Some results from a system dynamics model of construction sector competitiveness

Abstract

Despite government-led good practice initiatives aimed to improve competitiveness in the U.K. construction sector, fluctuations in growth-driven demand, investment and constant regulatory revisions make it very difficult for an enterprise to plan strategically and remain competitive over a timescale exceeding 2-3 years. Research has been carried out to understand the historical evolution and changing face of the construction sector and the dynamic capabilities needed for an enterprise to secure a more sustainable competitive future. A dynamic model of a typical contracting firm has been created based on extensive knowledge capture arising from fieldwork in collaborating firms together with a detailed review of the literature. A construct called the competitive index is used to model contract allocation in a stylised market. The simulations presented enable contracting enterprises to reflect strategically with a view to remaining competitive over a much longer time horizon of between 15 and 20 years. The rehearsal of strategy through simulated scenarios helps to minimise unexpected behaviour and offers insights about how endogenous behaviour can shape the future of the enterprise. To date, work on construction competitiveness has been either of a static nature or set predominantly at the level of the project. This study offers a new perspective by providing a dynamic tool to analyse competitiveness. It creates a new paradigm to support enhanced construction sector performance. © 2011 Elsevier Ltd.