In March 2009, when America remained mired in its worst recession in decades, The Economist noted that “America remains a beacon of entrepreneurialism.” Between 1996 and 2004, a period that encompassed one recession and the events of Sept. 11, the nation still created an average of 550,000 small businesses per month. 

As a nation of immigrants and risk-takers, America arguably has entrepreneurship written into its DNA. 

Not surprisingly, today’s economy is hardly dominated by big business. According to data from the Small Business Administration, companies with fewer than 500 employees comprise 99 percent of all firms in the United States and supply nearly two-thirds of all jobs.

The firms that tend to attract the most attention are at the cutting edge of technological development (e.g., Apple, Amgen) or its primary users (e.g., Twitter, Netflix).

Construction firms do not immediately come to mind when one thinks of revolutionary companies at the technology frontier. While the industry can boast BIM, advances in materials science and process innovations, construction today is often delivered in ways akin to the systems used several decades ago. In fact, evidence exists that worker productivity, defined as output per hour worked, has not expanded as quickly in construction as in most other major U.S. industry segments.

Given this, construction would not seem to be particularly adept at creating entrepreneurial opportunities. But it is. The reason? The industry is characterized by extraordinarily low barriers to entry. The stereotypical construction entrepreneur starts with a single pickup truck, an appetite for success and a willingness to live with enormous financial risk.

Over the years, Associated Builders and Contractors’ (ABC) economic team has had the opportunity to interview scores of construction leaders, including dozens of firm owners. For example, Brian Gill, who represents a typical and youthful construction entrepreneur in the state of Maryland, realized early on that contractors have become accustomed to a structure in which pieces of a project are systematically awarded to a variety of subcontractors. While this allows for more people to participate on any single construction project, it also means that contract values tend to be low, economies of scale are frequently unrealized and coordinating complexity is elevated.

Recognizing that a single firm could handle different parts of the same project, Gill formed Glass Industries, LLC in 2012. His company gives partnering firms the benefit of dealing with one company for all of their glass design, estimation and installation needs. Owning his own business gives Gill the freedom he might not have realized working elsewhere.

A New Way to Market Construction
As virtually every stakeholder knows, construction has not represented a first choice for many young workers because the industry struggles to shake its reputation for requiring employees to work odd hours in uncomfortable circumstances. In a world in which many younger people are striving to work at fashionable places like Google and Under Armour, construction has failed to emerge as a powerful magnet for talent.

But while many people would be happy to toil among the masses of technology workers in Silicon Valley or among the financiers of Wall Street, there is another group of Americans who dream of business ownership. Because of its low barriers to entry, arguably no industry, whether agriculture, manufacturing, entertainment or finance, offers the same level of entrepreneurial potential as construction. If construction as an industry wants to attract enough young knowledge workers, it will have to make this point more apparent to emerging labor market entrants, as well as to their families.  


Anirban Basu is chief economist of Associated Builders and Contractors. For more information, visit abc.org.