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Australia’s construction industry must unite around a cohesive strategy

Photo by Michael Boalch on Unsplash

I recently attended a conference in the UK that discussed future trends affecting the global construction industry, and what struck me was the stark lack of consensus, clarity and strategy we have in Australia around the future of our construction and engineering industry, compared with many other countries.


In particular, at the conference attended by academia, industry and government leaders I was struck by the considerable momentum building around Industry 4 (the fourth industrial revolution) and the related concept of Modern Construction or Construction 2 as it is sometimes called.

The Australian construction industry has an excellent reputation overseas, especially for the quality of its project management expertise. However, reform agendas overseas have for too long put Australia to shame, even if they often fail to result in significant changes to construction industry performance.

Nevertheless, a country is more likely to achieve reform if it has a clear plan than if it doesn’t and I fear that one day, in the not too distant future, we will turn around and wander how other construction industries have become so much more efficient and effective than ours.

The main driving themes in the current construction industry reform agendas in progressive regions and countries such as the UK, Scandinavia, Germany, Hong Kong and Singapore, revolve around the emerging concepts of pre-manufactured value, the mobilisation of digital and other technological advancements to drive supply chain integration and collaboration, great use of offsite production/prefabrication, and the value of vertically integrated firms that can work across the entire project life cycle from planning through design, construction and operations.

Whether you agree with this agenda or not, this clear vision is driving construction industry reform in these countries with numerous potential benefits being espoused including: increased efficiency, productivity and reliability; reduced skills shortages; improved safety and reduced waste and carbon emissions.

While the evidence to support these claims remains somewhat scant, it is accumulating fast and the human/technology interface and the societal implications of this trend are seen as particularly important elements of this emerging debate.

Impact of new technologies

Clearly, there is a significant political and human dimension to what is being envisaged for the future of construction, and policy-makers recognise they will fail to achieve their ambitious targets if they focus on the technologies alone without considering how it will affect people in the industry, the quantity and quality of jobs, its community interactions and more broadly, the quality of people’s lives, now and into the future.

In other words, progressive policy-makers are asking the question of what these new technologies are for, beyond just making the construction industry faster and cheaper.

One of the formative reports that is driving construction industry reform in these countries was produced by the World Economic Forum, titled Shaping the Future of Construction – A Breakthrough in Mindset and Technology. This report labelled the construction industry globally as lagging other sectors in technological development, major disruptive changes and efficiency gains. New materials and technologies it argued, would not only improve productivity and reduce project delays, but also enhance the quality of buildings and improve safety, working conditions and environmental compatibility. Digital technologies and Building Information Modelling (BIM) were seen to play a particularly important role  enabling communication, collaboration and integrating technologies across the supply chain and between firms that traditionally compete (coopetition).

The report also recognised that the industry needed to improve its reputation and legitimacy in the eyes of the public for reliability and quality, presenting itself as an employer-of-choice in the global war on talent.

It also needs to engage more constructively with local communities by means of participatory planning and design and ongoing community-involvement initiatives during construction and operations.

Finally, the report recognised the important role of government in construction industry transformation as both regulator and major client. In particular, it argued that governments should drive reform by demanding and incentivising innovation, simplifying and harmonizing building codes and standards, setting and enforcing time limits for construction permits and environmental approvals, and providing greater R&D support to academia and companies for collaboratively developing technological innovations in construction.

Addressing challenges

Turning specifically to the UK, the current construction industry strategy is described in the Industrial Strategy Construction Sector Deal, published in 2018 by the Construction Leadership Council in collaboration with government. The vision is of a construction sector that can build new homes in weeks, even days, that can deliver new buildings at a third of the cost and that can provide affordable, energy-efficient homes.

A transformed UK construction sector is envisaged as an industry that is more efficient and productive, more highly skilled and highly paid and which is ready to address the challenges of depleting natural resources and global warming, and is ready to grasp the opportunities of the growing global infrastructure market – which includes Australia. Critical to this vision is a commitment to cross-sector collaboration between government, industry, universities and community organisations.

It is also worth noting that the Construction Sector Deal is part of a wider UK government Industrial Strategy, which is based on promoting five foundations of greater productivity: innovation; quality jobs; infrastructure investment; a conducive business environment; and prosperous communities across the UK. These are all nice words, which bely the reality of life in many parts of the UK after years of economic austerity and a UK construction sector that is burdened with productivity that is historically below than the wider economy by an average of 21 per cent since 1975.

