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only c lag Ior omorr~:
Cloha1 E~erpr~e and the
D.S. ConstructionIndustry
Co~lttee on the IDternatlona1 Construction Industry
Bulldlug Research Board
Co~slon on Englneerlug Ed ~cbulca1 Systems
National Research Council
NATIONAL ACADEMY PRESS
~sblngtoD, D.C. lg88
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National Academy Press 2101 Constitution Avenue, NW Washington, DC 20418
NOTICE: The project that is the subject of this report was approved by the Governing
Board of the National Research Council, whose members are drawn from the councils
of the National Academy of Sciences, the National Academy of Engineering, and the
Institute of Medicine. The members of the committee responsible for the report were
chosen for their special competences and with regard for appropriate balance.
This report has been reviewed by a group other than the authors according to
procedures approved by a Report Review Committee consisting of members of the
National Academy of Sciences, the National Academy of Engineering, and the Institute
of Medicine.
The National Academy of Sciences is a private, nonprofit, self- perpetuating society
of distinguished scholars engaged in scientific and engineering research, dedicated to the
furtherance of science and technology and to their use for the general welfare. Upon
the authority of the charter granted to it by the Congress in 1863, the Academy has
a mandate that requires it to advise the federal government on scientific and technical
matters. Dr. Frank Press is president of the National Academy of Sciences.
The National Academy of Engineering was established in 1964, under the charter
of the National Academy of Sciences, as a parallel organization of outstanding engineers.
It is autonomous in its administration and in the selection of its members, sharing with
the National Academy of Sciences the responsibility for advising the federal government.
The National Academy of Engineering also sponsors engineering programs aimed at
meeting national needs, encourages education and research, and recognizes the superior
achievements of engineers. Dr. Robert M. White is president of the National Academy
of Engineering.
The Institute of Medicine was established in 1970 by the National Academy of
Sciences to secure the services of eminent members of appropriate professions in the
examination of policy matters pertaining to the health of the public. The Institute acts
under the responsibility given to the National Academy of Sciences by its congressional
charter to be an adviser to the federal government and upon its own initiative, to identify
issues of medical care, research, and education. Dr. Samuel O. Thier is president of the
Institute of Medicine.
The National Research Council was established by the National Academy of Sciences
in 1916 to associate the broad community of science and technology with the Academy's
purposes of furthering knowledge and of advising the federal government. Functioning in
accordance with general policies determined by the Academy, the Council has become the
principal operating agency of both the National Academy of Sciences and the National
Academy of Engineering in providing services to the government, the public, and the
scientific and engineering communities. The Council is administered jointly by both
Academies and the Institute of Medicine. Dr. Frank Press and Dr. Robert hi. White are
chairman and vice-chairman, respectively, of the National Research Council.
This report was supported by the Technology Agenda Program of the National
Academy of Engineering and funded under the following agreements between the indi-
cated federal agency and the National Academy of Sciences: U.S. Trade and Develop-
ment Program, International Development Cooperation Agency Grant Agreement TDP
7712561; National Science Foundation Grants No. MSM-8612738 and MSM-8612783
under Master Agreement No. 8618641; Department of the Interior Bureau of Recla-
mation Grant Agreements No. 6-FG-81-10310 and 7-FG-81-11950, U.S. Department of
Agriculture Forest Service Grant No. 87-G-050.
LIBRARY OF CONGRESS CATALOG CARD NUMBER 88-61728
INTERNATIONAL STANDARD BOOK NUMBER 0-309-03937-1
Coucr illmtratior~ by Tom Adams.
Printed in the United States of America
First Printing, July 1988
Second Printing, October 1988
Third Printing, May 1989
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BUILDING RESEARCH BOARD
(1987-1988)
RICHARD T. BAUM, Consultant, Jaros, Baum and Bolles, New
York, New York (retired), Chairman
L. GERALD CARLISLE, Secretary-Treasurer, International Union
of Bricklayers and Allied Craftsmen, Washington, D.C.
