CN and Autodesk brought together leading figures for a second time to further explore what technology can do to mitigate threats and make the most of the opportunities presented by a globalised industry.
Calvin Blacker, Costain | Nick Boyle, Balfour Beatty | Rennie Chadwick, Osborne | Andrew Goldman, Rydon | Rupert Green, Lendlease | Martin Kelly, Severfield | Ian Borg Bellanti, Rise | Mark Ramessa, Morgan Sindall | Matthew Roche, ISG | Tom Smith, WSP | Sam Stacey, Skanska UK | Michael Stych, Arup | Dominic Thasarathar, Autodesk | Sam Wilamowski, Lendlease
Technology and globalisation are ungovernable tectonic plates for construction.
Capable of creating seismic market movements, they often herald judicious re-positioning – but can also open up chasms as well as new opportunities in the process.
In this second of two think tank debates, held in association with Autodesk, Construction News chaired a discussion that probed further into the risks and opportunities of globalisation and the role technology has to play.
Globalisation is resulting in a tide of project finance flowing in from distant shores. New entrants from countries such as China are taking financial roles in major projects such as Hinkley Point C and Manchester Airport.
But this tide also brings the need to plan for and adapt to an evolving marketplace. If UK businesses don’t keep up with these technology-driven change, savvy overseas competitors will be only too happy to take a slice of their market share.
How soon before robots are replacing the trades on sites? Should contractors and consultants re-invent themselves as tech firms or ‘integrators’ that orchestrate smart construction? And how might Pokémon Go and other ‘augmented reality’ innovations be adapted for use in the industry?
“Exciting and scary”
Increased access to world markets represented both an “exciting and scary” prospect, as Skanska UK director of innovation Sam Stacey put it. “We are going to see an explosion of opportunities,” he said.
“Even the most local clients want global expertise and we are driven by our clients; this is not a vanity thing”
Tom Smith, WSP
Entering international markets demands acclimatisation to business models, cultures, practices and laws. It also offers the chance to glean ideas through work with overseas collaborators via joint deals and ventures.
“Wherever we go, clients are now looking for global solutions,” said WSP global director of property and business Tom Smith. “Even the most local clients want global expertise and we are driven by our clients; this is not a vanity thing.”
The scope for UK firms to learn and collaborate with their counterparts abroad is considerable, even for those that don’t bid for work outside UK waters, others said.
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“We are a UK company but are still very interested in what is being developed abroad,” said Morgan Sindall supply chain director Mark Ramessa. “You realise just how great some schemes are from just a quick trip away. We can learn best practice from around the world, especially on the technology side.”
Mr Ramessa cited a novel collaboration in Hong Kong where a project joined forces with university students. “The solutions those students came up with were ground-breaking. But do we know about them in the UK?”
Balfour Beatty technical solutions director Nick Boyle said his firm had learned much from colleagues in France, where it has formed a strategic alliance with Vinci. “Globalisation makes the world smaller and has made it easier to access information,” he said.
“There is a greater globalisation opportunity but the complexity of trading on a global platform is increasing”
Matthew Roche, ISG
Construction could learn from many aspects of life and business in other countries, argued Autodesk strategist for construction Dominic Thasarathar. “We are particularly interested in the things that might not be obvious as [being] different systems, such as procurement, services and the way people live in cities.”
Worldwide trade combined with the connectivity of the internet also made it easier to find and attract recruits with “international flair”, as Ian Borg Bellanti, a senior consultant for consultancy Rise, pointed out. “The internet is an immeasurable source of globalisation in itself.”
But this access to trade and talent presented some serious challenges, many of the senior figures agreed. One obstacle global firms face concerns the laws of the lands where they trade – a challenge often swollen by project complexity.
ISG managing director of technology solutions Matthew Roche says his firm appointed a “head of global mobility” from outside the industry to keep tabs on its legal compliance.
“There is a greater globalisation opportunity but the complexity of trading on a global platform is increasing,” he told the debate. “You can spend a lot of money and very quickly become non-compliant. Our global compliance person advises us how to manage in those markets. There is a real need to do that now.”
Autodesk infographic hi-res
Culture as well as legal differences must be understood to gain and maintain a lead on competitors both at home and abroad, it was argued. “There is a know-how for collaborating across borders and cultures,” Skanska’s Mr Stacey said.
“The industry is going to change faster than it has in the past and we have to learn from different parts of the world and become nimble. Being nimble is normally associated with being small. But in this case it is about collaborating with other cultures.”
Several panellsts acknowledged that, at times, cultural barriers even had to be torn down within a business. “The internet can draw people from different cultures into your business,” said Lendlease senior QS Sam Wilamowski.
”The challenge for us is to learn how to harness the information we already have. This is a market and skillset that doesn’t really exist in the industry”
Michael Stych, Arup
“And with new opportunities constantly arising, there is always something different. So with globalisation we need to step beyond any boundaries and cultural boundaries and take a leap of faith.”
