2021年3月20日 星期六

 PART 5-1, Advanced Civil Engineering Construction


MT KAO (Blog: http://mtkaoforum31.blogspot.tw/) (mtkaoforum31@gmail.com)1)

1)  Frontage Players: general contractors, engineers and consultants, architects, specialty contractors, labor gangs, investors.

(2) Consulting Engineers

a. The difference regarding business ethic and work attitude between the professionals and occupational is that the former are dutiful, intelligent and conscientious toward their clients and the latter just following the orders from bosses and formen. To honor and guard the professionalism, the professional decisions in no way should be compromised, twisted and altered by particular one's interest, thronged opinions, or punishment.

When engineers’ trusted and confided with responsibilities for safety, functioning, aesthetic, durability, budgeting and sturdy completion of construction projects, their judgement, opinions, and integrity must be respected, and most important, their service must be remunerated fairly as it's the backbone to support the idea that the professionals are the brains of their client.

b. The professionalism allotted to engineers usually include investigation, feasibility study, planning, design, supervision, project management and other services related to civil and building works, both public and private. 

In Taiwan, how the engineering service is practiced is sanctioned in "Professional Engineer Act":

Article 7 A professional engineer shall practice the profession in any of the following manners:

1. Establish an engineering office organized as a sole proprietorship or partnership.

2. Establish a professional engineering consulting firm or be hired by one.

3. Hired by a profit-seeking enterprise or entity, other than those mentioned in the preceding subparagraph, which is required by law to hire a licensed professional engineer.

If we trace history, we will know that professional engineering service was originated from craftsmen, lawyers, engineers or the partnership those individuals formed. 

c. The projects in modern days, for all the complex nature not only require advanced technology; but also need proposals with exceptional commercial skill to enhance chances of as-planned completion. So, it calls for all sorts of bright people offering more inclusive solutions.

Apparently, the professionals can well exercise their knowledge and skill disregard what their choice to sign the contracts in "proprietorship", "partnership" or "corporation“. 

But the industrial reality is that a corporation big enough may have more room to accumulate experience, possess data, search for information, so in a better position churn out proposals.

Also when they are big, a company can have lots of talents adhered to share office equipment and software cost; the same is true for the expensive supporting costs for chores, such as, financing, accounting, or administration. It’s important because it will free engineers’ mind so they are able concentrate on professionalism; considering the contradictory situation that the professionals have to be bothered by those chores if they have to do the works by individuals or small companies.

d. So, a lot of clients today when want to make award of the engineering jobs of complicated nature, they will feel more comfortable to engage the business with sizable and reputable companies, to relieve their responsibilities from the beginning.

But it’s just a trend and shall not be over interpreted as that the big corporations may have their own problem in performance and cost.

e. We all know the professionalism stems from individualism and entails characteristics unique to each professional: vision, responsibility, work attitudes, which shall be prerequisite to shape a concerted team undertaking sophisticated engineering works in competition with individual or more coherent partnership for efficiency and responsiveness.

Remuneration to the professionals remains a big problem in managing engineering companies as people always view their own performance impeccable and believes they are entitled for more than regular salary and bonus. The argument's often focused in profit sharing, and stays at every junction where company elite flaunt their eminence. People may imagine there could be a terminal arbiter in big engineering company busy to dole out verdicts to assure everybody's material and vanity reward will be met, but that's not realistic. 

For small engineering companies, the bosses usually grumble for the employees’ impatience to demand profit sharing before showing their contribution; but the hired will also complain their performance is never recognized.

The wish wise men may be there for positive intervention is a pipe dream in the real world, instead, egocentric human nature will prevail. Discords and disputes always happen between the quarreling parties, and the burst out usually take the form that people arguing over things abstract and virtue like vision, responsibility, work attitudes. But actually money is behind, if contradiction not solved the result will be exodus of high minded people, or the cooling down of remaining people's passions to learn new skill and knowledge.

