Financing construction R&D as a national asset

Construction is a national infrastructure asset — Andrew Eastwell.
The performance of the construction industry far exceeds its apparent investment in research and development. ANDREW EASTWELL shares his views on why — and how — construction research should be funded in the future for the benefit of the UK as a whole.Popular myth is that the construction sector of UK industry is reluctant to innovate, unwilling to invest in R&D and resistant to change. Constant repetition of this perceived wisdom is rife today, even from our sponsoring Department (Dti), which said about delivery of the Olympic village, ‘There are interesting questions about the readiness of the construction industry. There are opportunities for British business to do it, and innovation will be necessary if we are to have an Olympics site.’ (Mark Gibson, Financial Times, 26 October 2005). If we are so resistant to innovation, why is it that construction currently ranks eighth against 15 developed countries in productivity — better than energy and chemicals, financial services, post and telecoms and education? How did The Dome — one of the world’s iconic structures, come to be completed on time despite a crushing timetable and difficult procurement background? How does the UK rank second in the world in the export of design services in construction? Ability Our real success, the reason why we rank well in international competitiveness terms, lies unseen and unreported, but is embodied in our ability to create project teams capable of assembling a blinding array of skills, products and services to create new and often adventurous built-environment projects. Apart from the armed forces (ranked second in international productivity ranking), I can think of few other industries that operate in this way. So, what relationship does this have to R&D intensity and innovation? The answer lies in the ability (or lack of it) of companies to develop intellectual property (IP) that is of direct and unique benefit to the company paying for the research. Unfortunately in project-based construction, there is very little protectable IP that any one company can develop; the property rapidly diffuses into the culture of the project team, which will then disperse into new projects with new partners. Thus the process of research and innovation relies very much on altruism or organisation from a central source. Certainly there is altruism around in profusion. The huge voluntary support that makes institutions such as CIBSE, HVCA, ECA, FETA and BSRIA work is testimony to this, but this does not pay the bills for real, full-time objective research, the facilities needed nor the subsequent demonstration activity. Intellectual input BSRIA has never found difficulty in engaging with industry and using the voluntary intellectual input on its collaborative projects. It is the cash to pay for major investment such as test rigs that cannot be raised directly from companies. This is not meanness on the part of our partners, but their realism that there is no good payback on the investment. If there were, our larger, successful companies would have invested and reaped the benefit of the investment, and no longer languish in a market where the largest company has a share of less than 2% of the market. So who should organise and pay for the collective R&D that is undoubtedly needed to ensure that project teams have the best means to perform their job and the UK can remain or better, progress, up the international table of success? There have been previous suggestions that it should be the clients who should lead the innovation process. Whilst this may be true in specific areas, in general this is unlikely to hold good for most companies, whose expertise is in their own business not in the provision of buildings. Clients certainly have a crucial role in defining future needs and will undoubtedly both benefit from and ultimately pay for R&D aimed at meeting these needs, but it is hard to see how they can really run our own business development for us. Manufacturers have a key role to play and have historically been the most active in funding both product and application research — unsurprisingly since they then have intellectual property to exploit but, with the climate for manufacturing favouring the Far East, this is likely to be a diminishing pool from which UK construction can draw. We elect governments to manage society’s infrastructure — education, healthcare and defence — where it is inefficient to do so in anything other than in a national context. At its best this works where money is collected centrally (tax) but managed with high levels of local influence. I would argue that construction is a national infrastructure asset and should be treated in a similar manner to defence, with central funding of technology development based on the needs articulated by the users. That is one reason why defence ranks so high in productivity terms in UK — it can be leading edge. As long as the Government view of construction remains product-based, with funding mechanisms applied to it that fit product-based industries, the infrastructure of professional codes, design guidance, proof-of-concept demonstration and full engagement in international (not just CEN) standards activity will decline and with it our world ranking. It is time for a serious rethink here. Fabulous success Are we downhearted? No, we are not. Bob White, Chairman of Mace and chief executive of Constructing Excellence in the Built Environment (an enthusiast and strong supporter of research activity) recently said that building the Olympic facilities posed no problem. He is right; it is going to be a fabulous success, and it will happen because it is a project — and we are good at projects. Andrew Eastwell is Chief Executive Officer of BSRIA, Old Bracknell Lane West, Bracknell, Berks RG12 7AH.
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