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Farmer Review must now unleash an age of innovation

This week saw the government publish its official response to Mark Farmer’s Modernise or Die report.

Among the responses, a number tackled the industry’s approach to R&D and innovation.

Specifically around innovation, Mr Farmer recommended (among other things) that:

  • Industry, government and clients should expand on the work being done through the Construction Leadership Council’s business models work stream, to improve supply chain relationships and increase investment in R&D by changing commissioning trends.
  • Industry, government and clients should expand on the work being done through the CLC’s innovation work stream, to create an innovation programme, with a focus on residential construction.
  • If clients fail to act and adopt the above recommendations, the government should introduce a tax of no more than 0.5 per cent of a project’s total construction value in an attempt to alter behaviour. Clients would be able to avoid paying this by demonstrating how they are improving the industry – particularly around skills and innovation.

It’s clear that the government views the CLC as its conduit to the industry, particularly when it comes to meeting the challenges set out in Modernise or Die and shaping a role for construction in the much-talked-about industrial strategy.

The government’s response to the recommendations called for the CLC to continue its work in the business models and innovation work streams to develop better models of client commissioning, and it agreed that it is “important to monitor the sector’s innovation performance” by working with the CLC to developing common metrics that can be used in an industry dashboard.

The proposed tax on clients was, perhaps unsurprisingly, not supported, with the government worrying that it could damage developer confidence and increase costs in the short term.

Whatever your views on the tax, the other points are clearly promising in terms of fostering support for construction innovation.

But talk is cheap – how likely is this to produce substantial change?

The CLC recently held a Leaders’ Forum in Coventry to set out its plans, telling assembled industry figures that it is aiming for a sector deal that will not just transform how UK assets are designed and built, but how the whole-life asset performance can be optimised – with considerably more money now spent on asset management than new-build construction.

Securing the sector deal won’t happen overnight, but programmes like i3P in the infrastructure sector show that the wider industry is waking up to the challenge that is being set by government – and the more construction can demonstrate that it’s getting its act together, the more the government will listen and offer support.

One trade association director that I spoke to emphasised how the supply chain will need to be involved to really secure the necessary technological changes, with commercial levers like the use of project bank accounts a potentially useful way to encourage innovation and early supply chain involvement – as Mr Farmer recommended last year.

An innovation director at a major contractor summed it up to me, arguing that “everybody knows our industry is ripe for change”.

He said: “There’s more optimism than there’s been before that things could change. It remains to be seen, though, whether that actually results in things like procurement models changing.”

In a post-Grenfell environment, of course, anything the industry can say or do to show that it is forward-thinking, improving processes, and creating a safer and higher-quality built environment will surely be welcomed by government.

The Farmer Review identified a number of important ideas around innovation, and rightly identified that the industry has an urgent need to change the way it works if it wants to survive.

Now that we know the government is listening, the industry must not waste the opportunity.

This week in tech:

  • The House of Lords has announced that it will hold an enquiry on the “economic, ethical and social implications of artificial intelligence”. The rise of AI isn’t slowing down and will continue to affect more and more systems that we use every day – including in the construction industry.
  • Google Glass isn’t as dead as you might think – it has found a niche with new hardware focused on enterprise, as opposed to its former life as a consumer product. This is fertile ground that Microsoft’s HoloLens has begun to capitalise on already – and Google provided some examples of Glass being used in factory environments already.
  • Don’t miss our special report into digital construction, including: a new app that could revolutionise the delivery of accommodation for those with dementia; whether BIM can cut escalating costs on PFI projects; and why digital collaboration needs more talk and less tech.
  • Last week saw the winners of the Construction News Awards unveiled. Categories of interest in the tech space include Commercial Innovation of the Year, Company Innovation of the Year and BIM Excellence.
  • Following last week’s column, an in-depth look at PaveGen’s new installation in central London that generates electricity from people’s footsteps.

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