Modern professionals firms will use options such as extended partnership or stock warrant awarding to employees to keep their loyalty. It's important because many people consider the company's gain is only possible with their affectionate engagement and they're deserved to share profit as partners.

f. The idea is different with the bonus and prizes scheme applied for companies to sell material, product, or simple services; which only ask employees sticking to positions and to do works countable and not unique for individuals. It may not be suitable for sizable and sophisticated consultancy; but a practice in Taiwan for national enterprises.

In Taiwan, the government handled the importation of construction technology closely during the days resources were scarce, and many of the engineers were trained on jobs like dam, petrochemical complex, and expressway. To counter balance the more advanced international companies, the government then sponsored big consulting and construction firms with the view that they could be reliable and competitive to carry out public work for the future.

Years after, the government was forced to withdraw from the construction companies sponsored as private contractors won over contention. However, the public consulting firms still remain and dominant in the engineering market, as they still receive the trust and patronage of government agencies anxious to launch infrastructure projects.

g. The government funded consultants pay their engineers of salary, bonus and dividends similar to what has been arrayed in other public enterprises of much less professionalism content. The practice omit that the services originally are individual-oriented and in the case of corporation the people must fetch not much less than their colleagues under sole proprietorship or partnership. Over time the side effect not pay enough to professionals will appear: efficiency discounted, talent lost to other industries, projects other than routinely implemented need to be done by international consultants.

The government funded consultants are more obedient to follow contract terms freely interpreted by public servants short of flexibility in forecasting project requirement and rectifying them later. So the government agencies prefer to award sizable engineering works to government funded consultants and thus strengthen their dominant position in the industry despite private design firms always crying foul saying that the state shouldn't interfere the market.

It's nothing wrong in a society actually embraces egalitarianism and hates to pay some of professions high price to continue the practice awarding the contracts to government funded consultants as many public works can be carried out with minimum cost and completed in time desired by the officials and end users.

But when technology bred domestically may not be sufficiently advanced as the result of individual's lacking of incentives because there’s only one buyer for the public works-the government. The foreign consultants or architects will be eager to fill technical gap but only at dear prices. And any attempt that the government agencies to ask affiliated firms to bridge the difference in terms of price and contractual obligation will introduce further procrastination and induce secondary damages.



(3). Architects

a. On the other hand, recent earthquakes and associated perils shook the generally untroubled profession for liability as the latest enacts and verdicts hold them accountable for supposed wrongful design and supervision years after buildings completed, fair or not, the profession needs to be big at least for more risk absorbing capability, though it can hardly grow under the law that it can't be organized into company.

b. In reality, since the architects are short of profit sharing scheme with employees, that they have difficulty to keep fellow employee's royalty and recruit bright new ones. Ironically when the hired shrewd enough to see the situation not favorable to them will try to start their own business and worsen the competition in a small market.

And now in Taiwan, the new comers granted architects' licenses are in high number, but real estate boom is over; competition among architects, most of them small, is very serious.

So many architects in Taiwan are nervous and plead to relevant government agencies:

1. The fees allowed for public building design are calculated as fix percentage of  construction price, and now both the percentage and final construction cost are low so petitioners requested an improvement. 

2. That the cooperation with reputable international architects shouldn't be necessary as local architects are artfully good and technically competent. For officers fantastic with lavish building outline and avant-garde design should ask local rchitects to implement. Current practice inviting foreign architects playing protagonist and forcing their local partner shoulder contractual obligation are not acceptable. Though, many private developers still court international architects because the "names" will boost the house sale. 

3. The architects consider the responsibility of supervision during construction shall not on their side and shall be rectified with clearer definition in the laws.

Traditionally, the market is small for Taiwan architects that they have to be more internationalized.

(4). Workers, Labor Gangs and Subcontractors

a. In Taiwan, that General Contractors did not own equipment and hired technicians and labors for actual construction. They would sub-let the labor work to subcontractors or worker gangs for the reason of convenience and so finally they would lose ability to deal directly with labor; sort of degeneration or eutrophication!

There might be craftsmanship existed among the labors to guarantee work efficiency and quality; but the contractors in Taiwan will prefer to replace the subtle labor management with simple rate and quantity relationship, and leaving gang leaders the responsibility to recruit workers and pay workers at almost fix rate wages. By doing so, general contractors would transfer the risk of income fluctuation to the labor gangs and subcontractors.