Firms must also flex their diplomatic skills when working alongside clients with different cultural expectations, WSP’s Mr Smith suggested. “We have to learn how to deal with developers culturally. They may want to procure things in a very different way to UK developers or believe they can circumnavigate planning. Understanding their culture can give you the competitive edge.”
New business models
Despite these challenges, globalisation gave access to plentiful investment, offering potentially bigger and longer-term profits.
As decades-long public sector deals such as PFIs have fallen out of favour in the UK, other countries offer opportunities to secure similar agreements that include fees for maintenance as well as capital construction. While such international tie-ups present their own challenges, longer-term contracts are one area where technology could help.
Osborne director of innovation and performance Rennie Chadwick said the exploration of new business models was “probably the most useful thing that we can do globally”. He added: “The traditional business model makes a small margin. If we want to make margins on the operating side you have to do something different.”
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Costain chief engineer Calvin Blacker said these long-term deals could help firms establish a reputation for quality. “When you have a 10-20-year [contract], you build so that it doesn’t fail; this drives different behaviours and this is where we become a more trusted brand.”
Mr Stacey said Skanska already applies its UK experience of PFI to long-term international deals, with technology driving new thinking in how to collect and use data. “We need to get better at dealing with data and there are important skills that can be drawn from different sources and countries,” he said. “People can now do some amazing things by drawing inferences from relatively small datasets.”
Morgan Sindall’s Mr Ramessa predicted “step-changes” in the way firms use large datasets to pinpoint the most efficient way to run buildings. But some raised concerns about the extra costs of securing and analysing relevant information from buildings.
According to Arup director Michael Stych, a significant amount of building data is already accessible with relative ease: “We just need to go back and analyse it.” If construction firms failed to exploit the data at their disposal, others would, he warned. And the competition might not always come from within the industry.
“The threat to us is that other people will come along and do it,” Mr Stych continued. “People already do harness data with smartphone applications. The challenge for us is to learn from those people how to harness the information we already have. This is a market and skillset that doesn’t really exist in the industry.”
Missed the first of these think tank debates? See what our expert panellists think will transform construction.
Severfield strategic business development director Martin Kelly said senior professionals like consultants and lawyers would take on the role of advising on construction technology if firms failed to do so. “They don’t have the capability that our industry has got on its side, but they have much more trust.”
“We can’t leave this to others,” Mr Stacey added. “We’ll miss a trick if we do.”
ISG’s Mr Roche believed construction firms have the skills to take the lead in construction technology. “Our industry seems slightly wary of technology,” he added. “But there are a lot of skills and professional talent in this industry that the technology industry doesn’t understand, so we can lead.”
The industry’s relative inexperience in tech raised some crucial questions: how much should firms invest in technology skills? Just how technological should they become? Several panellists sounded a note of caution about rushing to invest in emerging technologies.
“There are a lot of emerging markets that are moving faster and faster and leap-frogging others in terms of technology”
Andrew Goldman, Rydon
Mr Ramessa said he would resist recasting construction firms as technology companies. “We are still builders,” he added. WSP’s Mr Smith added that firms had to envisage how the construction market will be changed by technology. “Automated and connected buildings will change our cities,” he predicted. “How our cities will look in 20 to 25 years’ time will have a profound effect on our industry.”
Ignore the fads
Severfield’s Mr Kelly said an essential test of technology was whether any extra investment involved added value to projects. ISG’s Mr Roche said the big challenge was rooting out “fad” from reality. “You need realism in construction. What is a fad and what is here to stay? We have to be able to run our companies now and in the future.”
Several firms were already introducing new technology in their work – without too much effort in some cases. Dr Chadwick said it took his firm one afternoon to adapt the augmented reality technology used in the popular smartphone game Pokémon Go for a project. Instead of using the tech to project fantasy creatures into real-life space, Lendlease used it to demonstrate the end result of a project on site.
Lendlease technology lead Rupert Green pointed to the use of “additive reality” products by Microsoft that have the power to project designs in three dimensions as a hologram. “It allows everyone to see the same model, have the same level of input and talk about it all at the same time. It really breaks down the need for travel.”
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So how can construction firms survive in this frenzy of technological advances and as international competition proliferated? “There are a lot of emerging markets that are moving faster and faster and leap-frogging others in terms of technology,” Rydon group technology director Andrew Goldman said.
Mr Smith pointed to one way forward: “We have to be integrators or to be proper trusted advisers to help clients come up with solutions. It is becoming rarer to be able to deliver all the skills from one organisation.”
Costain’s Mr Blacker agreed: “We can hone those skills of being creative to join things together, help clients to envisage different futures and then futureproof their assets.”
Whatever the solution, most in the room agreed that standing still was not an option for construction firms looking to thrive amid major shifts in globalisation and technology.
“Other industries have had their revolutions,” Mr Stacey said, summing up the future challenge. “Our one is just kicking off.”