A Framework for Enhancing Sustainable Competency of Small and Medium Contractors in the Ethiopian Construction Industry

Abstract

Small and medium contractors (SMCs) are vital in promoting socioeconomic development, particularly in developing economies, as they constitute a significant portion of the construction industry (CI). Their significance lies in their ability to create employment opportunities, generate revenue, develop infrastructure, and have strong links with other sectors of the economy, which have multiple effects on the country's growth. While acknowledging their significant importance and contribution, it is evident that there is a need to enhance and maintain their competency in light of various challenges affecting their growth. This research aims to devise a sustainable competency development framework for enhancing the competitiveness of SMCs in the Ethiopian CI and establish management mechanisms to facilitate their business sustenance. The specific objectives are to: identify factors affecting sustainable competency of SMCs; assess the effectiveness of the development programs in enhancing progress in the CI; evaluate the prevailing opportunities to create sustainable SMCs and develop appropriate improvement mechanisms to exploit these opportunities; and develop sustainable competency development framework for SMCs. The study employed qualitative and quantitative research methods. This approach allowed for gathering input from industry stakeholders, which was then used to develop the framework. The findings of this study provide a comprehensive understanding of the factors impacting the sustainable competency of SMCs in Ethiopia. The study identified the major underlying factors or challenges, such as the lack of project management skills; low-profit margin due to high competition; inability to access plants and equipment; and the inability to access financial resources emanating from endogenic core sources. Additionally, the study also identified factors or challenges stemming from exogenic core sources including unfavourable financial policy, lack of trust between parties in the industry, and uncertainty in supplies of materials and prices. Furthermore, the study's findings offer valuable insights into potential improvements that could enhance the prospects of sustainable SMCs development in Ethiopia. These improvements encompass encouraging local construction material producers and enhancing their capacity, advocating for an industry-based education system, introducing sector-specific financing programs, and implementing project planning, scheduling, and performance tracking practices. The study's findings highlight priority areas for enhancing competitiveness, providing valuable guidance for policymakers, regulators, entrepreneurs, and other stakeholders in making informed decisions.