Originally main contractor may allocate the works to different gangs such as rebar, form work and concrete pouring, but still took care of coordination and supervision works required for the said structure construction; and now main contractor might ask one sub-contractor to undertake whole works so as to save cost for engineers required for coordination. The process continued, main contractor's role reduced, that in some cases, the workers at site had to be smart enough to do the works autonomously.

b. Though engineers will draw plans, pen proposal, and check mistakes; construction work has to be carried out by labors, technicians and foremen with hands, and it's them to materialize white collar's ideas for all difficult, dirty and dangerous work environs. The practice had historical background dated back from the days that labors were in over supply and their salaries were suppressed, work condition miserable. At then, management of main contractors were able to leave the drudgery to people with social class distance far away from them.

Work division in Taiwan construction industry become vertical like fault line in many cases, i.e. a sub-tier will do in situ construction; the other maybe the main contractor offering the name, provide guarantees, and maybe take care of documentary works. It allows certain type and numbers of people venturing to obtain profit while the other parts have to trudge for mere survival all the way. A reason that people like to gamble on construction business

c. But there is demography change, technology evolution, and managerial transcending in 21st century, now the labors reluctant to stay at for hard labor. Crews shrink and members are aged, they demand safety, reject toil, fall short in dexterity, hesitated to commit in works as their forerunner. So the contractors signing up the construction contracts can't find enough gangs and workers for their projects even with TCN (third country national) joining the team.

The work conditions at construction sites, compared to factories and service sector are bad. The parallel was like coal mines of Taiwan in 60's: unsafe, hard, and expensive to extract, the workers were aged and diminishing. Contrary to what bureaucrats thought of that it was the exploitative owner-labor relationship hurting the industry, the mine owner actually coddled the old men until the end of operation.

(5). Specialty Contractor

a. First the specialty works was defined as special project requirement introduced from outside the country, they fetched prices and rates equal to international level which many Taiwanese contractors deemed unfair. So there had been strong tendency in Taiwan, everyone from client, consultants to contractors will encourage those dared to imitate the imported technology and break the oligopoly: foremen and fellow labors learnt the construction method, equipment and plants made in local, so was the material to corner the market replaced by those reachable in Taiwan.

b. As the result, most of the international specialty contractors withdrew from Taiwan, and the natives took over; the stories happened to work items such as diaphragm wall, grouting, travelling wagons, system form works, and cable and tendons, all taking places within very few years.

To certain degree the locals created wonders; many of them endured failures and finally smack technical Okays. But financially it's not Okay for companies having done R & D works so much and only received puny overhead and profit because even among the winners the contention is harsh.

c. In general, the companies doing the specialty works in Taiwan can't distinguish with ordinary sub-contractors, instead, many of them under pressure that their equipment, plants and crew must undertake next job to continue the business. So they're forced to bid the total tender package as other general contractors if they're lucky enough also to be qualified.

Then the borderline between the specialty and general contractors is blurring and either it's the cause or the fallout that specialty contractors are not respected for their expertise. The industry will cease to progress technically because the people exhausted fighting international colleagues only attained mere survival in the event they could win. So they wouldn't have motives and strength to go for another round of invention.

When the specialty contractors have little prospect to grow and go for international, it's not advisable for the freshman to develop their career in such companies.

(6). Investors

a. The investors play key roles in construction projects as they have vest-in interest for success of investment. For public projects there will be elected officers and administrative in government agencies speaking of requirement in details but they have to be confined by opinions from experts, media, and councilors. For private business, it seems like the investors have tremendous power searching for maximal benefit, but they have to be bound by laws, regulations and the same-public opinions, the hidden rule of democracy.

b. Investors in developing their projects must meet higher than standard rate of return, also from beginning, they have to decimate risk and uncertainty that fund and banks behind relentless to pursue. Among the concerns, quality and in time completion shall be most critical, but that's only fundamental. In the case of real estate developers, they must consider buyers or tenants' requirement for buildings; and for plant owners they must consider purchasing contracts for product and stability of the market. Because long term investment security is now desired, the frontage investors should pay additional premium to guard their principle and the eventual capital holders are assured and pleased.

c. It's 21st Century, in order to deliver the projects, or to get hedged when odds do happen, cost paid to notaries, law firms, inspectors, laboratories, appraisers, and certifiers can be regarded as more important than expenditures for tangible object such as concrete and steel, despite they only add up puny protection for investment, complete reversal of material scarce yesterdays.

