Digital Technology as a Resilience-Enhancing Tool for SMEs in Earthquake-Prone Developing Countries

Abstract

The objective of this study is to investigate the role of digital technologies in enhancing the resilience of small- and medium-sized enterprises (SMEs), particularly in developing countries, amidst natural disasters. Frequent earthquakes in Aceh, Indonesia, not only pose a medical emergency but also disrupt businesses, demanding adaptability and resilience. SMEs, constrained by limited resources, face heightened vulnerability. Drawing from a survey of 30 SME owners in Indonesia, this research reveals the pivotal role played by digital technology in enabling SMEs to withstand disasters, strengthen their operations, and ensure their continuity. The study uses a mixed-methods approach, which combines qualitative and quantitative research methods. This approach allows for a comprehensive understanding of the research problem by gathering different types of data. The qualitative data from interviews are analyzed using thematic analysis. This involves identifying recurring themes and patterns related to digital technology adoption and SME resilience.The findings of the study address a significant gap in existing literature, shedding light on the specific challenges faced by SMEs in developing countries and their strategies for digital transformation. From this preliminary study, two practical recommendations emerge. Firstly, SMEs are encouraged to invest in the adoption and integration of digital technology across various facets of their operations. This entails leveraging digital communication channels, harnessing cloud computing and ecommerce platforms, utilizing data analytics for informed decision-making, and exploring automation where applicable. These digital tools empower SMEs to enhance operational efficiency, elevate customer engagement, and adapt to evolving market dynamics. Secondly, the responsibility lies with tech developers and policymakers to support SMEs on their digital transformation journey. Tech developers can make significant contributions by designing user-friendly and cost-effective digital solutions tailored to the unique needs of SMEs in developing countries. Policymakers can foster an enabling environment by enacting supportive policies, providing essential financial incentives, and advocating partnerships between SMEs and technology providers. These concerted efforts pave the way for SMEs to thrive amidst challenges and contribute to heir sustained growth and prosperity.