ROSS B. COROTIS, Chairman, Department of Civil Engineering,
Johns Hopkins University, Baltimore, Maryland
RAY F. DeBRUHL, Senior Vice-President, Davidson and Jones
Corporation, Raleigh, North Carolina
C. CHRISTOPHER DEGENHARDT, President, EDAW, Inc., San
Francisco, California
DAVID R. DIBNER, Senior Vice-President, Bernard Johnson, Inc.,
Bethesda, Maryland
ROBERT C. DOBAN, Senior Vice-President for Science and
Technology, Owens-Corning Fiberglas Corporation, Toledo
Ohio
EZRA D. EHRENKRANTZ, President, The Ehrenkrantz Group
and Eckstut, New York, New York
ELISHA C. FREEDMAN, Consultant, Associated Public Sector
Consultants and University of Connecticut, West Hartford
DENOS C. GAZIS, Assistant Director, Semiconductor Science and
Technology, IBM Research Center, Yorktown Heights, New
York
GEORGE S. JENKINS, President, Consultation Networks,
Washington, D.C.
RICHARD H. JUDY, Director, Dade County Aviation Department,
Miami, Florida
FREDERICK KRIMGOLD, Associate Dean for Research and
Extension, Virginia Polytechnic Institute and State University,
Alexandria
MILTON PIKARSKY, Distinguished Professor and Director,
Institute of Transportation Systems, The City College of New
York
KENNETH F. REINSCHMIDT, Vice-President, Stone and
Webster Engineering Corporation, Boston, Massachusetts
RICHARD I`. TUCKER, Director, Construction Industry Institute,
University of Texas, Austin
· ·-
111
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JAMES E. WOODS, Senior Engineering Manager, Building
Controls Division, Honeywell, Inc., Golden Valley, Minnesota
APRIL L. YOUNG, Vice-President, NVR Development, McLean,
Virginia
Staff
ANDREW C. LEMER, Director
JOHN P. EBERHARD, Former Director
PETER H. SMEALLlE, Senior Program Officer
GRETCHEN G. BANK, Program Associate
JULLAN K. MORRISON, Principal Consultant;
PATRICIA M. WHOLEY, Administrative Coordinator
DONNA F. ALLEN, Senior Secretary
JOANN CURRY, Senior Secretary
1V
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COMMITTEE ON THE INTERNATIONAL
CONSTRUCTION INDUSTRY
JOHN W. FISHER, Fritz Engineering Laboratory, Lehigh
University, Bethlehem, Pennsylvania, Chairman
DAVID P. BILLINGTON, School of Engineering and Applied
Science, Princeton University, New Jersey
ARTHUR J. FOX, Engineering News Record, New York, New York
DONALD G. ISELIN, Santa Barbara, California
ARNOLD K. JONES, Cary, North Carolina
MICHAEL MACCOBY, Project on Technology, Work, and
Character, Washington, D.C.
HENRY L. MICHEL, Parsons Brinckerhoff, Inc., New York, New
York
FRED MOAVENZADEH, Center for Construction Research and
Education, Department of Civil Engineering, Massachusetts
Institute of Technology, Cambridge
WILLIAM W. MOORE, Dames and Moore, San Francisco,
California
LOUIS J. MULKERN, RMD Associates, Washington, D.C.
JOHN C. RICHARDS, Government and International Affairs, M.
W. Kellogg Company, Hilton Head, South Carolina
JOHN H. WINKLER, Skidmore, Owings and Merrill, New York,
New York
Liaison Representatives
STANLEY BEAN, Forest Products and Harvesting Research,
Forest Service, U.S. Department of Agriculture, Washington,
D.C.
MARY SAUNDERS, Capital Goods and International
Construction, U.S. Department of Commerce, Washington,
D.C.
FRANK A. DIMATTEO, U.S. Army Corps of Engineers,
Washington, D.C.
CHARLES M. HESS, U.S. Army Corps of Engineers, Washington,
D.C.
CHRISTIAN R. HOLMES, International Development Corporation
Agency, Washington, D.C.
BETSY HORSMON, Tennessee Valley Authority, Washington,
D.C.
v
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THEODORE LETTES, Small Business Technology, U.S.
Department of Commerce, Washington, D.C.
RICHARD B. SELF, Executive Office of the President,
Washington, D.C.