Public clients tend to be more difficult; though they may not quantize the risk and seek coverage, but everything must be definite at day one or they have to go through onerous procedural justification. Theoretically, consensus must be collected before set up project goal, but the political requirement: compromise, prejudice and well wish will overshadow the implementation and take away the experts' opinions. Election and office change further complicated the matters as politicians and voters are not predictable, sometimes U-turn is necessary, projects hard to finish is everywhere over the world.

d. Investors, private and public, are now asking the professional companies to work for them as PCM, a good system but occasionally not functional because the clients don't really delegate powers. The other extremity is the government agencies don't have their own people installed in the high positions of the project to determine how their true demand will be met in concert with financial capability known to insiders.

For ordinary case, little can't be programmed according to records and data available at the hands of officials holding the powers of budget approval, progress control and performance audit; it means the non-professionals can claim their means based on statistic and bureaucracy is workable and better entrusted by the public to manage national coffer.

However, the attitude said above is a kind of hubris under which the professionals are frustrated and muted. Because the construction market isn't always the same that the routine will not always be routine; only the professionals will offer solutions to overcome the blocks huddling the launch of construction works.

2021年3月13日 星期六


 PART4, Advanced Civil Engineering Construction


MT KAO (Blog: http://mtkaoforum31.blogspot.tw/) (mtkaoforum31@gmail.com)1)

4. Of the macro-Economy and Construction Industry

1). A quick developing economy really needs good infrastructure to keep bustling, or to lose momentum. Consider the case in IT-savvy India, the dilapidated roads, ports, and power systems often slash several point GDP off every year while Japan, Asian tigers, and China seem not to be bothered by poorly or untimely construction of infrastructure for their economic success.


2). Construction of infrastructure projects for its diverse requirement will stimulate demand of building material, construction machine and tools, furniture, and services like advertisement banking. On the other hand, when social and economic developments come up, the construction industry will be benefited, for example, people are more affordable for new houses.


3). Important government posts in young democracies need participation of civil engineers. Often they hold positions up to the cabinet level drawing national development plans for years and decades. It is the term “technocrats" applicable for those people that their expertise is hardly to be replaced under regimes of different ideologies. Possibly their political life will outlive the politicians promoted them.


4). However, construction people sometimes risked to become accomplices of powerful people stealing public money. The reason is that infrastructure contracts usually involve tremendous sums and require different sub tier companies to perform the works, therefore the illicit money is easy to hide and parking convenient. And when a regime runs out of cash there will always be wicket foreign governments or syndicates eager to provide loans and aids without strings in the name of infrastructure development for bad  political intention further damage the country. 

Thus many developing countries with abundant resources can be end up in debt and poverty, the so called resource curses, because the politicians and their cronies will take advantage of the countries' limited fortune. Under simple calculation, money spent will never buy equal value of infrastructure, and contractors are blamed as scapegoats.   

The bad story of construction conglomerate, Odebrecht of Brazil demonstrates the farce/tragedy in the past few years: presidents, premiers, ministers, parliamentarian, businessman and people of significant suicides, imprisoned, indicted in more than 10 countries.



5). Contractors always excuse themselves for the need to continue business as the reason to be the collaborators of the kleptocracy; but the cruel truth is they enjoy lucrative contracts and believe their political masters will cover them up forever. But in the long run the systematic fraud will have destabilized the economy and country, the politicians will no longer hold up the regime and the professionals forsaking their principles will be expended before anything will happen. 

