Measuring Construction Competitiveness in Selected Countries
Start Date: Dec 2003
End Date: Dec 2005
Project Status: Complete
A Project Summary and Final Report for this project are available in the publications section please use the menu on the left to navigate.
Introducing competitiveness
Competitiveness is a concept that economists, industrialists, politicians, journalists and academics frequently refer to, debate and worry about. Countries see their competitiveness position and its trend as a reliable measure of success or failure of their policies, and take corrective actions to improve their position. The World Economic Forum (WEF) and the International Institute of Management Development (IMD) provide an evaluation of competitiveness at the national level. Rankings of corporations in business magazines can be considered an example of evaluation at the corporate level. Through studies like these, the knowledge of the role of competitiveness at the national and firm level has improved significantly, but its role at the industrial level is often overlooked. This is particularly true for the construction industry. The success of a nation partly depends on the synergistic efforts of its constituent industries. Given that the construction industry usually counts for 5-10% of a nation’s GDP, it is vital for nations to increase their knowledge and understanding for competitiveness in the construction industry.
Defining competitiveness
There is no consensus on what is meant by competitiveness or how it is best measured. This is mainly due to the fact that studies have been carried out with the different levels of analysis and ideological differences. However, for nations as well as for firms, competitiveness refers to an objective - a high, rising standard of living for its citizens and high, rising returns on investment to its owners respectively.
So what is then the objective for the construction industry? At this point it is important to stress that the construction industry has several key stakeholders and while one measure of competitiveness may appear quite satisfactory from the perspective of one stakeholder, it may fail to recognize viewpoints of others. Consequently, the definition for an industry needs to balance the needs and expectations from all relevant stakeholders. The key stakeholders of the construction industry are identified as investors, employees, clients and society.
Measuring and explaining competitiveness
Ideally, the measure of competitiveness should fully capture the definition. However, given the multi-perspective approach for this project, there is no single measure that covers all aspects of the concept. Instead, a set of measures of competitiveness will be used, covering financial and production performance as well as client and employee satisfaction. For each of the investigated countries, the scores on each of these performance measures will be presented and benchmarked against the scores of the other countries. In an attempt to explain these scores, the factors that have impact on competitiveness will be organised into a Construction Competitiveness Cube (CCC). Thus, the CCC is an attempt to explain the scores on the performance measures - competitiveness - for the construction industry.
The study
Through focus groups, interviews and an extensive literature review, the research team has collected a large number of factors of competitiveness. To acknowledge the potential differences in importance between factors, experts in each of the engaged countries will be asked to provide relative weightings. The study covers the whole value chain (material suppliers, designers, engineering consultants and contractors) and both SME:s and larger firms. Furthermore, the role of government and clients are devoted special attention. The countries to be investigated, measured and benchmarked through the study are: Australia, Finland, Sweden, the UK and the USA. Further internati