So You Want to be a Constructor in 2015?

Friday, March 27th, 2015
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Over the next few months I estimate that over 1 million new constructors will commence their careers in countries around the Pacific Rim.

While there is little hard data on all of this, I would guess that more than 100,000 new construction enterprises could also start up around the Pacific Rim this year. Of those businesses, it would be reasonable to expect that only 50 per cent will survive longer than 10 years. Collectively, this will have involved a huge personal and financial investment by individual constructors and those entrepreneurs who will launch their construction futures in 2015.

While no one would expect eager young constructors entering a wide variety of technical colleges and universities across Australia to have a business plan to map where they anticipate their careers should take them in five and 10 years from now, it would be reasonable to expect that some may have weighed up their prospects in this context. No one will have perfect vision into the future but there is certainly a benefit to be gained from anticipating the range of scenarios that may unfold.

By 2025, those who started construction careers in 2015 will be at least five years post-graduation. They will have experienced considerable change in the industry over that time. They will also have observed how unprepared most are for those changes let alone the rate of those changes.

By 2025, annual global construction turnover is forecast to exceed US $25 trillion. It is expected that 60 per cent of global construction activity will occur around the Asia Pacific rim, virtually at our front door. By then Australian and New Zealand construction turnover is forecast to be only US $300 billion.

The United States and China will account for the major share of our immediate market while the developing economies of India and Indonesia accelerate their share of the global construction pie. These economies will not have achieved these positions by accepting the status quo of construction as it may exist in their domestic markets today.

Countries like Malaysia, Singapore, South Korea, New Zealand and the Philippines will project their future market shares through carefully managed national strategies which embrace the concurrent industrialisation and globalisation forces now redefining how construction is planned for, procured, delivered, assembled and accepted.

The European Community has been a leader in construction innovation, new materials development and supply chain integration for several decades now. Germany remains at the forefront of these developments and it is not unusual for Asian competitors to assert strategies which aspire to “German quality at Chinese prices.” That is the new reality for us all. These forces have defined almost every industry around the world – be it motor vehicles, computers, telecommunications, cameras or medical equipment. Quality is going up and prices are coming down.

Tomorrow’s construction leaders will have sensed change and developed strategies for success in this expanding industry while others slumber. They will need to be well prepared and bold.

Australia’s construction industry remains in a state of denial with an unfounded belief that construction “down under” is efficient and reliable and still represents value for money. There are a lot of stakeholders in the status quo, and new constructors will meet these players early in their careers. It is this resistance to change that will open up exciting new opportunities for the game changers of tomorrow. Fundamental to tapping into those opportunities will be the depth of construction knowledge and experience that new constructors will commit to acquiring in the next few years.

I have been a careful observer and construction practitioner for over 40 years. I have had the privilege of starting “on the tools” as they say, obtaining university qualifications, working at all levels of the industry, learning from every experience, managing amazing projects, starting and running businesses around the Pacific Rim, advising government and taking on senior corporate roles in the public and private sectors. These insights shape what I would like to share with starting out constructors and new construction entrepreneurs. I will aim to place these insights into the context of how I see construction playing out in Australia and our region over the next 10 years.

To start with, here are some of the major themes that I feel will redefine construction:

  • Real integration of computer technologies (including robotics) with a focus on design for manufacture and assembly. This is much more than BIM, it’s an end to end approach,
  • Up to 60 per cent of traditional design effort becoming a free good as developed details and specifications are refined and carry forward from project to project and across markets,
  • A radical rewriting of traditional construction contracts to minimise avoidable risk transfer, to embrace the changing relationships of off-site (and off-shore) and the superintendence of work, the adoption of automatic payment for the major supply chain inputs so they coincide with the payment from client to head contractor, incorporation of extended construction warranty options and multi-jurisdictional construction standards and certifications,
  • At least a 30 per cent shift of current trade-based fabrication on site to off-site,
  • Repackaging of construction work with a focus on elemental assemblies to achieve a 50 per cent reduction in on-site project durations and waste,
  • Amazing new construction materials and a rethink of construction “givens” such as the roles timber and plastics will claim as equals to traditional uses of concrete, steel and masonry,
  • Redefinition of construction careers to match changing work methods on and off site,
  • Real-time gathering of construction performance data to inform a continuous productivity improvement loop that benchmarks with peers to drive innovations and competitiveness,
  • A new disruptive construction enterprise which integrates expertise and shares back of house capabilities to leverage combined purchasing power under a single franchised brand,
  • 24/7 construction using quiet construction methods to reduce expensive on-site overhead expenses, to lower the impact of construction materials movement during city peak hours and the impact of construction project  durations on their immediate neighbourhoods,
  • Multi-lingual construction organisations that apply superior networking abilities to access and deliver the best client solutions and repeat career opportunities around the Pacific Rim,
  • Construction better, faster, smarter and cheaper – as in, at least 20 per cent cheaper.

These perspectives will be further explored in a series of related articles to promote a different construction future to that currently portrayed by those who genuinely defend today’s customs and practices as optimal. These conversations will aim to join a few dots in the construction future for:

  • Those entering technical colleges and universities in 2015,
  • Those intending to start new construction related enterprises, and
  • Preparing those businesses to later attract new investment capital.

Most importantly, these articles are specifically addressed to those who will start their construction careers this year. Construction is a rewarding career which offers in return as much to those who want to become its earnest practitioners are prepared to put in. Over the next 20 years the constructor class of 2015 will be involved in many nation and community building projects. Irrespective of their scale, each is important and offers a unique opportunity to benchmark where each constructor’s career is at, and the opportunity to apply the latest best practices.

That said, constructors have the obligation to ensure every built project not only aspires to their own personal standards but also satisfies the community’s belief that the built environment in which they have invested and occupy is safe and fit for purpose. Constructors should be mindful that construction is about building things that have useful life spans of many years – some decades, some centuries. The test of time is therefore an enduring consideration that surpasses initial completion.

For those who start enterprises, the challenges and rewards will also reflect the quality of inputs. These constructors’ responsibilities will span multiple clients and buildings, direct employees and their supply chains.

Those who embark on leading new construction enterprises will be the at the forefront of how construction innovation and new practices will unfold. They will drive new applications in technology, materials, on-site assembly, quality and safety management. They will be the leaders of industry and in shaping public policy not only domestically but across the region.

These are truly exciting times.

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