New Perspectives on Construction in Developing Countries

George Ofori

• Publisher: Routledge
• Year: 2012
• eBook ISBN: 9781136940620
• Edition: 1
• Topic: Technology & Engineering
• Subtopic: Construction & Architectural Engineering
• Index: Technology & Engineering

Developing countries face the challenge of maintaining economic growth and socio-economic development, at the core of which sits the construction industry. Considerable research on construction in developing countries took place in the 1970's and 1980's, but little since, a gap which this book fills.

Including contributions from prominent academics and practitioners in Australia, China, the Netherlands, Portugal, Singapore, South Africa, Switzerland, and the UK, this is a truly international analysis of a subject of global interest. The most insightful and relevant of recent research on topics such as Millennium Development Goals, the informal construction sector, human resource development, technology, finance and social change, are all addressed in the context of the construction industry in the developing world. Also considered are other key aspects of construction industry development such as institution building, nurturing of contractors and consultants and championing of industry development programmes.

While the challenge has grown and the needs have become even more pressing, the research to date has rarely presented effective solutions. Focussing on those aspects of the construction industry most crucial to development, this is a much needed up-to-date study that sheds new light on a variety of concepts and issues.

This is essential reading for researchers, professionals and students interested in the construction industry in developing countries. Readers of this book will be interested in its companion volume; Contemporary Issues of Construction in Developing Countries.

1 The construction industries in
developing countries

Strategic review of the book

George Ofori

Introduction: a paradox

The construction industry plays an important role in economic growth and in long-term national socio-economic development. This is only one of the reasons why it is necessary to study, and gain a good understanding of, the construction industries of developing countries. Two other closely inter-related reasons may be outlined. First, governments tend to use their investments in construction to introduce changes in the national economies (Hillebrandt, 2000). This was evident in many of the ‘stimulus packages’ which were launched in a number of industrialised countries to address the global economic and financial crisis in 2008–2009. Thus, it is important for these policy decisions to be informed by sound knowledge of (i) the nature of the industry, and the circumstances in which the proposed solutions would work; (ii) the type of projects where the desired change is most likely to be achieved; and (iii) the action that needs to be taken by the construction industry itself to enable it to play the role assigned to it. The last point is in stark contrast to the reality, where there is a lack of knowledge on the construction industry owing to lack of interest of governments and other stakeholders. For example, in most countries, the industry has a poor image and low priority is given to issues concerning it.

The second reason why studies on the construction industries in developing countries must be undertaken is that it is vital for construction to perform well the tasks that are assigned to it. This is because constructed items are important inputs into other productive activities, and hence time is of the essence with regard to the execution of projects. From the cost perspective, effective and efficient construction will save money and provide value for the clients and for society. With respect to quality and durability, constructed items form a significant part of any nation's savings. From the social angle, constructed items improve the quality of life of the people in any society. In particular, in the developing countries, they provide the basic needs of housing, water, health and education. It is appropriate here to relate construction activity to the attainment of the Millennium Development Goals (MDGs). Perhaps without directly knowing it, the world's leaders expect construction to help improve the standard and quality of life of their people.

There was much research on the construction industries in developing countries in the late 1970s and throughout the 1980s. These works resulted in a large volume of literature on key aspects of the industries. The aspects covered included (i) the role of the construction industry in economic development; (ii) features of the construction industries including their needs and problems; (iii) the factors which influence their performance; and (iv) particular parts of the industries such as contractor development, materials development, technology development and institution building. The authors of the works offered many recommendations for developing the construction industries and enhancing their performance and prospects. There is much evidence of the researchers at that time being aware of the earlier work, and building on their findings and conclusions.

If the research work outlined in the previous paragraph had continued, there would have been much greater understanding of the nature of the construction industry and its needs, problems, challenges and prospects in the context of socio-economic development. What is the position now? This issue will be taken up again at the end of this chapter.

