe and represent more than 95% of enterprises in USA and Australia.They are considered more vulnerable to disasters because of their size. This paper argues, on the contrary, that SMEs also can be less vulnerable to sudden change than large corporations, drawing upon the ideas of Hayek and Taleb, andthat networks of SMEs may contribute to the overall resilience of society if certain criteria are met. With this in mind, this paper will be examining how to create resilient SMEs. A well-known concept in the field is business continuity management. BCM is defined as “a holistic management process that identifies potential threats to an organization and the impacts to business operations those threats, if realized, might cause, and which provides a framework for building organizational resilience with the capability of an effective response that safeguards the interests of its key stakeholders, reputation, brand and valuecreating activities. Resilience, on the other hand, is a concept that has gained popularity in the past years and for which several definitions can be found. In 2009, the United Nations defines it as: “the ability of a system, community or society exposed to hazards to resist, absorb, accommodate to and recover fromthe effects of a hazard in a timely and efficient manner, including through the preservation and restoration of its essential basic structures and functions.” This paper will define resilience and business continuity management by retracing the origins of both concepts through time. It will then compare them by highlighting their similarities and differences. Finally, it will provide recommendations on how SMEs can become more resilient.