Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to the newest version of your browser.

Your browser appears to have cookies disabled. For the best experience of Construction News, please enable cookies in your browser.

Welcome to the Construction News site. As we have relaunched, you will have to sign in once now and agree for us to use cookies, so you won't need to log in each time you visit our site.
Learn more

Crouching tiger, hidden dragon

The twittering classes are in uproar this week, the RIBA has obtained a sponsor for its flagship Stirling Prize, and – shock, horror – it’s a Chinese firm calledCrystal CG

They do architectural visualisations. In fact, they have the contract for London 2012, so it’s not like they’re some tinpot rubbish outfit. They also have an office base in Hammersmith – enabled for them by Think London, the ‘locate in London’ agency. They are a big, decent outfit. So why the uproar?

The problem is, apparently, that they’re Chinese, and we don’t want them over here. Their service is cheap – cheaper than the UK firms in the same industry can manage to charge. And they’ve had the temerity to make their products pretty much as good as the UK based visualisation industry can manage.

They do this by paying their workers £2 an hour or less, according to reports. Isn’t that terrible? These upstart foreigners want to make money providing a good service paying local market rates to their workforce. Dreadful behaviour.

Just get yourself off your jingoistic high horse for a minute, and acknowledge that this is not an unusual story. Most of the textile manufacturing that the North West built its wealth on has long since shifted to South Asia. Mass production of cars and other engineered goods has moved to the far east. James Dyson manufactures his vacuum cleaners in Korea, or somewhere like that. I understand there’s even a plane that flies in from Johannesburg every day to Heathrow full of part-baked bread for London cafe’s.

It’s simple. If there is no sustainable competitive advantage in maintaining production in the UK, where labour is expensive, it will shift to a cheaper economy.

The worrying thing here is that this is happening in the ‘creative industries’. This is a sector of the economy that runs from basket weaving to advertising, taking in architecture and engineering consultancy along the way. We’re world leaders. Any self-respecting major regeneration masterplan has a ‘creative quarter’ in it, to house the huge growth in the sector that is in everyone’s economic forecast.

Indeed, I saw Dennis Turner this week, the Chief Economist from HSBC. He lamented the loss of our manufacturing industry, and championed the creative sector. In answer to the question “if you were in government, and you had a pound, would you give it to the (car) manufacturers, or to the creative industries?”, he opted for the furry, no-tie, luvvy brigade.

The rationale is thus: we can’t compete on process any more, our workers are just too expensive, we have to compete on something that the cheap places can’t duplicate, our creativity.  That will be a truly sustainable competitive advantage. There’s no point having a competitive advantage if you can’t sustain it – if the Chinese can copy your product or service and knock it out cheaper, you will be in trouble soon.

But here we are, in a creative industry, with those dashed Chinese taking the ground from under our feet. If it can happen there, it can happen elsewhere. Yes, our architects, and our structural and services engineers are top of the tree. But will they stay that way? Can the Chinese do what they do for less?

The answer is, of course yes they can. There are a host of Chinese workers at British architecture and engineering firms. At least some will take what they’ve learned home at some point and start practicing for themselves. Will they be more ‘creative’ than us? Maybe the Brits will have to up their game.

What you might learn from this is that a competitive advantage is not a static or given thing. You may have one now, but you will need to work to extend that advantage into the future, or your competition will begin to catch you up. Don’t relax onto the laurels of your ‘creativity’, the Chinese can be creative too.

Have your say

You must sign in to make a comment.

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Links may be included in your comments but HTML is not permitted.