09 Aug 2018
Not only do Grenfell and the demise of Carillion bring the UK recurring challenges to the sector, but globalisation and technological change threaten seismic changes.
The industry inherently knows this but harmonising fragmented and widely different perspectives from key stakeholders seems as far away as ever.
At the same time, some of the technological developments and opportunities to learn from other industries (like digitisation and modern methods of construction) and some of the changes proposed in the Construction Sector Deal offer huge potential for addressing these problems – but will they be enough?
RICS wants to facilitate truly wide and insightful debate in this area. We therefore organised a Built Environment Leaders Forum in Parliament Square on Friday 20 July to discuss these matters. The objective was to gain and share insight that will provide thought leadership in the sector and guide the development of standards.
The debating proposition:
Digitization and industrialization are just the latest construction industry management panaceas: what is really needed is structural transformation of the industry including new concepts of being a client, professionalism and contracting.
In support of the proposition, the following key points were made:
- Structural transformation demands client-driven change;
- We should re-focus on outcomes and value around commercial engagement;
- Structural transformation must precede digitisation to enable the full benefits of technology to be achieved;
- New business models are already emerging that provide design, construction, operation and maintenance, thus achieving integration with a firm, rather than between firms; and
- The large number of contractual interfaces in typical supply chains is what lies at the heart of the reported industry-wide problems. We need to reduce the number of interfaces, rather than coming up with more techniques that merely seek to cope with them. New processes are required that remove (not just overcome) contractual boundaries.
Opposing the proposition, it was initially argued:
- Research and development investment is badly needed in a low margin industry and digitisation and industrialization offer channels for this investment;
- We need Integration of digital and industrialisation rather than a fragmented evolution;
- We need to set leadership expectations of digital and industrialisation first; and
- Regarding transformation, it was doubted whether the industry can move faster than its clients and its environment.
In summary, there was broad consensus that there is a need for change. In some ways the debate centred around whether structure should follow industrial strategy in the sector, or vice versa. Who should lead the change? Does the market need ‘nudging’ and how would this be done? Is the industry capable of structural transformation? How will micro and SME businesses engage with this change? What new business models need to emerge to change behaviours?
In terms of professional development, there was no doubt that we need new minds with new thinking. As well as better developed soft skills to enable better management and integration, there was a need for recognition of a longer tail of specialisms to cover the challenges of new technology and industrialisation.
RICS intend to facilitate further debate on these key themes and develop collaborative standards where required. Meanwhile, we would like to know your reaction to this debate. Please email us your comments.
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