Brief historical review of research on construction industry development

Duccio Turin and his colleagues in the University College Environmental Research Group (UCERG) and Built Environment Research Unit (BERU) at University College London undertook studies on the relationship between construction activity and economic growth and development. Turin's (1973) was arguably the most significant of these works. This was followed by works on particular countries by the team, including Andrews and colleagues (1972). Several of the studies were undertaken upon commissioning by clients such as the World Bank. An international team of experts undertook a comprehensive study of the construction industry in Tanzania and produced The Local Construction Industry Report (Ministry of Works Tanzania, 1977), one of the finest works on the industry in a developing country for several decades. It is pertinent to note that many of the points made in that report are still relevant today. For example, it considered ‘productivity development’ to be at the heart of the industry's performance, including cost levels. It concluded that poor productivity in Tanzania's construction industry was due to lack of materials, equipment and spare parts; lack of skilled manpower, especially supervisors; lack of working capital; lack of incentives for the workers; and little genuine interest among managers and professionals in improving project planning, site management and cost control (p. 13). The authors of the report recommended that a separate agency be established to improve co-ordination and communication in the construction sector. This was a new thing. The National Construction Council of Tanzania was formed soon after this, and was the first of the construction industry development agencies to be established.

Under the Construction Management Programme of the International Labour Office (ILO), which covered some 20 countries in Africa, a number of country reports, and those on particular aspects of construction such as project management and procurement, were produced. From these reports, some useful books were published. First, Foundations for Change (Edmonds and Miles, 1984) was a compilation of chapters on various relevant subjects, including country studies on Ghana and Sri Lanka. Second, again, arguably the most comprehensive work on construction contractor development was published by the ILO (Relf, 1986). This book was informed by field work by consultants commissioned by the ILO in a number of developing countries. It was followed by the ‘Improve Your Business’ programme for developing small and medium-sized enterprises, which the ILO implemented in many countries until well into the 1990s (see, for example, Miles and Ward, 1991). Third, Miles and Neale (1991) considered case studies of four construction industry development institutions in the developing countries, and proposed a ‘12-point action plan’ for such agencies: (i) general industry promotion; (ii) influencing policy and investment decisions; (iii) undertaking research; (iv) development of local construction capability; (v) improving the regulatory framework; (vi) training and management development; (vii) promoting construction management as a discipline; (viii) promoting computer-based management information systems; (ix) consultancy and advisory services; (x) internal training and staff development; (xi) creating natural linkages; and (xii) creating international linkages.

The World Bank (1984) produced another seminal work. Its title was simple: The Construction Industry: Issues and Strategies in Developing Countries. One of the main features of this slim but useful volume is an outline, in the appendix, of possible terms of reference for a study on a construction industry in a developing country, entitled ‘Framework Terms of Reference for Studies of the Construction Industry in Developing Countries’. This is still relevant today, and Ofori (2007) laments that it is not being used by researchers and consultants on the construction industry. Another publication of the World Bank which merits greater recognition and attention is that by Kirmani and Baum (1992) on the consulting professions in the developing countries.

The then United Nations Centre for Human Settlements (UNCHS) sponsored several studies on the construction industries in developing countries. These include (i) works on the role of the industry in human settlements in general (UNCHS, 1981a,b); (ii) a study of technology development (UNCHS, 1991) which included one of the pioneering studies on the impact of the construction industry on the physical environment; and (iii) a study of contractor development (UNCHS, 1996). In May 1993, the UNCHS and the United Nations Industrial Development Organization (UNIDO) held their first consultation on the industry in development in Tunisia. The issues addressed included the following ‘constraints’ (UNIDO, 1993): (i) big volume of need together with poorly organised construction industry unable to meet the increasing demand; (ii) fluctuations in demand and levels of activity, which have adverse impact on the building up of capacity and experience in the industry, with as a result a high level of risk exacerbated by lack of data and information for proper analyses; (iii) limited technology development and innovation, and lack of utilisation of computer technology; (iv) skills development, which also hampers the local construction firms in competition with foreign ones; (v) reliance on foreign firms and imported plant and equipment; (vi) lack of access to finance; and (vii) poor performance on projects characterised by high costs, delays and poor productivity. These are issues that are still of concern to the developing countries today.

Books on the construction industries in the developing countries which have been published include those of Wells (1986) and Ofori (1993a). Other books which have considered particular aspects of construction include Abbott (1985) on technology transfer and Werna (1996) on small contractor development. The subject of construction in developing countries has been covered in sections, or in passing, in some of the good books on construction economics such as that by Hillebrandt (2000).

In the early 1990s, Ofori (1993b, 1994) presented a review of research on construction industry development as well as a review of practice in construction industry development. He noted that there had been a decline in the volume and pace of work on the construction industries in developing countries. In another paper, Ofori (2007) observed that work on the area had ground to a virtual halt. He gave the following reasons for this phenomenon: (i) funding from donor agencies no longer flowed to such studies; (ii) many of the good publications (such as Turin, 1973) were rather old, and no longer available or accessible; and (iii) as a result of point (ii), the field of construction in developing countries has lacked a suitable foundation on which to build and many of the works do not have much to say that is new or profound.

