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Essay

Architectural feasts or professional fausts? a double perspective on the bargains of globalization

This is an article from the Architecture Australia archives and may use outdated formatting

WHAT ARE THE OPPORTUNITIES AND POTENTIAL COSTS OF A GLOBALIZED ARCHITECTURAL MARKET? PAOLO TOMBESI CONSIDERS THE AUSTRALIAN SITUATION IN PART ONE OF A TWO-PART ESSAY.

Global
economics chart. Data
taken from the following
sources. GDP data:World
Economic Outlook
Database of the
International Monetary
Fund, at 2004 prices.
Population and
urbanization data:World
Bank Little Data Book,
2001 edition. Other data:
World Bank World
Development Indicators,
2004 edition.

Global economics chart. Data taken from the following sources. GDP data:World Economic Outlook Database of the International Monetary Fund, at 2004 prices. Population and urbanization data:World Bank Little Data Book, 2001 edition. Other data: World Bank World Development Indicators, 2004 edition.

Global
architects chart.
Architects data (other
than Thailand) collected
by the Architects’
Association of Catalonia
(Collegi d’Arquitectes de
Catalunya) on behalf of
the International Union of
Architects as part of the
research project on
International Professional
Practice, 2003.

Global architects chart. Architects data (other than Thailand) collected by the Architects’ Association of Catalonia (Collegi d’Arquitectes de Catalunya) on behalf of the International Union of Architects as part of the research project on International Professional Practice, 2003.

INTERNATIONAL FLOWS AND professional exportation are not new in architecture. As Jean-Louis Cohen has pointed out, compositional models with a global reach go back to Neo-Palladianism, and international congresses of architects have been regularly organized since the end of the nineteenth century. The colonial experience was clearly based on the transmission of models, rules and methods of urban and architectural design; yet developing nations have independently turned to the architectural expertise of other countries in numerous instances. St Petersburg was built by the Italians and the French, as were many cities in Latin America. The turbulent history of the twentieth century also caused many to set off in foreign directions, leading to a widespread dissemination of modern ideals with a supranational thrust, facilitated by the intensified movement of acquired disciples. With the profile of the architect as urban reform expert assuming a global wandering posture – from old to new worlds and industrialized to industrializing countries – the whole epic of modern architecture was accompanied by temporary associations between local technical cadres and foreign master, epitomized of course by the quintessential journeyman Le Corbusier.

But if architecture has been crossing geographic frontiers for a long time, the circulation of designs and professionals has now reached new qualitative and quantitative levels. Over the last fifteen years, the convergence of telecommunications infrastructure and digital technologies has given rise to an altogether different professional paradigm which, in light of its ability to compress time and cover distance, has changed the modes of operation of architectural firms and drastically extended their natural territorial reach. With paper no longer an essential support to the transfer of information, the Prometheus of architectural practice has been unchained from the tyranny of place and physical document delivery, allowing architectural firms to operate beyond the old territorial limits of service transactions, and to build bridges spanning previously unthinkable distances.

The acquisition of professional mobility is proving particularly helpful for the architectural professions of advanced economies, which have found themselves in a position to service the industrial and economic take-off of non-Western regions with low levels of urbanization and subsequent low numbers of local building environment professionals. Firms from countries such as Australia and the United States, for example – where the current architects-to-urban-residents ratio oscillates between 1 to 1,700 and 1 to 2,000, and the average annual rate of growth of the economy has been sitting at around 3% for quite some time – have developed a strong presence in South and East Asia, where, statistically, one architect serves a current urban population of 14,000 people, and fulfils the construction needs of GDPs growing by 6% to 12% a year without mature building infrastructure in place.

