Job creation in developing countries using concrete
Studies by the US Federal Highway Administration suggest that the construction of a highway project yields strong job growth both directly and indirectly for the economy.
Boston University (BU) did a great deal of research attempting to better understand the relationship between construction work and total job creation. It is interesting that their data comes from road construction projects, which relies heavily upon a functioning concrete supply chain for success.
They suggest that for every US$1billion spent on road construction, that 6,055 direct construction jobs are created. But because these construction projects are so tied to building material supplies, that an additional 7,790 jobs are created within the road work supply network.
All of these construction jobs create a significant number of consumers who in turn create even more jobs within a community as they spend money. The BU study suggests that consumerism results in an additional 14,000 jobs. This research would suggest that a billion dollar investment in an US road would yield about 28,000 jobs and significant economic activity.
These are big employment numbers even when you consider that advances in construction equipment technology has reduced worker count significantly. But what happens to employment when this technology is missing and does not decrease worker counts?
In developing economies, the benefit of modern construction technology is mostly absent, so employment counts are higher than in the US. For example: Nine cubic yards of ready-mixed concrete can be placed at an US job site by 2 people (batch plant operator and truck driver), but in Guatemala it could take as many as 20 people to do the same task.
Jordan Schwartz an economist with the World Bank has shared research that indicates that large infrastructure projects in Latin American and the Caribbean average 40,000 direct and supply jobs per US$billion spent. When all the consumer created jobs are added, a major construction project can create 80,000 jobs per billion spent.
Investing in quality infrastructure projects in developing nations should create jobs that will help to raise the economic fortunes of these countries. But choosing what projects to build is an important issue. Schwartz’s research indicates that some projects don’t create jobs because they cannot efficiently use the available skill-set to build a work force.
If a developing country chooses wind energy projects, the available skill-set in windmill construction is small, so local job creation will be stymied. But if they choose to build roads and bridges there are thousands of skilled and unskilled workers to quickly employ and feed the economy. In addition the materials to build wind energy projects are generally imported and “leak” jobs from within the developing nation. On the other hand, infrastructure projects that rely on local materials produce many jobs while supplying the work at the job site.
CementTrust suggests that investing in the concrete construction supply chain should be the first step in any infrastructure development plan. If developing nations have a trustworthy concrete system, they will not only build employment, but will also build more sustainable construction projects. Incremental improvements in the quality of cement-based building materials will have a great impact on global risk management, saving billions of dollars in structural replacement costs due to natural disasters. The added bonus is that economic fortunes will advance as the growing concrete supply chain begins to employ thousands of local workers.
International development leaders should recognize that investing effort in appropriately scaled technology in the concrete sector will reduce risk, improve economic opportunity and support a stronger overall construction industry.
Every good building developer knows to start with a solid base and then build up from there…