They're Coming to America

by Fred Moavenzadeh, Professor of Construction Management; MIT, Cambridge, MA,


Serial Information: Civil Engineering—ASCE, 1989, Vol. 59, Issue 11, Pg. 51-54


Document Type: Feature article

Abstract:

Foreign firms have been involved in the U.S. construction market for decades but their role has been small. Foreign contractors lacked information and communication skills and they believed American contractors were too efficient and technology advanced to be beaten at home. Now, foreign firms from Britain to Japan are investing in America, mostly through acquisition, at the rate of 11 acquisitions per year from 1978-88. The reasons? The size of the U.S. market, limited risk in America, and the appeal of U.S. technology and managerial know how. Also, merger options are limited in their own countries so the French and British, in particular, look overseas. Although specific strategies vary, many foreign investors perceive a demand and develop a specific skill to market in America. Furthermore, by competing in America, foreigners prevent U.S. contractors from making profits that can be redeployed elsewhere. To penetrate the market, a firm can open up branch offices in the U.S., engage in a joint venture or opt for full-fledged acquisition.

Subject Headings: Business management | Contracts and subcontracts | Risk management | Profits | Professional development | Joint ventures | Investments

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