PHASE 2 - COMPETITIVENESS, TECHNOLOGY AND CONTRACTING

Although representatives of the construction industry are well-known for exerting influence through lobbying on the public decision level in order to generally encourage construction activity and large projects, it is also characteristic that individual firms traditionally are displaying a wait-and-see policy in relation to the technological considerations of a client. Subsequently the idea of improving firms’ competitiveness through strategically based investments in new technology is only rarely performed full scale in construction. During the last decade, however, technology has indeed been put on the agenda as a central object of action in firms and industries. One of the most important exponents of this development is the industrial economist Michael E. Porter who elaborated the concept of competitiveness precisely in the relationship between technological change and market conditions. He considers the ability of adapting to new technology to be a significant parameter of success in the mutual competition of firms and industries. But Porter also emphasises the importance of analysing thoroughly the properties of a technology in relation to its market context. Technology in itself, uncritically implemented, very often implies economical disasters (Porter 1985). As a means of surveying the firm’s competitive situation Porter introduced a methodology which has become quite widespread in industrial planning. In a five forces analysis a firm can gain insight into the industry structure of which it is part and thereby learn about the conditions that rules competition in a specific market. This knowledge then should determine the technology strategy of the firm. In order to illustrate the system of sources leading to competitive advantage in the firm, Porter furthermore introduced the concept of a value chain - a structuring of the different categories of activities which should be organised and managed specifically with regards to the nature of the different industries. Technology development is one such category which, appropriately handled contributes to the production of value in the firm (Porter 1985, p 260). The five forces are briefly examined in the following and related to the technology oriented strategic considerations of the contractors in the contract phase.