Coping with structural change in construction: experiences gained from advanced economies

Abstract

As an economy approaches maturity, the relative importance of the construction sector would gradually decline. Without effective policies and strategies, the construction industry will suffer irreversably and this may trigger a knock‐on effect to the overall economy. The experiences of selected advanced economies are examined, including Australia, Japan, Singapore, South Korea and the UK in coping with structural changes in construction. Strategies employed by the government and the construction industry of these advanced economies to reinvent the construction industry were captured through an extensive literature review and a series of interviews with indigenous industry practitioners. In order to revitalize the construction industry, governments would accelerate publicly funded projects; provide financial support to ease the burden of industry stakeholders; and stimulate the market demand. In contrast, the industry would explore various market alternatives while companies would sharpen their competitive advantage locally and internationally through merger and acquisition. The identified strategies are corresponded to a construction industry development framework, which could therefore serve as a valuable reference for policy makers and practitioners to rejuvenate construction demand when a country approaches an urban service economy.

Keywords:

• Construction industry
• advanced economies
• recession
• recovery
• strategy.

Acknowledgements

The authors would like to acknowledge the financial support from the Constuction Industry Institute, Hong Kong; Research Grants Council through the General Research Fund (grant no: 7152/07E); The University of Hong Kong via the CRCG Seed Funding for Basic Research (grant no: 10207434) and Special Funding for Outstanding Young Researcher Award 2004; as well as the Hong Kong Polytechnic University (grant no: H‐ZK58).