The construction industry in the whole world faces obstacles. However, in the developing countries, these difficulties and challenges are present alongside a general situation of socio-economic stress, chronic resource shortages, institutional weaknesses and a general inability to deal with the key issues. This report lays out some challenges regarding the construction industries faced by developing countries, which are construction industry development, globalization, culture and the environment.

  Construction industry development is a deliberate process to improve the capacity and effectiveness of the construction industry. Construction industry development promotes increased value for money to industry clients as well as environmental responsibility in the delivery process and the viability and competitiveness of domestic construction enterprises. Different countries have formed agencies to monitor continuous improvement of the industry. In the UK, the Construction Industry Board is an industry initiative, whereas its counterpart institutions in developing countries are government agencies. They include the Construction Industry Development Board of Malaysia, the Institute of Construction Training and Development of Sri Lanka and the National Construction Council of Tanzania (Miles and Neale, 1991). Singapore’s Building and Construction Authority is also a government agency. One thing to take note is that construction industry is a continuous process. Numerous countries have recently plan long- term projects for improving their construction industries. This includes Australia (Australian Procurement and Construction Council, 1997), Hong Kong, Singapore (Construction 21 Steering Committee) and the UK (Latham, 1994; Egan, 1998)

 Next, globalization is a trend which has occupied the headlines of major popular publications for several decades. There are sharply different arguments on the merits and otherwise of the process of globalisation from the perspective of the developing countries. CIB Task Group has a short- term which aims to study the implications of globalisation for the construction industries of developing countries.

  The project procurement and administrative arrangements currently in use in developing countries have been inherited from Western countries which have a different history, culture, collective experience and breadth of construction expertise. Culture has become an important area of study in business organisations (see, for example, Hofstede, 1980). It has been found that every organization has a culture which is determined by its history, size, corporate goals and objectives, technology of production, market, and operating environment (Handy, 1985). In construction, where several organisations temporarily interact on each project, cultural issues are constantly to the fore (Barthorpe et al., 1999). The ability to manage cultural issues, especially in multi-cultural situations as are encountered on large construction projects, is a determinant of project and corporate success. Construction industry must differ in every country as each country has their own uniqueness in culture. Therefore, effort has to be put in to formulate procurement approaches which enable and facilitate the integration of the construction process in the context of the country concerned.

  Many countries, mainly industrialised ones, have taken action to ensure that their construction industries adopt materials, techniques and practices which result in operations and products which have a lower environmental impact. The developing countries can derive useful lessons from these measuresThe environmental problems of the developing countries exist side-by-side with a lack of the managerial experience, financial resources, and legal and administrative systems necessary to deal with the issue through public and formal education, formulation and enforcement of “command and control” measures (legislation and regulations), as well as the devising and implementation of “economic instruments” (incentives – grants, subsidies – and taxes). This includes, government action, market forces, institutional initiatives and operational environment.