Professionalism should be the only antidote to fight the greedy and impunity behind the organized corruption. Ethic education has to be enforced since the early days of engineers training.  Of course, it needs time, patience plus a little bit of luck to work out a fair system in a society still in obscurity. 

Unlike many developing world, Taiwan escaped endemic corruption during and after the days massive infrastructure projects are under construction. There was time that people had to build everything from scrap with their own hands, the mere money dispensed by the then authorities could only pay subsist livings of surplus rural labor and retired soldiers withdrawn from Mainland in 50's. And the factional politics followed the period hardly allowed the people involved for public expenditure had leisure and chance to scrounge for personal gains, compared to what happened in other third world country.


6). An engineer trying to promote top notch infrastructure projects sometimes may feel frustrated because the resistance from general public is so much. Under the circumstance, he should realize public works should always be kind of choices by their eventual owners and not to be imposed by the experts as pure scientific matter. 

The civil engineers should realize the efforts he rendered explaining the idea for new construction or to comment upon the existing unfit things will not be in vain, because each time he gives reasoning, persuasion and novel idea following professionalism, he can shake, crumble, and change public perception incrementally. And finally it will be crystallized in truth’s favor, the process though taken long, also prove that everything related to construction is not simple logistic yes or no. 

On the other hand, the civil engineer should realize all the information offered to public will only be considered as brute data instead of precise evidence, which can be refine or redefined as environment and situation will change from time to time.




5.  The Modern Construction Industry and its Major Players

1)      Frontage Players: general contractors, engineers and consultants, architects, specialty contractors, labor gangs, investors.

(1). General Contractors

In most of the countries (markets), general contractors are leaders of construction industry commanding critical portion of resource and exercising vast influence in democratic government and authoritative regimes alike. Wherever their interests go, the construction tycoons can decide how infrastructure projects are done, and affect politic at different levels.

Given the imagination that big construction company always have the clout to maneuver for what they want, young talents flock to them before they know the industry. The stories of power and money associated with construction projects are tellingly true from country to country as the industry get momentum to grow and prosper before any other business have chances to evolve.

However, in countries like Taiwan, the wary authority and public are too eager to see the competition flared among the contractors and always think it's a good way to save government expenditure. So, every contracting procedure related to public works from budget allocation till their completion is mired with details presumed to plague constructors so public interest can be safeguarded. There it develops a mentality that the consultants responsible for design and supervision can be more trust-able to protect public interest in the ceaseless feuding with pigheaded contractors.

As a result, the bureaucrats and public prefer to ask the contractors to do the works according to what had been specified on the drawings, i.e. pure construction; they believe they would be able to prevent collusion by squeezing the space normally granted to designer and contractor for settling the ensuing conflict.

The purposed regulation as explained above existed so long has weaken the contractors, besides, in a society much influenced by Confucian culture, the traditional teaching that the scholars are superior to any other social classes further reinforce the prejudice that the employees of constructors working outdoors under all-weather would be secondary to pedants shouting instructions in the air conditioned rooms.

Finally the employees of general contractors have to do the most grinding part of the works to ensure punctual completion and well-functioning of the projects, which is nerve raking throughout entire contract period. And in return construction engineers only received diminishing amount of pay under constant annoyance that the threshold for tenderer to cross is lowered time after time allowing more people to contend.

It's true that general contractors in Taiwan were not so privileged compared to the coddled consulting firms because of some historical and cultural reasons. However, constructor of the 21st century should not only be able to deliver timely and quality completion of the projects, he needs also to give the clients solutions for challenges and risks brought by exceptional design, complicated operation and maintenance systems, special environmental protection requirement, unique financial arrangement; and it means, the imbalance between the images of general contractors and consulting firms now tilts a little bit toward the former.

It's also good for general contractors in Taiwan that the procurement laws and regulations overhauled in recent years: design and build contracts are welcome; division of business lines now blurred; BOT or BT style of contracting are taken and design consultants can be put under sovereignty of general contractors; projects become more sizable and fit for companies with bigger assets; labor law is more sensible thus favorable the contractors' employees who used to work in onerous long hours.

