Doing Business Underwater:

Rebecca Messham BSc, MSc

(University of Hull)

Supervisors:

Professor Greg Bankoff (University of Hull)

Dr Martina McGuinness (University of Sheffield)

Flooding, Entrepreneurship

and Resilience

Doing BusinessUnderwater:

Doing BusinessUnderwater:

Doing BusinessUnderwater:

Introduction• Philip Eden (2008) 153 individual cases of flooding

since 1950

• 185,000 commercial properties in England and Wales at risk of flooding (Environment Agency 2009)

• SME - employs less than 250 people and has an annual turnover of less than €50 million Euros (European Commission, 2003)

• Hull and Sheffield home to 26,905 SMEs (Office of National Statistics (2009)

• Loss of a number of SMEs could damage the economy, reduce employment opportunities and dissolve the presence of social capital

Research QuestionsWhat kind of risk have floods posed to Small and

Medium Sized Enterprises (SMEs) over the last 60years?

1. To what extent and in what ways are Small and Medium Sized Enterprises in Hull and Sheffield vulnerable to flood?

2. How has the vulnerability of Small and Medium Sized Enterprises in Hull and Sheffield changed over the past 60 years?

3. How do Small and Medium Sized Enterprises perceive flood in relation to other risks, including physical and business risks?

4. To what extent do Small and Medium Sized Enterprises experience of flood in Hull and Sheffield provide insights into evolving concepts of risk?

Key Terms

• Flood:• “Temporary covering of land by water as a result of

surface waters escaping from their normal confines or as a result of heavy precipitation” (Kron, 2005, p58)

• Vulnerability:• “The characteristics of a person or group and their

situation that influences their capacity to anticipate, cope with, resist and recover from the impact of a natural hazard” (Wisner et al. 2008, p11)

• Resilience:• “The ability to bounce without breaking” and a

“deliberate effort to become better able to cope with surprise” (Wildavsky, 1988, p98)

Methodology

• Three step methodology

• Secondary data analysis:• Relevant literature, reports,

newspapers, conference papers, photographs

• Semi-structured interviews:• 38 in total – 22 in Sheffield, 16 in Hull

• Questionnaire:• 3000 distributed – 2000 in Sheffield,

1000 in Hull – 8.4% response rate

The Nature of SMEs in Hull and Sheffield

• Yorkshire (2008):• 345,805 SMEs employing 1.9 million and

generating a turnover of £188,273 million

• Hull and Sheffield (2008):• Home to 26,905 SMEs, 88.9% of businesses in

Hull and 91.6% in Sheffield• Disproportionately prominent in the two cities• Fragile Economies

• Vital that SMEs are aware of the nature of hazards

that can impact their business in order to improve

their resilience and reduce their vulnerability

Hull - 1969

Sheffield - 2007

Hull - 2007

Sheffield - 1993

The Nature of Flooding in Hull and Sheffield

• Vulnerable Locations:• Hull:

• North Bank of River Humber• West of River Hull• 90% built on reclaimed marshland• Drainage system entirely pumped

• Sheffield:• Seven Hills• Five Rivers• Cities lowest point 10 metres above sea level

• Vulnerable Population:• Kingston upon Hull has the greatest concentration of

people and properties at risk of flooding outside London (Environment Agency, 2010)

The Changing Nature of Flooding

• Causes:• From natural to social construction or

manufactured

• Physical Characteristics:• Frequency, magnitude, flow dynamics

• Values:• When floods occur they have a bigger impact

• An ‘Old’ or ‘New’ Risk?:• Is flooding new to society or does it occur in

cycles?

To what extent do you believe that the following are exposed to the risk of flooding?

0

10

20

30

40

50

60

No Opinion Not Exposed Slightly Exposed Moderately Exposed Extremely Exposed

Response

Pe

rce

nta

ge

Combination

Hull

Sheffield

SME Perception of Flood Vulnerability

Flood Impacts (1)

DIRECT

• Damage to business premises• Emotional response• Loss of/damage to stock• Loss of productivity• Loss of amenities• Higher insurance premiums• Loss of access to site• Loss of company vehicles• Closure of business for

prolonged period of time• Damage to company contents• Staff trapped• Bad smells• Grief• Problems with drainage• General disruption and

inconvenience

INDIRECT

• Supply chain disruption• Impact on social life• Presenteeism• Impact on customers• Impact on staff• Loss of reputation of business

and area• Potential for looting• Loss of profit• Heightened flood awareness• Costs of recovery• Uncertainty• More work opportunities• Unpredictable timekeeping• Bankruptcy• Backlog of work• Cancellations• Staff absence of staff leaving

company• Disrupted cash flow

Flood Impacts (2)

• Presenteeism:• “Having said that, I don’t think that time was particularly

productive”

(Male, Director, Consultants, Hull)

• Impact on social life:• “I was actually on holiday on that particular day… drove back from

Cornwall that night and got back at about midnight”

(Female, Manager, Pharmacy, Sheffield)

• Emotional crutch:• “A lot of these people we did know them to start with...they are

saying “oh god my house is all gone, and I’ve lost all my pictures and what can you really say to them?”

