Competitiveness and Informal Economy Practices of Architecture Engineering and Construction Consultants

Abstract

Purpose –The Nigerian informal economy is expanding significantly particularly in the built environment due to the ever-increasing demand for infrastructure development for Nigeria's developing economy. The increased demand for infrastructure results in active competition between the formal and informal sectors' activities of built environment consultants. The study investigates informality and competitiveness among Architecture, Engineering, and Construction (AEC) consultants.

Design/methodology/approach – The study deployed the quantitative method and adopted a survey design. A structured questionnaire was administered by hand among AEC consultants randomly selected from various AEC consultancy practices in Lagos.

Findings – The study established that some AEC consultants operated informally due to the tedious process and documentation involved in obtaining a business license and not necessarily to avoid tax payments. The study established a positive relationship between the competitiveness of AEC consultants in the informal sector.

Research limitations– This study focused on consultancy firms in the AEC sector as an integral part of the built environment. The research is limited to AEC consultancy firms in Lagos, Nigeria. Some respondents were reluctant and declined to disclose information involving their participation in the informal economy.

Theoretical/Social/Practical implications – The study established a positive formal-informal linkage among AEC consultants in the AEC sector, consultants should take advantage of this linkage to enhance their competitiveness in the AEC sector.

Originality/value – There is a positive relationship between the competitiveness of AEC consultants in the formal and informal sectors. The implications of informality among AEC consultants are social, economic, financial, contractual, and governance-related