The trend compel owners, governmental or private, to accept more reasonable and liberal form of contracting, so that the constructors can pursue expertise and efficiency they need for true competition. Obviously, general contractors burdened with less red taps and enjoyed elevated status, are the biggest winners in the change




2021年3月7日 星期日

 PART3, Advanced Civil Engineering Construction


MT KAO (Blog: http://mtkaoforum31.blogspot.tw/) (mtkaoforum31@gmail.com)

3. How will young man start his professional career?

1) Young professionals must try to learn from the beginning the ways that political institutions, social establishment, and commercial interest groups exert influences on each other and make their compromise to make the government operational and the economy functioning in the real world. 

In a democracy or open society, the elite, instead of accumulation of people, must settle and conclude for what to do in terms of government policies, economic agenda and social behaviors for now and future. And engineers are part of them and not those to be informed and ruled, so will be involved in the process contributing intelligence. 

So as professionals, it's essential to know who the ultimate stakeholders are. Understand their strong feeling or wanting to wish something to happen and knowing that there will be the most sensible and efficient way to meet public interest by social norms, market rules, and not the least, regulations and laws.


Never mind the possibility that bad side of humanity always have chances to get through in an open society and free market; and trust that the corruption and rent seeking will be diminished under long practice of liberalism and democracy. 

A young beginner has to think bigger than what he will have learnt from the textbook which present to him maybe a serene technological realm; rather, he has to learn reasoning, contention and compromise that always happening in a bustling world from the outset. 

We trust that candid engineers with sufficient secularity knowledge will be able to save the industry and the world one day.

2) The professionals don't produce, manufacture or build, they only offer design report and solutions based on professional knowledge accrued through education and training. The services provide plans and procedures to bring about machine, house and other complex things; and are required and valuable more than the clients would recognize.  

The professional knowledge isn't the same as common sense and experience derived in daily life by any person. It's of professionals' the pride made them distinguished from ordinary people, however, the exercise of them so as to apply the concept, principle and information learnt correctly, need professional " skill", the ability leading to success.  

World Economic Forum (WEF) in 2020 consider the most important professional " skill" consist of the ability for: complex problem solving, critical thinking, creativity, people management, coordinating with others , emotional intelligence, judgement and decision making, service orientation, negotiation , and cognitive flexibility, though not to be stringently followed but meaningful in the practice. 

Finally, the professional has to exercise good "judgement" based on experience, analysis and endeavors to accomplish missions assigned to him by the project. It's the most difficult parts for the professionals because only a humble and experienced engineer believes this's an uncertain world that only through endless efforts the probability of success will possibly rise up. 

3) Right altitude shall be most important for freshmen; and they've to be steadfast when offered elementary skill and details. Always the new starters don't appreciate the facts that technology advances only going through repetitive working on simple topics in the boring assignment.

Young people must know right attitude breed passions, which kindled with appropriate conceptualization and inflamed by curiosity will drive them for decent performance and further inspire innovation and creativeness. Also when they consider themselves fully engaged in the industry they will be able to tell what is good and bad, right and wrong, full-hearted or cold shouldered for their career. Then it's time for them to be in a position to solve problems lately and retain a prominent position in the industry. 

Though engineers take time to be mature, which is in great difference with many other professions; they must determine what they will be at early stage according to their awareness and capability: consultant or contractor, technical or managerial, domestic or international, employed or boss. It means people shall identify his own personality and recognize the ability to adapt is rather limited before coming to age, say 30s, in a turbulent world. 

Besides, young man also needs to be bound by degrees of the objectivism; so in most of the cases he has to obtain as many as possible licenses, certificates, and academic degrees in line with many countries' system.  

4) The young student must understand that the modern construction industry essentially is governed with human distrust: terms of contracts, laws, certificates, checks, guarantees, tests, investigations and reports, are used to stimulate the antagonism between, and also to protect, parties with confronting interests. 

There is an accelerated and gravitated tendency, especially in the developed countries that the added value allocated in the name to protect the benefit of final owner/investor has outweighed the expense throw in for engineering and construction. The outcome is that the engineers lose its importance playing their roles and professionalism rooted at trust and confidence between the clients and engineers reduced while legal and financial people commanding.