DARRELL WEBBER, Bureau of Reclamation, U.S. Department of
the Interior, Denver, Colorado
Advisers to the Committee
FRANK BOSWORTH, Virginia Polytechnic Institute and State
University, Blacksburg
MARION C. DIETRICH, Corporation for Innovation Development,
Indianapolis, Indiana
JOHN W. FONDAHL, Stanford University, California
EDGAR J. GARBARINT, Bechte! Group, Inc., San Francisco.
California
THOMAS P. GUERIN, JR., Construction/Project Finance, BAll
Banking Corporation, New York, New York
H. PETER GUTTMANN, HPG Associates, Inc., Washington, D.C.
GEORGE S. JENKINS, Consultation Networks, Inc., Washington,
D.C.
JOHN T. JOYCE, International Union of Bricklayers and Allied
Craftsmen, Washington, D.C.
FREDERICK KRIMGOLD, Virginia Polytechnic Institute and
State University, Alexandria
NICHOLAS LUDLOW, Development Bank Associates, Inc.,
Washington, D.C.
RAY MARSHALL, LB] School of Public Affairs, University of
Texas, Austin
ALFRED T. MCNElLL, Turner Construction Company, New York,
New York
RICHARD TUCKER, Dames and Moore, Bethesda, Maryland
RICHARD I.. TUCKER, Construction Industry Institute,
University of Texas, Austin
FRANK M. WARREN, JR., Construction Management
Consultant, Charlotte, North Carolina
JOHN WISNIEWSKI, Export-Import Bank, Washington, D.C.
RICHARD N. WRIGHT, Center for Building Technology, National
Bureau of Standards, Gaithersburg, Maryland
V1
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Observers
JESSE AUSUBEL, National Academy of Engineering, Washington,
D.C.
MARLENE R. B. BEAUDIN, National Academy of Engineering,
Washington, D.C.
WILLIAM BEDDOW, Caterpillar, Inc., Washington, D.C.
LYNN S. BEEDLE, Lehigh University, Bethlehem, Pennsylvania
TERRY CHAMBERLIN, Associated General Contractors,
Washington, D.C.
MARK CHALPIN, National Constructors Association,
Washington, D.C.
ROBERT GOLD, Arlington, Virginia
WILLIAM PETERSON, Construction Industries Manufacturers
Association Washington, D.C.
CHARLES PINYAN, International Construction Week, New York,
New York
MARTIN J. THIBAULT, Bureau of Reclamation, U.S. Department
of the Interior, Washington, D.C.
·-
V11
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Foreword
The U.S. construction industry plays a crucial role in the United
States by supplying the structures that house and facilitate virtually
all other economic and social activity. This industry has a historic
role abroad as well, not only through its direct exports of U.S. goods
and services, but also through its leadership in opening opportunities
for other U.S. business and for intellectual exchange that improves
international understanding. Reports of declining work by U.S. firms
abroad and increasing penetration of foreign firms into the domestic
construction market are therefore troubling.
Although only a small fraction of the U.S. construction industry
is actively involved in the international market, this participation
yields a broad range of intangible benefits that go beyond any direct
effect on the U.S. trade balance or other econorn~c statistic. These
benefits include better knowledge of foreign firms' capabilities and
business practices, enhanced skills development through exposure to
foreign cultures and management styles, and increased understanding
of technical problems arising from construction undertaken in diverse
physical and social conditions.
The reasons given for deterioration of the U.S. construction in-
dustry's competitive position in an increasingly global marketplace
are varied and complex, but the importance of technological lead-
ership is widely recognized. These issues alone would justify an
appraisal of the competitiveness of the U.S. construction industry.
1X
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x
FOREWORD
However, in requesting the Building Research Board to under-
take this study, the National Academy of Engineering had more in
mind: Emerging technologies in several fields offer the promise of
significant advances in infrastructure and building, at a time when
there is growing recognition of the need to renew and enhance these
facilities here and abroad. The opportunities presented to U.S. in-
dustry by this convergence of capability and need are substantial.
The Academy requested this study as one element of a broader effort
to identify these opportunities and contribute to the public debate
about such issues.
