Defining an Industry: What is the size and scope of the Australian Building and Construction Industry? By Gerard de Valence
DEFINING AN INDUSTRY: WHAT IS THE SIZE AND SCOPE OF THE AUSTRALIAN BUILDING AND CONSTRUCTION INDUSTRY?
Gerard de Valence Construction Economics, Faculty of Design, Architecture and Building, University of Technology, Sydney, Australia
Introduction The traditional structure-conductperformance approach to industry economics originated in the US in the 1930s with the work of Mason (1939) and Bain (1959). This is now the standard framework for analysing the dynamics of an industry. However, the size and scope of the Australian construction industry at the turn of the millennium may be better understood using an
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These 'assemblers' are in the process from moving from being 'demand-driven' in the sense of dependency on 'hard money' projects and traditional clients, to being demand-inducing, as they actively create opportunities through equity stakes and new forms of project delivery and finance. It should be said that the analogy with car manufacturers is controversial, and at variance to those with traditional views like Raftery (1991: 39-42) and Hillebrandt (1984). The Australian Government's construction industry policy document Building for Growth Analysis had the comment "The industry is in the first stage of a global industrial formation that, by 2010 will see it dominated by perhaps 10 large firms" (ISR 1999: 45). For a global consolidation on the scale suggested to take place the structure of the industry would have to undergo one of the most dramatic examples of concentration ever. However, the evidence from similar industries with low R&D intensity does not support that outcome (de Valence, 2001). Clearly, the future structure of the building and construction industry is becoming a point of debate among researchers and analysts. However, before analysing an industry's structure it is necessary to define the industry and identify its size, scope and scale. This establishes the true economic