Young professionals with less confrontational mentality may strive to turn the tendency back so that non engineer's gradual domination on the industry to prove the technical world is still belongs to the engineers. 

5) Young engineers shall trust the systems and accept the lead of the higher-up with patience from the moment he join the organization employ him. In his tenure as a team member people will learn to cultivate personal character, discipline and professional strength, and to lead an engineering team when time ripen.

Even in a relatively small engineering company, there's still requirement to be a good leader, which at least will be:

(1) Create a steady and sound work environment, face difficulties with resolutions so that the professionals will work efficiently.

(2) Find the new customers and win their trust.

(3) Reward those who work hard with decent pay.

(4) Adopt strategies for development that the Company needs.

(5) Recruit people of high talent and take the lead in competition

(6) Let the people in the team do what they are able to do

6) Unlike manufacturing or IT industries, construction business has its origin and background attached to history, culture and custom of the vernacular country. So the contracts and the trading systems used for engineering related contracts also need to have tight link with human affairs and common sense of the vernacular country. 

To be a successful engineer one has to secure more humanity characteristics and know more about social behaviors, and pay respect to tradition and conventional wisdom which may be dismissed as redundancy soon to be discarded in the process of modernization. Eventually, engineering is an art rather than a science, if your approaches to the clients, colleagues or even competitors are in more civil ways from the young days, you're successful.

2021年3月3日 星期三

PART2, 台科大高等土木施工學教材(2021), Advanced Civil Engineering Construction

MT KAO (Blog: http://mtkaoforum31.blogspot.tw/) (mtkaoforum31@gmail.com)

2. The income distribution change in the total economy last few hundred years; and its implication to the earning and social status of professionals:

1) The ratio between the income through personal capability and efforts, and that from investment and bequests (between generations) does change since the industrial revolution; and how it influences the allocation of talent between generations. 

(1) Labor income: salary, remuneration, bonus, prize. Capital income: profit, dividend, interest, rent and royalty. 

(2) Prior to the industrial revolution, the income generated from bequest was high compared to that from laboring in Europe and US. The ratio kept constant for 100 years until World War I and a downward trend started cutting the figure by half until it surged again in 1980. Now it reaches the same level as 1790. The same u curve could also be obtained for the ratio between capital and income.

(3) Before industrialization, farmland was main source of wealth and income in Europe and US, and government bonds issued in countries able to manage fiscal policies well also provided alternatives for investment. Otherwise there’s no mean that personal talent or professional skill would earn a decent income for individuals.

(4) So in the old days that the only way people to remain in or ascend to high society had to go through inheritance or marriage. When after World War I the professionals continued to increase their income and wealth by their own merit, people started to herald it as the beginning of a new era of more inclusive capitalism and trust the trend would not revert. But what happened between 1980 and now proving that it was just a transitory deviation. 

(5) Proper income in 19 Century means at least you have to obtain 20 to 30 times of average national income, and only top1% rich people would achieve it. Professions like lawyer, accountant and engineer would get at best 10 times of average national income and considered as slightly better than the “poor”.

(6) Bonaparte Napoleon first noticed the problem and agreed to give high pay to reward his ministers so that they might match the aristocrats for respectable living, which means an income no less than 50 to 100 times of average national income.

2) Continuous technology improvement makes economy flourish and life better; still some people in each social class need to struggle for livelihood and survival as distribution inequality persist.

(1) Technology is a major driver of productivity and economic growth creating prosperity. The top riches no more need so many people to attend them and mid income people can enjoy comfortable life far better than many of their forbearers in higher centile of income.

(2) Exploring the effects of technology on income and wealth will find inequality aggravated after years 2000. The undisputable root causes are advancing technology and borderless globalization marked as The Second Machine Age. Would people like Luddites during the first industrial revolution fear that the skills of their craft would go dumb so this time their commotion justifiable, or really the smart machine and AI would create more jobs and enhance life quality?