The Academy wishes to thank the National Science Foundation,
U.S. Army Corps of Engineers, Bureau of Reclamation, International
Cooperation Agency, and Forest Service for joining in the financial
support of this study.
Robert M. White
President
National Academy of Engineering
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Acknowledgments
This study was conducted in two stages by committees under
the chairmanships of William Moore, of Dames and Moore, and John
Fisher, of Lehigh University. These committees and their chairmen
deserve the particular appreciation of the Building Research Board
(BRB) and the National Academy of Engineering (NAE) for their
substantial work on this study. Financial support by the U.S. Army
Corps of Engineers, Bureau of Reclamation, International Coopera-
tion Agency through its Trade and Development Program, and For-
est Service, combined with NAE's initiating funds, demonstrate the
government's broad concern about the U.S. construction industry's
international competitiveness and the importance of the committee's
work.
The committees were ably supported by John P. Eberhard, for-
mer Director of the BRB, under whose guidance the study was
conducted and who took a major part in preparation of this report.
Andrew C. Lemer, currently Director of the BRB, also participated
substantially in the report's preparation. Special thanks are due to
Joann Curry for her outstanding work on the final manuscript.
X1
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Contents
EXECUTIVE SUMMARY
-
1 INTRODUCTION oe~ee~eeeeaee~ e~eeeeeeeeee ~ee
The Scale of World Construction, 11
The Changing Market, 15
CASE STUDY I: TECHNOLOGICAL ADVANTAGE
PAYS OFF: M. W. KELLOGG AND
THE OIL AND PETROCHEMICAL INDUSTRY
2 U.S. CONSTRUCTION IN INTERNATIONAL
COMPETITION e
The U.S. Industry, 23
A Short Historic Perspective, 25
Market Structure, 27
Construction Machinery, 31
Foreign Firms in the U.S. Market, 33
CASE STUDY 2: JAPAN'S ONBAYASHI GUMI: DOING
CONSTRUCTION IN THE UNITED STATES FOR
20 YEARS..........................................................
3 COMPETITION IN THE GLOBAL MARKET..
Common Characteristics, 38
Specific Cases, 39
Great Britain, 39
· - ~
x~n
.10
.19
23
35
............ 38
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XIV
France, 41
Italy, 41
Sweden, 42
Japan, 44
India, 45
The Soviet Union, 46
U.S. Response to Competition, 47
CASE STUDY S: SHIMIZU MEETS IBM'S NEEDS
4 RESEARCH AND DEVELOPMENT IN
CONSTRUCTION ............................................
CONTENTS
............. 50
.55
U.S. Construction Research and Development, 56
Other Efforts Needed, 58
CASESTUDY4: THE BELL TELEPHONE
LABORATORIES 63
EDUCATION AND TRAINING .........................
Programs of Study, 67
Engineering, 67
Architecture, 69
Engineering and Architecture Technology, 69
Continuing Education, 70
Issues in Civil Engineering, 71
Emphasis on Design, 71
Construction Management, 72
Issues in Architecture, 73
Specialization and Small Practices, 74
Architectural Research and Education, 75
Skills for Global Enterprise, 76
Cross-Cultural Training for the Construction Industry, 76
Acquiring Foreign I`anguages, 78
International Project Management, 79
CASE STUDY 5: BUILDING INTERNATIONAL
RELA TIONSNIPS: PHILIPP NOLZMANN A G AND
J. A. JONES CONSTR UCTION COMPANY ~
6 PURSUIT OF INNOVATION........................
Nature of Innovation, 85
Opportunity in Infrastructure, 88
Global Partnership for Innovation, 93
CASE STUDY 6: COOPERATIVE EFFORT BETWEEN
U.S. PUBLIC AND PRIVATE SECTORS: PROPOSAL
FOR THE THR BE G OR GES PR O JE C T IN CHINA . . . . . . . .
..... 66
.81
.85
..... 94
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CONTENTS
NEEDED: INSTITUTIONAL STRUCTURE TO
PROMOTE GLOBAL ENTERPRISE..........
Organized Focus of Diverse Interests, 100
Attitude of Opportunity, 102
Research and Development and Innovation, 103
Building for Tomorrow, 104
xv
..100
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