Civil Engineering Reference
In-Depth Information
FACTORS INFLUENCING PRODUCTIVITY
There are a number of factors influencing the productivity of an economy or sector
of the economy:
•
the quantity and quality of natural and man-made resources
•
the quality and extent of the education and training of the labour force
•
the levels of expectation, motivation and wellbeing
•
the commitment to research and development.
The third and final assumption that is made when we draw the production
possibility curve is that efficient use is being made of all available resources. In other
words, society cannot for the moment be more productive with the present quantity
and quality of its resources. (The concept of efficiency is examined more closely in
Chapters 2
, 5,
6,
7
and
8.)
According to several government reports (Egan 1998; NAO 2001, 2005 and
2007; Cabinet Office 2011), given the existing level of resources in construction
it should be possible to increase productivity by at least 10 per cent. In other
words, a production possibility curve representing all construction activities could
be pushed out to the right, as shown in
Figure 1.2
(see page 6). Several common
sets of problem are identified as the root cause of this inefficiency. First, the
industry demonstrates a poor safety record and an inability to recruit good staff.
Second, there appears to be no real culture of learning from previous projects,
and no organised career structure to develop supervisory and management grades.
Third, concern is expressed about the poor level of investment into research
and development that restricts the industry's ability to innovate and learn from
best practice. The fourth, and possibly most worrying, problem is the fact that
technology (in the sense of IT, innovation, prefabrication and off-site assembly) is
not used widely enough across the construction sector.
Another plausible scenario suggested by the production possibility curve
approach is that the construction industry may at present be working within the
boundary of its production curve (say, point A in
Figure 1.2)
. In which case, an
increase in output could be simply achieved by greater efficiency. Supply constraints
need to be reduced, the problems identified by the government reports resolved,
and the factors generally acknowledged to increase productivity (listed above) must
be addressed to achieve the full potential of the industry. Both these scenarios are
shown in
Figure 1.2
and they support the idea that the level of productivity in the
construction industry needs to improve.
In very general terms, therefore, the study of economics (and construction
economics) is concerned with making efficient use of limited resources to maximise
output and satisfy the greatest possible number of wants. In short, the basis of the
subject rotates around the concepts of choice, scarcity and opportunity cost.
