We are living through an unprecedented period of change that has had a profound affect, not only on our personal lives and routines, but also on every industry sector – none more so than construction.
The UK Government is now moving into recovery mode and a key component to their COVID-19 strategy is a commitment to focus on the construction industry to help revive the economy.
Restoring and increasing levels of construction activity will help significantly in driving the national economic recovery and companies will need to be innovative in their approaches. Some, much needed good news for the sector it seems, but how will this strategy be brought to reality?
In this third and final instalment of our three-part blog series we’ll explore the UK’s Construction Leadership Council (CLC) COVID-19 task force plans, which outline a post-COVID revival of the sector. The CLC’s three-pronged plan – restart, reset and reinvent – outlines where companies in the sector need to focus their efforts.
The third phase – referred to as the reinvent phase, looks at how the industry needs to transform rapidly focusing on embedding net zero targets in infrastructure projects and on partnerships that foster collaboration. The CLC believes their plan will ultimately deliver a more sustainable, professional, productive and profitable sector. The added benefit will be improved value for clients, better performing infrastructure and buildings, and a sector that’s competing successfully, not only nationally, but also in global terms.
Transforming the industry
Sectors like retail and manufacturing are looking inwardly and rapidly reinventing themselves. This level and speed of change is foreign to the construction industry, which is still slow in adapting and implementing change. Global labour-productivity growth in construction has averaged only 1 percent a year over the past two decades, compared with growth of 2.8 percent for the world economy. There’s still a long way to go to transform the industry into a stealthy forward-thinking and agile sector, but there is a natural place to start. By looking at how data can be harnessed for improved insights and improving the way data is collected, analysed and shared, the sector can enable smarter decisions, increase transparency, and improve predictability on infrastructure programmes.
The CLC urge the sector to not only use technology and data for improved outcomes but also to look at how focusing on embedding net zero targets in infrastructure projects will provide better quality outcomes. Often compared to the space race of the 1960s, reaching net zero will require extraordinary effort and collaboration between businesses, government and society. For the construction industry, this will require radical transformation from all involved, working collaboratively to foster better partnerships and outcomes that focus on value.
The World Green Building Council reports that almost 40 percent of greenhouse emissions come from buildings. However, by powering those structures with renewable energy, a significant reduction of worldwide emissions would be achieved. To successfully embed net zero targets in major infrastructure projects, construction firms will need to look at the energy and heat performance of buildings by using positive energy design and construction methods. Read our top tips for getting on track for Net-Zero Buildings by 2030 here.
Value and partnerships
When it comes to collaboration, the industry needs to focus on business and procurement models that deliver better outcomes for the whole lifecycle performance of an asset. As outlined above, better use of data and technology can support firms in providing improved certainty in terms of cost, schedule and asset performance. But firms cannot do this alone. The industry is renowned for working in silos, often with competing priorities and interests on projects, so a major shift in mindset and behaviour is needed.
There’s no doubt that increasing collaboration leads to better project outcomes, more efficient delivery of schemes and improved business performance. It will also create a culture that drives innovation and a solutions-focused mindset. However, truly collaborative partnerships will only form when the business and commercial models incentivise firms to do so. A key element to this involves sharing risk and reward. Replacing ‘fixed’ price schemes and incentive target costs with a model that is often referred to as having a shared pain/gain element will level the playing field on major projects. All firms involved need to have an equal interest in delivering the same outcomes on a project and sharing risk can support this as well as lead to innovation.
The change needed across the industry is not simple nor can it happen overnight. The CLC’s plan is seen as a catalyst for true change and an overhaul of the way the industry operates, and the business models it uses. Behavioural change and true collaboration will open the door to transformational growth and with that comes great opportunity.