The growth of self-employment in British construction

Abstract

This paper explores the issues around the remarkable growth in labour-only subcontracting on a selfemployment basis in the British construction industry over the last 30 years. Following a presentation of the available data from the Department of Employment, the paper explores the reasons behind this remarkable development, and concludes that the main reason for the growth of self-employment since 1977 is the strategic choice of construction companies to emphasize flexibility over productivity as sources of competitive advantage. The paper also explores the implications of this strategic choice, and concludes that, as a result, the ability of the industry to increase productivity and quality is compromised due to the ways in which labour-only subcontracting and self-employment hinder training and innovation.