(3) The computer/digital revolution is a major driver of inequality: It favors more skilled over less skilled; it increases the return to capital owners over labor; it enables or turbo-charge globalization, reducing employment and constraining wage-able services; it increase the income advantages of superstars and the super-lucky; it generates rents in highly imperfect markets.

(4) As we understand now, progress in sensor technology allows machines to detect and respond to their environment; additive manufacturing displaces labor while reducing waste in materials, lowering the costs of customization and allowing for producing on demand(opposed to forecasted demand); the most surprising is in artificial intelligence (AI), machines uses learning algorithms and high speed network access to massive databases to perform complex tasks without the benefit of algorithms that tell them precisely what to do.

(5) In the fundamental feature of market systems, most people including engineers gain their income by selling their labor, if they’re rendered technologically redundant or no longer command an income adequate to provide a socially acceptable standard of living.

3) What will a young civil engineer choose to be? Occupational, professionals or super managers considering their restrained income compared to capitalist and renter (or rent seekers)? Is it correct to borrow “meritocratic extremism” to justify the tremendous pay difference among the individuals?

(1) The engineering services need to obtain their clients’ trust and confidence, distinguishing them with the manufactured products and/or services by ordinary people. Compared with workers, clerks and other occupational, the professionals place much attention to guarantee the quality of their output and refrained from remuneration based on quantity completed especially within specific time. He thinks and acts on behalf of his client and always consider himself is unique in delivery of art, crafts and services committed to the client. 

(2) But now that significant share of the income shaped by skill-biased and capital augmenting technical change; the professionals of conventional definition may not be in a steering position, that software, tradable programs and even AI will do much of the engineers’ job diminishing their clout in retaining work opportunities and sharing income .     

(3) Is actually income generated by digital capital shared with certain kinds of complementary human capital, including innovators, entrepreneurs, and top executives? Among them, the super managers with winner take all mentality popular in US deserve our attention because they may pride themselves with “meritocratic extremism”, nose in the air.

4) Will it be practical for engineers to follow code of engineering ethic in terms of faith, integrity, law abiding, and conduct of secrecy at the era when digital economy and artificial intelligence is about to dominate.

(1) Engineering ethic request the engineers to take responsibility toward society, environment and the colleagues. As FIDIC maintains: To be fully effective not only must engineers constantly improve their knowledge and skills, but also society must respect the integrity and trust the judgement of members of the profession and remunerate them fairly. And it’s the brief requirement.

(2) The “information technology intensity of a company”-as measured by the ratio of its IT capital stock to its total stock –rises in modern engineering company demanding more return than from human capitals previously formed by employed engineers.

(3) When the income generated by digital capital becomes more significant, at the same time corporate governance practices and social norms will also change allowing more rent-seeking behavior because there will be less humanity control by smart machine and AI. Will it be the same easy to and simple for professionals to follow code of engineering ethic when their sharing in total company income much less than before.

5) Can “Engineering as a Vocation” be honored in Taiwan when material reward is meager compared with devotion paid? Can the passion, inspiration and rationality as a professional be kept as the vocation is life time choice?

6) Lines from “Capital in the Twenty-First Century” by Thomas Piketty, “Le Pere Goriot” by H Balzac, to tell how the excellent brains were paid by ruling class historically.

“Your annual income will be 1,200 Franc when you’re in 30’s without giving up rob of blending. You can get married with daughter from gristmill collecting rent 6,000 livre annually. If you’re lucky you can have 5,000 Franc annual incomes as a public attorney, and you can married with mayor’s daughter. If you don’t mind to do something under table, you could become general attorney at your 40s. But allow me to remind you, there’re only 20 general attorneys in entire France, and the number of the people thirst for the jobs maybe more than 20,000, among them many clowns ready to sell out their relatives and friends. If you don’t do this; you can be a lawyer, spend 1,000 franc every month to borrow a small office; for 10 years you must keep relationship with the people, kiss any solicitor you know's rob and beg him to reward you some cases, in addition, you need to bow to every people you meet in the court as a lawyer. Tell me can you tell the names of 5 lawyers younger than 50 in Paris who have had annual income more than 50,000 Franc?”  (Vautrin said to Rastignac)