(NTUST, 5908701)

Part 2, Advanced Civil Construction, 台科大高等土木施工學教材(2022) 

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

(mtkaoforum31@gmail.com) 

1. History, Present and Future of Professionalism and Construction Industry

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

a. Prior to the industrial revolution, in Europe and US the ratio between the wealth generated from investment and bequeath was high compared to the income from laboring (through personal capability and efforts). The figure then fell until World War I cutting it by half until it surged again in 1970s. Now it reaches the same level as it was in 1790. The same u curve could also be obtained for the ratio between capital and labor income:

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

As technology improves, the mid income people can enjoy comfortable life far better than many of their forbearers in higher centile of income.

- 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.

- Before industrialization, farmland was main source of wealth and income in Europe and US, and government bonds issued in countries able to manage fiscal. There’s no means that personal talent or professional skill would earn a decent income for individuals. (The only way people to remain in or ascend to high society had to go through inheritance or marriage.)

- 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.

- Globalization facilitates the fluidity of the commodity/service in the international market and set the cap in every economy for wages. One of the reasons the said ratio continues to go down after 1980s.

- 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 knows 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)

b. Persisting technology improvement makes economy flourish and life better; still some people in each social class need to struggle for livelihood and survival. Will engineers defined today can find places for performance tomorrow? 

-  Labor and Capital income: the former includes salary, remuneration, bonus,

prize; and the latter will include profit, dividend, interest, rent and royalty.

- 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. The top riches no more need so many people to attend them. 

-  So, the inequality aggravated after years 2000, and the people like Luddites during the first industrial revolution fear that the skills of their craft would go dumb during this Second Machine Age, and their commotion justifiable? Or really the smart machine and AI would create more jobs and enhance life quality?

-  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.

-   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.

c. 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?

-   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. 

-   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.     

-   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.

-   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.

-   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.

-   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.

-  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

-   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?

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

(1) General Contractors

a. 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.

b. 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.

c. 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.

d. 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 compels 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 tape and enjoyed elevated status, are the biggest winners in the change.

(綜合承商簽約金額龐大，掌握資源，對基礎工程是否、或如何施作有影響力，甚至介入政治。在許多國家，工程先於其他產業發展，為錢與權力結合之最明顯例證。

台灣之工程業，自早期因公眾將成本經費置於優位，政府主其事者亦鼓勵競爭，故設計監造者必站在施工者對立面，土木營造必與機電設備承商分業。因此於初期，綜合承商受眾多限制，只能按圖施工，再加上儒家思想認不動手設計者需有高學歷，較為尊重，顧問公司工作者相對有優越感。

目前新形勢，統包盛行，工程漸趨複雜化，綜合承商空間較前為大，其經理人與工程師需付較重責任，相對權力、薪酬與社會地位也將提高，此發展應為正面。)

(2) Consulting Engineers

a. The difference between the professionals and occupational regarding business ethics and attitude is that the former's must be dutiful, intelligent and conscientious for their clients and the latter do their works following the orders. 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 any form of punishment.

When engineers' re 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.

c. If we trace the history, we will know that professional engineering service was originally taken by individual engineers or the partnership they formed. In modern-days, projects for all complex nature not only require advanced technology; but also need proposals with exceptional commercial skill to augment chances of as-planned completion or to seek ways of meaningful mitigation. So, it takes kind of "omniscient "corporation consisting of bright people who are able to offer inclusive solutions at all times.

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 be better to accumulate experience, possess data, search for information, and churn out proposals.

Yes, only they are big they can have lots of talents adhered to share office equipment and software cost and are more affordable to meet the client's fastidious demands. Besides, financing, accounting, and administration rendered by big corporation will support the engineer for activities now needed to be more expeditious but intact, which can hardly be found in partnership and small company.

It's understandable when the clients want to make award the engineering jobs of multi-discipline nature, they feel more comfortable to engage with organizations of size and reputation. But such an observation shall not be over interpreted as that the big corporation doesn't have any problem in performance and cost.

d. So, a lot of clients today when want to make award of the engineering jobs of multi-discipline nature, they feel more comfortable to engage with organizations of size and reputation. But such an observation shall not be over interpreted as that the big corporation doesn't have any problem in performance and cost.

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 arguments 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 philosophic like vision, responsibility, work attitudes, but money is behind, if contradiction not solved the result will be exodus of high minded people, or the cooling down of remaining people's motives 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. The idea is different with the bonus and prizes scheme applied for companies to sell material, product, or simple services; requiring employees clinging to positions and to do more or less countable works.

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.

f. In Taiwan, the government handled the importation of construction technology closely during the days that the resources were scarce, and many of the engineers were trained on jobs like dam, petrochemical complex, expressway and military installations. 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.

The arrangement can solve remuneration problem in many professionals’ firms, however, it's not elixir for small engineering companies, the bosses of which always grumbled that the employees are impatient to demand profit sharing before showing contribution; but the hired complained their performance not recognized all the time.

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 arbitrarily 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 contracting with 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.

(專業工程師掌握工程成敗、經費、品質良劣，業主賴之。早期設計、監造，係由具自信與自尊之個人技師、工匠或專家個人名義或形態擔任，現大工程須為擁百、千人之顧問公司承擔，惟台灣之技師法，仍要求專業人員在其能力、判斷、與倫理對業主負責，由字句語義，可看出立法原意，然在實務上，工程變成大而複雜，如何讓團隊發揮效率，又不出錯，是顧問公司經營挑戰。

但台灣工程發展壯大經過，可看出從早期技術須由國外引進時，都由政府統一辦理，以圖利用及掌控有限之資源；或因社會變遷，民間實力增強，故政府力量就由施工方面撤退，但因信心關係，在設計顧問業仍為其掌握。故台灣在工程產業仍有廻異於先進國家之處，此可由公共工程費率、合約條件、乃至顧問公司經理與資深工程師薪酬等看得出來)