Australia has opportunities to unlock social, economic and environmental value by supporting a greater uptake of prefabrication and smart buildings, a new report argues.

At its Offsite conference hosted in Melbourne last month, prefabrication industry advocacy group PrefabAUS launched a 10-year roadmap which aims to guide ongoing development of the prefabrication and smart building industry over the decade to 2033.

The roadmap outlines 19 targets which the sector aims to achieve between now and 2033.

These include:

• Doubling the rate of penetration of smart buildings from 15 percent to 30 percent of new building construction.
• Increasing the penetration of prefabrication to cover 80 percent of all building elements which are included in new building construction.
• Demonstration of savings of at least 20 percent in terms of construction cost, production, and lifecycle cost for smart, prefabricated buildings. Also, demonstration of time savings of at least twelve weeks in new home construction over a twelve-month period for a conventional build along with 50-80 percent reductions in waste and embodied carbon.
• Commencement of production of 10-star energy-rated buildings and homes through smart building and prefabrication.

The roadmap was launched by Damien Crough, founding director of PrefabAUS and managing director of Advanced Offsite Group along with Lance Worrall, a leading analyst and author of several papers on industrial policy and economic development.

According to Worrall, the roadmap comes as Australia suffers at a broad level from a low level of industrialisation. This, he says, leaves us dependent on resource extraction and locked into commodities – some for which use will decline as international economies move toward decarbonisation.

At the same time, the nation has opportunities for reindustrialisation that are linked to both renewable energy resources and the metals and minerals which are needed for a new economy.

Moreover, Worrall says that Australia is making tentative steps toward reindustrialisation through measures such as the National Reconstruction Fund.  Whilst smart building is not referred to in the fund, several sectors which have been nominated as priority through the fund have connections with prefabrication.

Speaking particularly about smart building and prefab, Worrell and Crough say that Australia has the right conditions to increase uptake in these areas. These include an unmet supply of building and housing demand, limited supply of skilled labour and a growing cohort of innovative businesses who are supplying quality solutions to the market.

However, uptake has been hindered by an industry model which is still geared toward on-site construction.

Accordingly, the roadmap estimates that prefabrication currently accounts for less than five percent of residential building in Australia. (Note: the exact penetration of prefabrication is difficult to determine as many buildings and homes that are constructed using traditional on-site construction methods include some materials and components which have been prefabricated.)

Going into greater depth, Worrell and Crough describe seven links which are critical within the smart building value chain.

These include planning and design; selection of inputs and materials; procurement and supply; production/manufacturing; on-site assembly; through life support systems (predictive maintenance etc.); and end-market conditions such as public procurement policies, building regulations, industry standards.

Speaking of the second link relating to product and material selection, Worrall and Clough say that Australia has opportunities to leverage mineral and renewable energy resources to cater for future market demand for products such as green aluminium and green steel. This is the case notwithstanding that current capacity and capabilities are limited in this area.

Regarding other links, however, Australia has deficiencies across several areas.

When it comes to production/manufacturing and assembly, for example, Australia’s efforts are fragmented, lacking in scale and lacking in digital take-up.

Also fragmented are our efforts to support smart buildings in operation.

Finally, Australia lags other developed economies when it comes to strategic public procurement to support a pipeline of work for smart buildings and prefabrication.

This is important as a robust system of advanced public procurement would help to drive scale, coordination and alignment among each of the links in the value chain.

Whilst these challenges are significant, Worrall and Crough say benefits of greater prefab and smart building uptake will be significant.

These include higher productivity, better quality, more affordable housing, lower carbon emissions, greater opportunities to deliver accessible building design and greater climate resilience.

To capitalise on these benefits, the roadmap calls for a national strategy to support the development of prefabrication and smart building.

Specifically, it calls for action on twelve recommendations. Each of these are overlapping and interdependent. They work together as part of a comprehensive strategy.

They include:

• Recognising the importance of smart building in government industrial policies. This includes embedding smart building goals in initiatives such as the National Reconstruction Fund and National Housing Policy.
• Creating a portfolio of projects that will enable the prefabrication and smart building industry to create scale and increase capacity. This should be done through advanced public procurement processes. These could include a presumption in favour of prefab on selected projects or targets/mandates on designated projects.
• Intensive application of smart building on specific large-scale projects such as the National Housing Accord and the Brisbane Olympics.
• Embedding Design for Manufacture and Assembly (DfMA) into projects.
• Use of advanced public procurement to improve the flow of funds for prefabrication
• Building consistent nationwide standards and better regulation.
• Creation of a national program to accelerate digital adoption of smart building to be delivered through a network of future factories that would form a national prefabrication hub.
• Promotion of business model innovation for the accelerated development of smart building.
• Working with unions, industry and training providers to build a future workforce which is equipped to handle digital offsite factory production. This would involve a trade certificate for prefabrication that would include digital skills.
• Building an ecosystem including research hubs and smart building industry clusters.
• Creation of flagship projects along with baselines and benchmarks through which benefits of smart buildings can be demonstrated. Specifically, this would include designating 10 projects as smart building national flagship projects.
• Shifting perceptions and creating an image of better outcomes through prefabrication in terms of performance, quality, safety and social and environmental outcomes.

The roadmap was developed following multiple rounds of workshops and industry engagement along with a series of research projects.

It will now be taken to key stakeholders.

Worrall and Clough say the importance of the roadmap should not be underestimated.

“If implemented as an integrated strategy, these measures will create a virtuous cycle of industry growth with benefits recognised across Australia’s economy, society and environment,” Worrall said.

Crough agrees.

“Australia’s smart building revolution will see transformation of our sector (prefabrication) over the decade,” he said.

“Our ambitious targets, our recommendations, our directions for concerted action all reflect this major change.

“Smart buildings will deliver immense buildings for Australia’s economy, society and environment if we apply leadership, focus, planning, partnerships and strategy to the task …”

“… This is a direction setting document for the decade to 2033 for the development of a whole new value adding industry for Australia.

“We will be taking this message on the road to the key decision makers and players – governments, industry, unions, the research and education sector and communities across Australia – whose active involvement and support will be critical for our success.

“We intend that Building the Future We Want (the roadmap title) will have a major impact upon policy and programs for the development of an Australian smart building sector.”

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