There is an obvious need for change and improvement to combat intense competition within the industry and improve margins under pressure.
Innovation is not a word commonly associated with the Construction industry of recent times. Comments abound such as “Construction is a laggard when it comes to innovation….” in “Thinking like Manufacturers” by Michael Bleby in the Australian Financial Review on 9th October 2014. In this article it is suggested that innovative ideas for the construction industry will need to be drawn from outside the industry, for instance from manufacturing (with examples described in modular construction and the application of 3D printing techniques to create wax moulds for precast concrete) and information technology (citing Building Information Management or BIM systems).
But why should this be so? There is an obvious need for change and improvement to combat intense competition within the industry and improve margins under pressure, particularly in relation to major infrastructure and resources projects in Australia. Note for instance: “Australia’s construction costs rose rapidly and notably compared to other costs in the past decade. The persistence of higher costs – particularly wages – in the face of waning demand, will act as a barrier to infrastructure and resources projects in the pipeline going ahead.” – Deloitte Access Economics for the Australian Constructors Association, March 2014. The best way to sustainably improve business costs and consequently the competitive position of a company is through innovation based productivity improvements. As the market turns and hesitant, uneven recovery gathers strength there will be opportunities for companies who have invested in capability and who have learnt the skills of innovation to chase and gain market share.
There is no shortage of opportunities for innovation in construction businesses in areas such as:
- Design for improved maintainability / durability / reliability / sustainability;
- Application of alternative materials with superior attributes / reduced cost / reduced environmental footprint encompassing disposal;
- Modular construction techniques including temporary formwork; and/or
- Use of technology for data collation and / or sharing as well as process management, analysis and reporting.
For additional inspiration, one need look no further than the BRITE Innovation Gallery 2007 prepared by the BRITE Project, under the auspices of the Cooperative Research Centre (CRC) for Construction Innovation. In this document the following examples are outlined (let me know if you would like a copy of the document):
- An airconditioning system that lifted the green rating of a 1980s building;
- Prefabrication of townhouse upper storeys which eliminated OH&S risks;
- A bridge fabricated with modular precast sections to reap time savings;
- Strong human resource investment with a consequent pay off for a mid-sized contractor;
- A project alliance that facilitated the efficient delivery of a complex bridge with zero lost-time injuries;
- An infrastructure project completed six months ahead of schedule thanks to a project alliance;
- Materials innovation and relationship management which improved project outcomes;
- Patented technology which produced quality reinforcement cages for civil construction; and
- Tight construction scheduling which enabled a bridge replacement with minimum disruption.
Small and medium businesses looking for innovation related support can turn to the AusIndustry Entrepreneurs’ Infrastructure Programme, as a part of the Commonwealth Government’s Industry Innovation and Competitiveness Agenda and the flagship initiative for business competitiveness and productivity. The Entrepreneurs’ Infrastructure Programme offers support to businesses through three elements:
- Business Management, providing support for business improvement and growth;
- Research Connections, helping small and medium businesses collaborate with the research sector to develop new ideas with commercial potential; and
- Accelerating Commercialisation, helping entrepreneurs, researchers, start-ups and businesses address key challenges in the commercialisation pathway of bringing novel products, processes and service to the market.
Support for businesses includes co-funded grants to commercialise new products, processes and services and funding to advantage of growth opportunities.
An important feature of the “Accelerating Commercialisation” element is the construction of a portfolio of Australian businesses that are undertaking early stage commercialisation activities. The portfolio brings qualified early stage commercialisation opportunities together in one place so that they are visible to investors, other entrepreneurs, domain experts, supply chains and strategic corporations. Of the more than 500 businesses already qualified members of the portfolio, 54 are in the Infrastructure and Building market. Is this sufficient representation for the construction industry?
Has this article been helpful? Please comment below or send me an email. I am always excited to hear from people making it happen!
BE (Mech), MBA