The implications of the construction industry to national wealth
Emerald Publishing Ltd
School of Business and Law
The purpose of this paper is to explore how construction projects should be conceived and how the productivity of the construction industry impacts upon a nation’s wealth.
The approach has been to marshal the extant literature about the construction industry, construction industry productivity and the economic value of the built environment. Whilst there are many lenses that are used to understand the industry, different ways to measure productivity performance and differing practices between nations, it has been determined that construction industry productivity improvement significantly lags behind other industries.
There is a strong argument that construction productivity improvement correlates to advances in a nation’s economy. Nonetheless, it is the decisions about the nature of infrastructure, the standardisation of infrastructure and the effect upon labour productivity that will have the greatest implications for a nation’s economic future. These economic improvements will be inhibited by legacy infrastructure, particularly in densely populated areas. If substantial innovation occurs, the nations currently holding the highest stock of infrastructure might be economically constrained.
The construction industry is highly fragmented and has the uncertainties of a cyclic industry. It is, therefore, necessary for governments to identify standards and facilitate innovation. The implications for short- and long-term economic performance require that the industry is a fundamental at the highest level of government.
Scholars can use the propositions to further analyse construction productivity improvement and the provision of different types of infrastructure with regard to a nation’s economic performance. Hypotheses are offered to support future research.