Defining an Industry: What is the Size and Scope of the Australian Building and Construction Industry

The analysis and understanding of the conduct and performance of an industry beginswith a study of its structure. However, before analysing an industry's structure it isnecessary to define the industry and identify its size, scope and scale to establish itstrue economic contribution. This paper discusses the size and scope of the Australianbuilding and construction industry, firstly, from a traditional industry economics approachby firm size and business characteristics using data from three construction industrysurveys done over 15 years by the ABS. Secondly, data from an industry 'cluster'perspective is shown. The objective of the paper is to compare the differences found inindustry size and scope in the structure-conduct-performance approach and thealternative industry cluster approach. Each model reveals different characteristics of theindustry. The conclusion finds that the building and construction industry is a casewhere the traditional structure-conduct-performance model cannot be easily applied.5

Project procurement as a market

When building and construction markets are analysed it is often at the project level, with markets defined by sector or structure type, procurement method or contract, size, complexity or other characteristic. Projects within a defined market are then grouped together to establish its importance, detached housing for example, or high-rise commercial. A distinction can be made, however, between a market made up of similar types of projects and the market for a single project. Such a market is created by a client as they go through the procurement process. This paper introduces the idea that procurement of a project creates a identifiable, though temporary, market for goods and services, and that such a market has distinctive characteristics that make it both interesting, as a source of testable hypotheses and further research, and important in developing our understanding of the industry and its dynamics. The research the paper reports on shows that the idea of project procurement as a mechanism for creating a market can utilise the elements of industry structure and competitive analysis that have traditionally been applied at the firm level. The paper concludes that this allows a new perspective on issues such as collusion, ruinous competition and cost uncertainty associated with the typical single price, sealed bid auction used for procurement in the building and construction industry

Trends in buildings and procurement: Implications for construction economists in the twenty-first century

This article discusses trends that are reshaping traditional procurement and delivery systems used by clients of the building construction industry. Procurement appears to have significant potential for innovation and improvement, particularly its potential for reorganisation to deliver better value for clients by making it both more open to design innovation and by encouraging best practice. Procurement is here broadly defined as the process that deals with project definition and delivery and the technical capabilities of the industry. A survey of online databases on current journal articles and reporting on procurement identified trends and issues. The argument is made that a changing business environment will lead to fundamental changes in the roles of building project participants in general, and construction economists in particular

A theory of construction management?

The links between theory and construction management (CM), and for that matter construction economics (CE), are not strong (see de Valence 2011). This may be one of the reasons why they have not gained complete acceptance as academic disciplines and are not seen as distinct branches of economics and management respectively. Another reason may be that products and production (the focus of management and economic theories respectively) are not the same as projects and project management in general, and construction projects and CM in particular

Defining an Industry: What is the Size and Scope of the Australian Building and Construction Industry

This is a reprint from Vol 1, no 1, which has not previously been available in electronic format.The analysis and understanding of the conduct and performance of an industry begins with a study of its structure. However, before analysing an industry's structure it is necessary to define the industry and identify its size, scope and scale to establish its true economic contribution. This paper discusses the size and scope of the Australian building and construction industry, firstly froma traditional industry economics approach by firm size and business characteristics using data fron three construction industry surveys done over 15 years by the ABS. Secondly, data from an industry 'cluster' perspective is shown. The objective of the paper is to compare the differences found in industry size and scope in the structure-conduct-performance approach and the alternative industry cluster approach. Each model reveals different characteristics of the industry. The conclusion finds that the building and construction industry is a case where the traditional structure-conduct-performance model cannot be easily applied.&nbsp

Innovation, Procurement and Construction Industry Development

The implications for analysis of innovation in construction of theoretical developments in industrial organisation are considered in this research, as an attempt to outline a new approach to construction innovation incorporating the ideas found in knowledge based, technology centred models. The paper firstly summarises characteristics of the construction industry, focusing on their effects on innovation, before surveying some of the ideas about the sources of innovation and the expansion and application of knowledge. Construction can be seen as an industry with limited scope for knowledge externalities, where the procurement methods used by the industrys clients do not pay for innovation. The following discussion uses recent developments in the research on the economics of innovation and industrial organization theory, such as research intensity and the endogenous sunk costs in competitive, fragmented, low research intensity industries. The effects on R&D of procurement methods and on industry structure are discussed, with a focus on the appropriability of innovations and the role of the client on the Heathrow Terminal 5 project. The paper concludes that the procurement methods used for building and construction projects appears to be a determining factor in the level of innovation in the construction industr

The Lords of Strategy: The Secret History of the new Corporate World

Walter Kiechel III, Boston, Harvard Business Press, 2010, ISBN 13: 978-1-59139-782-3 (hardcover), 347 pages, USD 26.95, AUD 53.95, GBP 18.99