Engineering International, Volume 6, No. 2 (2018) ISSN 2409-3629 Asian Business Consortium | EI Page 79 Implications of Industrialized Building System on Labor Demand and Cost Yong Chen-Chen 1* , Rusmawati Said 2 , Candy Gan Chin Yee 3 1,3 Faculty of Economics & Administration, University of Malaya, 50603 Kuala Lumpur, MALAYSIA 2 Faculty of Economics and Management, Universiti Putra Malaysia, 43300 Serdang, Selangor, MALAYSIA * Corresponding Contact: Email: ccyong@um.edu.my ABSTRACT High dependence on foreign workers in the construction industry has been long known to be one of the contributing factors of labor demand issue. To address this problem, the implementation of new technology innovations, such as the Industrialized Building System (IBS) is suggested. The purpose of this research paper is to identify the implication of IBS on the labor requirement of the construction industry. In this paper, the authors used the survey-questionnaire method. The research involved data from the surveys completed by the contractors registered with the CIDB. Data Envelopment Analysis (DEA) has been applied, and the reliability of the DEA result has also been proved. The result obtained from the Data Envelopment Analysis (DEA), indicates that IBS contractors are still required to hire an unskilled worker to undergo the new technology transition. However, when the adoption rate of IBS gets higher, the issue of substantial influx and dependency on a foreign worker in the construction industry can be resolved gradually. Although the investment cost is high during the initial stage, IBS can help to reduce the construction cost in the long-term. Key words: IBS, Labor, Construction Industry, DEA INTRODUCTION Construction industry makes up a significant part of the Malaysia economy. There are numerous industries inter-connected to it, such as basic metal products and electrical machinery. The Construction industry is essential for the country’s revenue contribution, capital formation, and employment. As a result, this industry helps to bolster the gross domestic product (GDP) of the country. Likewise, the Construction sector also contributes to the national economic development significantly by generating more employment opportunities for both skilled and unskilled labor. Therefore, it subsequently boosts the GDP and socio-economic development of human life in the country. 12/27/2018 Source of Support: None, NoConflict of Interest: Declared This article is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License. Attribution-NonCommercial (CC BY-NC) license lets others remix, tweak, and build upon work non-commercially, and although the new works must also acknowledge & be non-commercial.