If members of the public were asked for an image that comes to mind when they think of the construction industry most would probably say ‘men standing around digging holes’. It’s not seen as a cutting-edge industry. When it comes to profits it’s very much the poor relation of the property development industry – Bob the Builder doesn’t drive a Bentley! The industry has a challenge on its hands – and speakers at the Construction Industry Summit last week were quick to agree that it’s a sector in need of fresh thinking.
A cathartic moment
Again and again we heard voices from across the conference challenge those present to confront fundamental and pressing issues – low productivity, ageing workforce, lack of diversity, and poor image. Peter Hansford (Government Chief Construction Advisor) and subsequent speakers stated that innovation was the key to unlocking the solutions to these challenges and I couldn’t agree more. This theme ran through the conference and was a cathartic moment as the industry threw down the gauntlet to itself. My opinion along with many in the room, was that change can’t come soon enough.
Turning the supertanker around
We heard how all these troubles weigh down on profitability. The construction industry is becoming a 1% margin business – up there with airlines and tyre manufacturers. While growth in the sector is up (projected to be 21.7% from 2015-2019, worth an extra £26.9 billion to the UK economy), margins are down, and there are concerns the best talent is looking elsewhere. One thing’s for sure – costs need to come down – the industry needs to achieve the same quality for less or projects face delay in being signed off. So what can be done to turn the supertanker around, we were asked? Are the predictions of a vicious circle of skills shortages and low productivity as dire as some say? And how do you solve the conundrum of an industry in desperate need of new ideas yet short of the money to invest?
The heart of the struggle
Clearly, there are no easy answers, but all of this was addressed in the session led by Kevin Baughan, Director of Innovation and Technology at Innovate UK called Growth through Innovation, where panellists got right to the heart of the struggle. Presenters showcased advancements on digitally enabled methods of design, manufacturing and assembly, articulated methods of optimising BIM for use on site, and talked about the increasing use of data mining and exchanging a vast range of data sources. But beyond that, they all had something in common. They agreed the industry has to buy-in to a common strategy around implementation and standardisation, just like all the other industries that are leaving construction behind.
Adam Locke, Partnership and Innovation Leader, Engineering Excellence Group, Laing O’Rourke, talked about how important it was to try to change the sector to accept new ideas when you bring them in. He said that it takes 10 years to change an industry behaviour, and they were about five years in with digitised design structures and digitised prototypes. The industry was changing, but it could do so faster. For our part, some £6 million of the £13m funding Innovate UK has committed to the industry in the last year is dedicated towards digitising the construction delivery process, helping companies integrate new technologies. Like Adam, I believe that to maximise the impact of this the industry needs to look to other successful precedents like aerospace, or risk missing out.
Reflecting societal moves
Justin Anderson, Chairman and CEO, Flexeye, said that the industry needed to get to grips with how it would tackle societal pressures. By 2050, the UK would have the biggest population in Western Europe, 77million, the equivalent of another London, Scotland and Manchester, and the industry needed to demonstrate it could deploy innovation to solve some of these massive challenges. This reflected what Kevin said to open the session – we needed to understand the dynamics of technology and people and be on the right side of trends to be truly relevant.
Need for culture change
Peter Trebilock, Design and BIM Programme Director at Balfour Beatty, said that progress was tied up in better capturing data, and using analytics to get leaner, but that it was also fundamentally about culture. He said he had asked a guy from McLaren how many changes they made to car in a week. The guy answered “around 370”. The point I took from this is that the industry needs to learn from disruptive and creative and digital industries, and it needs a culture of change.
This was a conference where the industry asked itself some tough questions, and I think in our session we came close to finding some answers. They may not have been easy to hear, but ultimately, if the industry lets disruption in, it can build a bright future with a better bottom line and one that will have a new and diverse workforce waiting to come on in. Two of our next funding rounds, built around the subjects of materials for demanding environments and cities integrated by design, show how Innovate UK will be continuing with that revolution.
Take a look at our success story about Q-Bot, who also attended the Construction Industry Summit.
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