[Public Voices] Construction Industry in Crisis: The Solution Lies in Bonrip Doseong

Lee Chung-jae, President of Korea Construction Industry Research Institute

Since the Construction Industry Act was enacted in 1958, our construction industry has played a pivotal role in the process of economic growth. During industrialization and urbanization, it has laid the foundation for industrial revitalization and improvement of the quality of life by building social infrastructure such as roads, railways, and ports, as well as living-related facilities like housing and offices.

That is not all. The construction industry plays a key role in our economy, which has fallen into low growth. Over the past decade, the construction industry has accounted for 15% of the national economy and, as of 2021, holds 7.7% of total employment across all industries.

However, despite its contribution to the national economy, the construction industry is still facing a crisis with red flags. As has been pointed out for decades as a chronic problem, the construction industry continues to suffer from a rain-fed type industrial structure where the industry's prosperity depends on the real estate market situation, and it is perceived as a typical regulated industry.

Moreover, it continues to hold the dishonor of being ranked first in safety accidents. That is not all. The transition to digitalization is lagging behind other industries, and productivity remains at the lowest level. The aging problem due to the decrease in the influx of new young workers is also serious.

Recently, factors hindering the sustainable growth of the industry have been relentless, including disruptions in the global supply chain caused by COVID-19 and the Russia-Ukraine war, rising raw material prices, and economic slowdown.

What is more problematic is that all stakeholders?including the government, industry, academia, and research sectors?are taking the crisis and problems of our construction industry for granted. Although recent successive cases of poor construction and safety accidents have become major issues, the government still produces only short-term, ad hoc regulations and punishment-oriented measures. The industry tends to look for causes externally rather than making efforts for self-improvement.

For the continuous growth and development of the construction industry, it is necessary to comprehensively review and analyze the various risk factors present within the industry. Like people, our industry must also undertake efforts for treatment and structural improvement based on precise diagnosis from a mid- to long-term perspective.

This year marks the time to newly establish the Construction Industry Basic Plan and the Construction Technology Promotion Basic Plan, which are mid- to long-term statutory plans for the development of the construction industry and construction technology. This should be an opportunity to diagnose the entire construction industry and prepare the right prescription.

However, rather than a top-down policy formulation led by the government as in the past, all sectors of the industry must unite to gather consensus (總意) from a macro goal of improving the lives of the people and enhancing national competitiveness. Errors that could lead to exclusion or narrow-mindedness in the decision-making process must be minimized. Fortunately, the current government emphasizes private and market-led growth, where the private sector leads and the government supports, so this opportunity should be well utilized.

Also, each industry stakeholder must set the main directions for promoting industrial growth within their respective roles and pursue them with steadfast determination. The government must shift its policy paradigm from viewing the construction industry solely as a regulated sector to fostering it from a developmental perspective. The industry must devote all efforts to strengthening its own capabilities and introducing advanced management techniques to fundamentally resolve low productivity and recurring poor construction and safety accidents. Lastly, academia and research sectors should support strengthening industrial competitiveness through the introduction and dissemination of new construction technologies.

In the Analects, in the chapter "Xue Er," there is a four-character idiom “Bonrip Doseong (本立道生),” which means “When the foundation (root) is established, the way forward emerges.” Our construction industry must also establish the foundation by fulfilling its inherent roles in each domain, lead true national competitiveness, and continue its role as a central industry. The wisdom to turn the crisis facing the construction industry into an opportunity for wise overcoming lies here.

Lee Chung-jae, President of the Korea Construction Industry Research Institute

This content was produced with the assistance of AI translation services.