Bigger opportunities in a smaller world
After 16 years as CEO of BSRIA, Andrew Eastwell stepped down at the end of April. We invited him to share a final perspective on the world of building-services engineering.
Some events and processes are just so huge that you don’t even notice that they are happening. When the scale of change dwarfs our individual perspectives, it is difficult to comprehend that the landscape is changing around us, whilst thinking that our own micro-business climate remains largely untouched. We do not see continental drift because our own homes remain stable in context — but nevertheless an entire landmass is on the move, if very slowly.
Globalism is a bit like that, too. Globalism is not new; indeed the Romans were using spices from China and India at the time of Christ, but it is the scale and speed of global business development that has rocketed in the past decade or so.
We buy our white goods through local retailers or, maybe, online — with hardly a thought for the immense global supply chain network that contributed to the end product delivered to our door.
This is not to suggest that we are unaware of these issues. We happily accept that our sat nav relies on a network of orbiting satellites, currently operated by the Americans but with Europe in hot pursuit to create its own system (Galileo), What might be less obvious is the design of the in-car unit being from UK, software from USA, chips from China, assembly possibly in Indonesia — and so on.
In a construction context we are also undergoing similar planet-wide change that I, for one, have not really understood until recently.
The aggregation of medium-sized consultancies into multi-national corporations is well known. However, since we mostly only see this on a national scale as familiar old-name companies become absorbed into global corporate brands, the global picture is much less obvious.
At this scale, single businesses can bid for the very biggest of world projects — airports, sports stadia, whole cities and associated civil works. Specialist teams drawn from many countries with a dizzying array of skills can provide compelling offers to the finance brokers who ultimately control the development process. These new construction megaliths are the equivalent of continental drift — so big and distributed that they are not really visible to the naked eye.
So, if the rapid development of this type of business has taken place over the past decade at what point does big become uncontrollable or unprofitable?
Governments have continually struggled with the reality that innovation tends to happen most readily in smaller business where there are fewer corporate hoops to jump through but that innovation roll-out at scale requires the clout of a bigger player. Thus it is that SMEs always feature in Government discussions about innovation support, but it is big business that regularly visits no 10 (and 11) Downing Street.
At this particular moment in time there is a pressing need to support UK based multinational construction businesses since they hold a key position in turning the largely consumer-based UK recovery into an export-led period of growth. It is no accident that increasing emphasis on export is seen from the likes of UKTI and activity in the Foreign & Commonwealth office. The truths of this need for export activity are likely to survive changes of Government and so should be a continuing feature for the decade to come.
It has been suggested that before too long there will not be any ‘undeveloped’ countries left to urbanise and that the era of sustained growth will eventually come to an end.
I am more on the side of predictions by Hans Rosling, a Dutch statistician, who has estimated that ‘peak people’ is expected to occur in about 100 years time, with 11 billion souls on the planet. More startling is that of this 11 billion nearly all the growth is in Africa and Asia, so it is not difficult to see why a global perspective is valuable to big business and to governments.
So where do smaller businesses fit into this somewhat fantastical new future?
Earlier I said that it is smaller business that is generally fleeter of foot and with the potential to innovate. There are some signs that smaller business might also be able to adopt technologies developed to service the giants but without incurring the pain of development costs. Chief amongst these is, of course, BIM — together with the many tools of simulation, costing, carbon accounting, asset management etc. that will eventually be part of the e-construction landscape. If, as seems likely, Google chooses to enter the market with an open-platform offering, big and small alike will have access to the same tools. Google already owns the sketch-up tools and has paid a significant sum for the ‘Nest’ building-management product, so who knows what is next.
For much of the past decade (the time when MBS has been on the scene), we have been on the economic back foot. A vibrant, export-led construction sector is a way to secure wealth that can then be manifest in projects, perhaps of smaller scale, in the UK. It will be these that sustain the smaller end of the specialist-engineering sector, well placed to offer an intimate and highly creative service both to public and private sector clients.
Even if the world is going to need an expansion of the built environment able to accommodate another 6 billion people over the next 100 years, those that are here already will need refreshment of their living spaces as well.
Andrew Eastwell has been succeeded as CEO of BSRIA by Julia Evans.