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We all know that the Australian construction industry’s efficiency in delivering our much needed infrastructure is absolutely central to Australia’s future economic prosperity.

Since the Australian construction industry directly employs over 1.1 million people and since every $1 million invested creates about nine jobs in the construction industry and 37 jobs in the economy as a whole, it is also critical to Australia’s social fabric and well-being.

Outside Australia, with the global construction industry predicted to grow by 85 per cent to $15.5 trillion by 2030 (57 per cent of this in China, India and the US), the construction industry also represents an enormous potential economic opportunity for Australia in the export of construction products and management services growth in an increasingly global construction market.

Recognising the importance of construction to their economies and the immense opportunities presented by the global construction market, other countries have developed clear strategies to enable their construction industries to compete in the global construction race. Yet, other than a long-term pre-occupation with industrial relations reform which has left our industry bitterly divided and distracted, the Australian construction industry has no clear strategy to take advantage of these enormous opportunities, despite being recently labelled as one of the world’s most efficient construction industries (see Reinventing construction: A route to higher productivity produced by McKinsey’s Global Institute).

The UK for example, has its ‘Construction 2025’ strategy which is a partnership between industry and government to transform the construction industry, setting ambitious targets to achieve:

  • A 33 per cent reduction in both the initial cost of construction and the whole life cost of assets.
  • A 50 per cent reduction in the overall time from inception to completion for new build and refurbished assets
  • A 50 per cent reduction in greenhouse gas emissions in the built environment
  • A 50 per cent reduction in the trade gap between total exports and total imports for construction products and materials

Granted, the UK’s attempts to achieve such ambitious targets in the past may have failed to deliver the improvements they sought. But at least they have some clear leadership and vision of where they want their construction industry to go, which has mobilised a palpable sense of engagement and momentum towards improvement which we don’t have in Australia.

The UK has a clear and simple vision of where UK construction will be in 2025, which is articulated under five main areas:

  1. People - An industry with a positive image that is known for its talented and diverse workforce which is able to compete with other industries by recruiting, retaining and developing skilled, hard-working people in sufficient numbers to meet the increasing demand for construction.
  2. Smart - An industry that is efficient and technologically advanced and which is underpinned by a world-class science and research base that supports the development of innovative solutions in a number of priority areas such as smart construction, green construction and digital design.
  3. Sustainable - An industry that leads the world in low-carbon and green construction exports, driven by an efficient and low waste industry with environmental considerations at its core.
  4. Growth - An industry that drives growth across the entire economy with a strategic approach to global trade and an ambition to considerably expand its share of global export markets in response to new export opportunities afforded by global population growth and urbanisation.
  5. Leadership - An industry with clear leadership from a Construction Leadership Council to ensure that the commitments set out in its strategy are collectively delivered by all industry stakeholders to the benefit of workers and companies.

Nearer to home, Singapore (a significantly less efficient industry than Australia’s) also has a clear vision for the future of its construction industry which focusses on the adoption of digital and modular construction techniques and a ramping up of labour productivity through a recently released ‘Construction Productivity Roadmap’. This Road Map has many elements which include a Construction Productivity and Capability Fund which helps firms adopt new technology and develop their workforces, a new Government Academy that trains the workforce to be more productive  and an R&D strategy to lift productivity through technologies such as DfMA, robotics and 3D printing. Besides the R&D roadmap, the government is also exploring stipulating productivity targets as a requirement in future tenders and intends to create a bigger market these technologies through public sector projects.

To build our future and to have a stake in building the future of other developing countries, everyone with a stake in the future of Australia’s construction industry needs to come together, put the past behind them, and start working on a strategy to identify and capitalise on our significant competitive advantages.

 
  • Martin, the challenge for us all is to point out construction enterprises that are making the change and explain why, and what their new customer proposition is versus the rest. The reality is that the first movers will set the pace from here on. Government has no real role to play other than to understand what a better value proposition is, and to start looking for them. The reality is that Australian construction is only 2% of total global construction activity. This probably means that 98% of future construction jobs will not be in Australia. That is a pretty safe bet as more and more construction fabrication moves off-site, and as it appears of-shore. Do the maths, if 60% of all construction progress payments need to be made for construction value add off-site (which I expect to occur within 5 – 7 years) how much leakage will depart our shores. Companies like Strongbuild and Hickory are showing that you do not need the whole industry to change first before they change. They see the rest of the industry's slowness as an opportunity. The challenge for industry associations is that they need to defend a standing membership, as a result the status quo and the lowest common denominator organisations. They will soon be seeing shrinking membership, as members fail because they were too slow to move. That's a good thing as the future of construction will be in new smart enterprises most of whom are yet to start-up. They will be able, smart and not have the baggage that holds the slow movers back.

  • David,
    I would argue that government authorities and agencies have a very large role in setting the pace for productivity in the construction sector. This is because, in most cases, the authorities set the regulations and specifications for the construction industry, not professional organisations. Government authorities provide not just the outcomes, but detailed design for construction, on which construction contractors bid to win. These processes and mechanisms of delivering infrastructure do nothing to encourage productivity, innovation or sustainability.
    Government agencies are often considered as the custodians of the public funds with inherent aversion to risk and anything new, or out of the ordinary. Approvals for change is therefore understandably slow, and without any method for reward or recognition there is little incentive for change.
    Contractors know this well and many have adopted a strategy to" provide only for the customer's wants"; winning work at the lowest price by alternative means.
    In this regulated industry, Government sets the pace….hopefully it quickens!

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