Australia’s export of architectural services amounts to only a limited percentage of the sector’s national output. In 1999, depending on the definition of the design industry being used, between 2% and 8% of the gross fees of Australian architectural firms were earned overseas. Yet this value not only increases dramatically (up to over 20%) in particular sections of practice, it also shows high concentration in South-east Asia as well as a remarkable elasticity in responding to its economic fluctuations. For this reason, trade departments at both federal and state level now recognize that the professional service relationship between Australia and the surrounding region should be considered an integral part of the country’s overall service export strategy, and are actively supporting it. (Through submissions to the World Trade Organization for the elimination of restrictive barriers, the development of reciprocal agreements, the organization of architectural trade missions, and logistical assistance to exporting firms.) An as yet unpublished Anglo-American research report on international practice has identified Melbourne as one of architecture’s global cities, complemented by Sydney and Brisbane on the Australasian Pacific arena.

Geographic expansion policies and outcomes have so far been covered positively by the press. Australian architects working overseas have been compared to modern-day diplomats (“spreading local influence through the world” in the words of a February report from Melbourne’s The Age), and stories are relayed regarding the competitive advantage enjoyed by Australian firms in light of their cultural disposition, particularly over their North American counterparts. This last assertion may be more anecdotal than statistical, since the available international data suggests that, with approximately 80% of international billings, the United States and Europe are still exporting higher service value than Australia to Asia, and certainly to the rest of the world. But regardless of who’s in front, it is unlikely that anyone invited to the international construction party will be left out of the professional bonanza generated by the explosion of urban demand in developing economies, at least for the next ten or fifteen years.

Within this time frame, subtropical Asia and China will have to build enough space to accommodate the living and working needs of at least 585 million people – twice the current population of the United States – if they are to reach an urbanization rate of 50%, the average level at which the United Nations and the World Bank place middle-income economies. And this is without considering the amelioration of current urban crowding parameters, which in many Chinese and Indonesian cities is three to four times as high as Melbourne’s, while in India and Vietnam it is at least five. If one uses the same design-professionals-to-urban-population ratio – 1 architect for every 20,000 urban residents – that was in place in the United States shortly after the end of the civil war, in 1870, South and East Asia will need at least 30,000 professionals to service new construction alone. At current Australian levels, this number would grow to 350,000.

A proper devil’s advocate, however, would say that the problem is not whether work opportunities in Asia for Australian firms will stop in the short term, but rather whether the dynamics that have spurred such market growth will eventually turn against Australia and other current providers of professional services in the region, to affect their domestic profession. Let me explain.

The development of a global market has put Australian firms into direct professional contact with areas of the world that not only have a lower urbanization rate than Australia but also, in light of the former, a much lower per capita income. The low-income group of countries that comprises, for example, China, India, Indonesia, Vietnam and the Philippines still has an individual gross national product which, even when increased by the lower percentage of urban population, is at most one-eighth of Australia’s. And since the remuneration levels of the architectural profession reflect disparities in social wealth and cost of living, local architects in such countries have, on average, lower salaries than their Australian counterparts. In 2000, for the game of abstract numbers and foreign currency exchanges, the same virtual employer would pay an architect in the United States twice as much as the same architect in Australia, and ten to fifteen times as much as the same architect in the Indian subcontinent.

These figures, of course, are fictional. Firstly because they represent industrial averages; secondly because distant employment carries investment, governance and transaction costs that would drastically reduce their real differences. Still, since wages and salaries account for over 50% of the annual operating budget of Australia’s most efficient architectural firms, the ability to work from lower-cost locales or to pay lower wages can have significant effects over firms’ trading margins, which are approximately one-fifth of overall office overheads. If architectural capital could disperse according to relative production advantages, firms’ competitiveness or profitability would be enhanced by capturing productivity increases through rent discounts. (For example, all other things remaining equal, a 20% reduction in wages could yield a 40% increase in gross revenues.) As usual, the United States is showing the way. An August 2003 commentary in the American Business Week predicted that by 2007 as many as 14,000 architecture jobs will be moved offshore.