Nevertheless, the Construction Sector Deal is ambitious in its aims to increase apprenticeships to 25,000 a year by 2020; achieve a 33 per cent reduction in the cost of construction and the whole life cost of assets; produce a 50 per cent reduction in the time taken from inception to completion of new build; a 50 per cent reduction in greenhouse gas emissions in the built environment; and a 50 per cent reduction in the trade gap between total exports and total imports of construction products and materials.

These goals will be met by focusing on three strategic areas: greater use of digital technologies, offsite manufacturing, and whole life asset performance.

Addressing past problems

It is notable that the reforms being driven in the UK are being mirrored in other countries such as Singapore and Hong Kong.

Professor Martin Loosemore

Professor Martin Loosemore

For example, the Construction 2.0: Time to Change report published in 2018 in Hong Kong, documents a construction industry reform agenda that includes a HK$1 billion construction innovation and technology fund to promote innovation and investment in construction delivery.

The aim is to address a history of high construction costs; unsatisfactory mega-project performance; unsatisfactory site safety performance; declining construction productivity; and a relative lack of creativity and innovation compared to other economic sectors.

The Hong Kong construction industry will be reformed through a focus on three key pillars underpinned by achievable and measurable performance targets.

Pillar 1: Innovation: The development of an industry culture that embraces change, innovation and new technologies such as 5D BIM, digitisation, global positioning systems (GPS), drones, LiDAR remote sensing technology, Radio Frequency Identification (RFID), data analytics, augmented and virtual reality and robotics to drive forward productivity, efficiency and enhanced project delivery outcomes.

Pillar 2: Professionalisation: Improved professionalism of the industry through step change increases in project leadership, project management, procurement capabilities and professional skills and practices within government and the private sector, to deliver higher quality construction and built assets, combined with a first priority focus on safety, construction supervision and quality in the workplace.

Pillar 3: Revitalisation: Reinvigorating the appeal and benefits of joining the industry to attract and nurture growing numbers of young and energetic talent to the workforce and increasing the agility at the individual, organisational and Industry levels.

Admittedly, there is a long history of reform in the UK and in Hong Kong going back decades, which has failed to transform those construction industries. But at least they have a plan. In Australia we don’t. Despite some widely-admired procurement and safety reforms during the 1970s, 80s and 90s and more recent globally-recognised leadership in the development of project alliances, our recent history of construction industry reform is one of pitched battles between vested interest groups rather than one of cross-sector collaboration and collective responsibility to represent our industry on a global stage.

As the world of construction seeks to move forward around us, we don’t need more conflict and another purge. We need someone who can bring the different parts of the industry together around a plan; someone with a vision who can foster collaboration, build alliances and inspire everyone to envisage a collective identity and need for reform which differentiates us from our competitors, and which builds on the global reputation of our industry as a world leader.

Martin Loosemore is professor of construction management in the faculty of the Built Environment at the University of NSW, Sydney. He is a visiting professor at the University of Loughborough, UK, a Fellow of the Royal Institution of Chartered Surveyors, and a Fellow of the Chartered Institute of Building.


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Comments

One Response to “Australia’s construction industry must unite around a cohesive strategy”

  • timothy o'leary says:

    Hi Martin, interesting and informative read, thank you for sharing..

    The UK does appear to be trying to pull itself out of a hole that 25 years ago led to the Latham Report with its no less than 53 recommendations. Back then the buzzword was ‘Partnering’ and ‘Constructing the Team’ away from adversarial system , but that system hasn’t changed and Construction Law work is not diminishing any time soon

    It’s Very interesting to put a spotlight on the relative efficiency and innovation of the Australian Construction Industry relative to the countries mentioned in the article..

    some research for example the Australian Institutes’ 2014 report -Productivity in the Construction Industry)found that Australian “construction is a productive industry with a value added per worker above the average of all industries and well above the average, if extremely productive industries such as mining are excluded”

    and what sorts of buildings, well if you read articles including some on this website ( April 2019) Australia is smashing it out of the park in sustainability and the concern is more “How can Australian commercial real estate defend its number one rank for global sustainability?”

    As for having no plan, though limited in terms of reference the Shergold and Weir report has its own 24 recommendations which our Building Ministers have apparently committed to implementation..

    watching this space as always…

    regards Dr Timothy O’Leary, PhD, MRICS, M Arch Faculty of ABP, UoM

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