Recent developments

There has not been much work on the construction industries in developing countries in the past one and a half decades. At the same time, the problems confronting the industries have grown, and the need for action to address them has become even more pressing. In the absence of recent authoritative literature, the work which is currently undertaken (for example, in graduate research studies, or consultancy assignments for governments and international organisations) is often at a basic level, repeating what was done some decades ago, and reaching conclusions which have already been established. Moreover, these works tend to offer recommendations which are not new, and some of which had failed to work when they had been tried earlier. There is much evidence of the researchers of the 1970s and 1980s being aware of the earlier work, and using their findings and conclusions as points of departure.

Not only are some of the earlier findings being ignored, but some of the significant ones are also being misassigned. This includes Turin's (1973) establishment of the relationship between construction and an economy as it grows. However, there are some bright spots on the landscape, and some encouraging signs are emerging. Two of these positive developments are now discussed.

First, some of the construction industry development agencies, such as the one in South Africa, have undertaken, or sponsored, some signifi-cant studies which have yielded a great volume of materials which help to engender understanding of the contemporary times. The work done by the Construction Industry Development Board (cidb) in South Africa on procurement and project delivery (including a toolkit), registration of contractors, contractor development, tracking of industry performance (including status reports and monitoring reports, which include periodic surveys of the state of the industry) and best practices schemes is a useful addition to the body of knowledge. (cidb publications are available at: http://www.cidb.org.za/.)

Second, several countries have realised that it is important to have policy documents on their construction industries. Again, South Africa offers lessons. The government produced a ‘green paper’ which set out proposals and a programme for radically restructuring and developing the industry. This was followed by a statute which provided for particular actions in the development of the construction industry, and also for the establishment of a championing agency, the cidb, in that country. Tanzania's national construction industry policy, adopted in 2003, has the following goal:

To develop an internationally competitive industry that will be able to undertake most of the construction projects in Tanzania and export its services and products and ensure value for money to industry clients as well as environmental responsibility in the implementation of construction projects.

(Ministry of Works, 2005, p. 1)

In other words, Tanzania wants to have one of the best construction industries in the world. The objectives of the national construction industry policy of Rwanda are to (i) harmonise roles of the public and private sectors; (ii) develop and strengthen local capacity for effective participation; (iii) strengthen and support the professional bodies; (iv) promote use of appropriate technology; (v) promote the participation of women in the national construction industry; and (vi) ensure that the national construction industry supports sustainable economic and social development (Ministry of Infrastructure, 2009).

This book

This book seeks to fill the gap between the early works on the construction industries in the developing countries and their improvement. It is part of a two-book set; the other book is entitled Contemporary Issues in Construction in Developing Countries. It also comprises chapters by prominent researchers on the various topics. It covers the implications for developing countries of issues which are often discussed without much reference to these countries.

Each of the chapters in this book covers an important aspect of the construction industries in the developing countries in the present era. After beginning with a consideration of macro-level issues of the industries, the rest of the book is devoted to a discussion of topics which are the key components of construction industry development as is widely agreed upon by authors. The broad subjects include (i) the role of the construction industry in economic development; (ii) contractor development; (iii) issues relating to finance; (iv) institution building; (v) human resource development; and (v) technology development.

The authors agreed to produce their chapters in accordance with a set of guidelines. These included the provision that each chapter would contain (i) a review of the literature; (ii) a discussion of current issues with relevant examples from several countries and inter-country comparisons; (iii) proposals for developmental action; and (iv) future directions for research and practice. The authors were urged to bear in mind that the developing countries are not a homogeneous group. They were also requested to include, in their conclusions and recommendations, policy implications of their findings and conclusions for the governments of the developing countries in relation to developing the construction industries, and enhancing their performance and prospects.

Strategic overview of the book

An attempt is now made to introduce the contents of the book by not only providing a summary of each chapter, but also relating the chapters to the key developments on the particular subject.

Construction and economic development

The first part of the book comprises three chapters on the broad subject of construction and economic ...

Table of contents

• Front Cover
• New Perspectives on Construction in Developing Countries
• About CIB and about the series
• Title Page
• Copyright
• Contents
• List of figures
• List of tables
• List of boxes
• Contributors
• Abbreviations
• 1 The construction industries in developing countries
• Part I Construction and economic developmen
• Part II Construction industry development: macro-level issues
• Part III Construction development issues: key areas
• Author index
• Subject index