1.1 Background and context
Despite the impact of the Great Recession the construction industry1 remains a vital and important part of the UK economy. For example, in 2014 construction contributed Ā£103 billion in economic output, which is 6.6% of the total UK output, and 2.1 million jobs, or 6.2% of total jobs in 2015 (Rhodes, 2015). Recent research (GCP Global & Oxford Economics, 2015) suggests that the importance of the construction industry globally is set to grow by 85% to $15.5 trillion by 2030, with three countries (China, the USA and India) leading the way and accounting for 57% of all global growth. Continued high levels of investment are also expected to contribute to a growing built asset value globally. In 2012, the combined stock of built asset wealth in the 30 largest economies totalled $193 trillion, and this is set to grow to $261 trillion by 2022 at a rate of 35% in real terms, with 30ā40% of GDP attributable globally to built asset wealth (HM Government, 2015a). With continued growth in the UK operations and facilities management sector, and a growing smart cities market there is also considerable potential in the UK construction industry.
This provides rich opportunities for UK construction, with exports in construction contracting and design services growing fast and worth more than $3.5 billion in 2013 (Jermey, 2015). The UK also has a comparative advantage in several sectors, primarily engineering, architecture and lowācarbon environments, and over the last few years as part of the previous Construction 2025 strategy (HM Government, 2015b) the UK has placed the development of Level 2 building information modelling (BIM) programme centre stage as it aspires to develop the Digital Built Britain Level 3 platform for the 2020s (HM Government, 2015a).
Recent analysis in the Construction 2025 report (HM Government, 2015b) also confirmed this view of opportunities and growth, and highlighted the strengths of UK construction. In particular, the report focused on its key economic role and wider economic significance, the internalised UK supply chain accounting for some Ā£124 billion of intermediate consumption, the UKās worldāclass design skills in architectural design, civil engineering and sustainable construction, and low entry cost and low capital, which benefit small firms and promote competition in the sector. The more recent Government Construction Strategy 2016ā20 (Infrastructure Projects Authority, 2016) also builds on this analysis and reinforces the UK Governmentās commitment to procurement innovation, BIM, skills development and wholeālife sustainability. The opportunities in overseas markets are also clear as a result of rapid growth in BRIC markets, but also the continuing demand for lowācarbon construction. For example, green building is now about 25% of total global construction activity (Dodge Data and Analytics, 2016). We are also seeing the development of BIM in the UK and overseas, which is likely to improve productivity and lower costs because of improved information flow and greater collaboration.
Despite the continued focus on UK construction through reports such as Latham (1994), Egan (1998) and Wolstenholme (2009), there is a recurring tendency for the construction industry to be criticised for its lack of forward thinking, poor performance and lack of innovation (Fernie et al., 2006; Goodier, 2013). Indeed, the Construction 2025 report also highlighted supposed weaknesses in the sector, including the lack of sector integration in the supply chain and a reliance on subācontracting, which can often lead to a disconnection and fracturing between design and construction management, leading in turn to a lack of innovation (HM Government, 2015b). Generally, construction is perceived as having low levels of investment in research and development and new processes because of uncertain demand for new goods and limited collaboration. This lack of collaboration and limited knowledge sharing from previous projects, which are teamābased, often results from the breakāup of teams when projects are completed, and this therefore compounds a lack of technology transfer. Also, in the UK construction costs are relatively high in comparison with overseas competitors and this is driven by inefficient procurement and processes rather than material costs (HM Government, 2015b). This is also compounded by a frequent lack of access to finance, poor skills levels and a high degree of fragmentation relative to other sectors and other countries. Indeed, the Farrell Review of Architecture and the Built Environment (Farrell, 2014) also highlighted the fragmentation of policy making across the field and the skills challenges facing all built environment professionals.
Nor are these issues peculiar to the UK; to take the example of a typical building supply chain, there is typically fragmentation and nonāintegration, and even the largest players in the supply of buildings are relatively small by international standards, with such companies tending to be international rather than multinational (WBCSD, 2008; Green, 2011). There are also many stakeholders in the building supply chain with complex relationships between them, which can result in functional gaps and management discontinuities between the professional and trade responsibilities and the building delivery process. This creates āoperational islandsā, characterised by ineffective coāordination and poor communication (WBCSD, 2008).
It is perhaps surprising therefore that there have been relatively few forwardāthinking longāterm studies (30 years or more) which have attempted to examine and analyse how the role of the construction industry in the UK and internationally is shaping the built environment of the future (Chan and Cooper, 2011; Goodier, 2013). This is perhaps partly influenced by the reluctance within the industry to plan for the long term because of market volatility, but also a lack of perceived control over external organisational factors (Goodier, 2013). The UK construction industry, however, faces several key strategic challenges as it seeks to set out a longāterm vision (HM Government, 2015b).
- The emergence of smart construction and digital design: There is a growing convergence between different data sets and different technologies in the digital economy and through a focus on Digital Built Britain (HM Government, 2015a). For example, the growth of open data (i.e. data that can be freely used, shared and built on by anyone, anywhere, for any purpose) and big data (i.e. very large, complex and rapidly changing datasets), and the development of the Internet of Things (i.e. the network of physical objects ā devices, vehicles, buildings and other items embedded with electronics, software, sensors, and networks ā that enables these objects to collect and exchange data) are creating substantive opportunities for innovation. For example, the potential for embedding new technologies in buildings to create āintelligent assetsā, where the performance of a building and its components can be constantly monitored and so create more efficient asset management and facilities management (Ellen MacArthur Foundation, 2016). Understanding asset performance will be improved therefore during both const...