In ten or fifteen years, Australian architects working in Asia, but reproducing Western models of design (if not construction), will have been operating alongside local Asian firms, or will have employed a local work force, for the long haul. By the time construction pressures in those economies subside or become manageable by a domestically developed professional base, the following issue will arise. The comparative advantage that brought the Western profession into the Asian arena could give way to a reverse competitive advantage, bringing professional firms or work forces from Asia into the “Western” Pacific rim (and particularly Australian) market. This is a subject that very few have been willing to tackle openly thus far, especially as an indirect by-product of the first export component.

The reasons for this reluctance are multiple. The first is ideological. As in many other areas of the economy, the discussion on international trade tends to concentrate on productivity figures and brand names, either companies’ or design architects’, leaving organizational structures and employment strategies in the background. This may have some (distorted) logic in the corporate world, which is set to respond primarily to its shareholders. But in the supply of design professional services – a discrete and “lumpy” commodity that must be produced every time – the relationship between market activity and work force tends to be closer, because revenues are generated through intangibles more than equipment, materials or multiple product sales. Fragmented structure and romantic perceptions notwithstanding, architecture is a salaried profession; in Australia, if one excludes sole practitioner firms, the average establishments-personnel ratio would be almost 1 to 4. In this context, social wealth may be produced through fees but it is distributed mainly through salaries and other overheads rather than companies’ taxable income.

Many, however, have a tendency to dismiss the internal threat posed by future foreign competition on the basis of a technology-and-skill combination: Australian firms are better than Asian ones, and computer technology reduces the incidence of professional labour. Such evaluations fall within the classic conceptual framework of the “new international division of labour” developed in the 1980s, which emphasizes the separation between high-value-adding conceptual work and low-paid and low-skill routine operations, and ties it to advanced economies’ structural advantages in generating and sustaining knowledge. Given the lower level of preparation of foreign architects and technical employees, the work procured from overseas can only be limited and of limited scope, and is not going to upset the structure of professional employment of high-skill regions.

Recent events in the Australian telecommunications and banking industries suggest that such clear-cut views of north-south relationships could be over optimistic, or at least not in sync with the amount of socio-technical change that is actually taking place around the world. Aside from this, architectural practice may constitute a special case, given the historical existence or the formation of a somewhat common global culture of colonial descent, and the increasing reliance on technologically determined factors.

While architecture’s working tools facilitate the standardization of protocols and representational methods, the products of average practice are getting more and more homogeneous worldwide. If this were not enough, international education flows are helping the future work force of cost-competitive regions build geographically relevant training (with over 20% of the current architectural student population in Australia coming from overseas). In a few years, it will be difficult to hold out education (and technical knowledge in general) as the exclusive asset and professional advantage of their current providers.

The bottom line is that, regardless of its currently skewed dimensions, the geographic exchange of design services is an important element of future architectural practice in Australia because it contains the seed of a possible fundamental restructuring of professional work. And given that it seems to hinge on the support for particular international trade policies and the use of specific technologies – linked to digital information and naturally inclined to lighten the burden of geographic distance – it is unlikely that it will not continue to develop alongside these elements.

For this reason, architectural debate should start addressing seriously the issue of globalization in its various longer-term components. Trying to understand, for one, which social and disciplinary objections can be raised regarding the structure of work outlined above; what questions an eventual geographic division of labour would produce in relation to design development, from technical as well as economic points of view; which standards should be upheld, not only graphically but also in terms of professional preparation; what procedures, if any, can or should be adopted to control the work carried out under such conditions; and whether, in the end, there is any difference between building capacity and capacity building.

PAOLO TOMBESI IS A SENIOR LECTURER IN ARCHITECTURE AT THE UNIVERSITY OF MELBOURNE. PART TWO OF THIS ESSAY WILL APPEAR IN THE NEXT ISSUE OF ARCHITECTURE AUSTRALIA.

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Published online: 1 Jul 2004

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Architecture Australia, July 2004

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