(Female, Manager, Bakery, Hull)

Phases of Recovery• Primary:

• “Yeah we saw it and reacted to it and got everything off the ground.”

(Male, Partner, IT Company, Hull)

• “So they stopped it coming through the doors, but it basically came underneath and started just coming through the walls. And so at that point, once it had breached the walls they just decided that’s it, we’re going.”

(Female, Owner, Market research Company, Hull)

•Secondary:•Secondary:

• Secondary:• The amount of silt, took three weeks, three to four weeks to get it

all sorted out. To shovel it all out and get it all decontaminated. There was fish and all sorts.”

(Male, Owner, Timber Merchant, Sheffield)

• Tertiary:• “It was just sole destroying. It probably took about another six to

eight months for us to recover”

(Female, Manager, Pharmacy, Sheffield)

Flooding As An Opportunity

“these floods are a good little money earner – it’s just knowing where to hide the money”

Anonymous, Builder, Hull

“People will always wants food…I’d say our takings went up 20-30% over nine months feeding the builders”

Female, Bakery manager, Hull

“It was all bonus work for us…an additional 150,000 turnover…we had to go down and do an insurance estimate on an asbestos removal, it was a phenomenal bit of business for two years afterwards”

Male, Asbestos Contractor, Hull

“He lost I would say 90% of his stock…but he made some money out of it as he sold it all off…yet claimed for it all on his insurance”

Male, Cleaning Company Owner, Sheffield

SME Perception of ResilienceTo what extent do you believe that you are adequately prepared to cope with the occurrence of a

flood?

0

5

10

15

20

25

30

35

40

45

No Opinion Not Prepared Slightly Prepared Moderately Prepared Extremely Prepared

Response

Per

cent

age

Combination

Hull

Sheffield

Increasing Effectiveness and Cost

Don’t know what to do to protect

themselves

Moderate cost internal

measures

None costly internal

measures

Physical alterations to

areas separate from business

(not owned)

Do nothing/ Cross that bridge

Low cost internal measures

Physical alternations to

external premises Social resilience

Non-return valves, sandbags

Brick walls, flood walls, move

premises, pond, sumps

Environment Agency,

Local Council, DEFRA

Pay to have debris removed

from rivers

Insurance, tanked cellars, cash in

the bank

Putting things high up, flood

warnings

Reactive

Cost Nothing

Low Cost

Moderate Cost

High Cost

The SME Flood Resilience Spectrum

The Variability of Vulnerability and Resilience

• SOCIAL: • Experience, perceptions, gender, age, ethnicity, education,

mobility, experience, position within company, knowledge, workers, loyalty

 • ECONOMIC:

• Turnover, accessing finance/banks, economic climate • OPERATIONAL:

• Supplier customer experience, industrial sector, number of employees, business processes, customer base, supply chain, age of business, available resources

• POLITICAL: • Changes in government regulations, external funding, laws,

presence of social flood defence measures 

• PHYSICAL: • Flood: frequency, duration, magnitude, extent, type (pluvial,

fluvial, groundwater, etc), time of day; Premises: topography, material, age, structure, size, drainage system

• GEOGRAPHICAL:• City (Hull or Sheffield), proximity to water source, topography,

type of land

Conclusions• SMEs are important to the economic and social vitality of the cities

of Hull and Sheffield due to their large number and the large amount of employment opportunities they provide.

• The risk of flooding in Yorkshire is set to increase dramatically over the next few decades due to the effects of climate change

• The floods that occur today are arguably different to those that occurred 60 years ago in terms of causes, physicality, social vulnerability and awareness

• SMEs vulnerable to the risk of flooding and experience a number of impacts

• Floods can be used as an opportunity

• A spectrum of resilience

• Vulnerability and resilience influenced by a number of interrelated variables such as geography and economics

• Vital that SMEs are aware of the nature of hazards that can impact their business in order to improve their resilience and reduce their vulnerability

Thank You Very Much For Listening

Are There Any Questions?