Prime Minister Malcolm Turnbull launching his innovation policy.

I watched the livestream from CSIRO as Prime Minister Malcolm Turnbull launched the government’s Innovation Statement – otherwise known as the National Innovation and Science Agenda. I watched, that is, until the feed died.

Somehow this seemed to reinforce the PM’s message that Australia must do better at innovation when compared to its OECD neighbours. The announcement wasn’t the usual jingoistic celebration of Aussie inventiveness. Not one reference to the Hills Hoist or inventing WiFi. Instead, it’s a more mature narrative summed up best by a line on the website: “to ensure Australia is well placed to thrive in this exciting time, there are some areas we need to improve on” (livestreaming might have just been added to the list).

At an event held in Sydney on World Architecture Day in October, we heard that rapid urbanisation in Asia was one of the key drivers of economic growth, and living well meant doing urbanisation better than we have in the past.

Something like $20 trillion is expected to be invested globally in urban infrastructure by 2050. Around half of the construction activity this will generate will occur in our region. But is our local built environment sector positioned to capitalise on this growth if only around nine per cent of businesses have a presence in the Asia Pacific region? The National Science and Innovation Agenda almost takes this as a starting point, focused as it is on encouraging Australian business to be competitive and embrace the reality of “extraordinary technological change that is transforming how we live, work, communicate and pursue good ideas”.

There’s funding for incubator support programs, accelerators for sectors with high innovation potential, a more continuous cycle for industry-led research linkages and an understandable support for STEM programs to update how we educate the next generation. Architecture and design could do well from the announcement – if it remembers that architecture is, after all, considered a discipline in the STEM family (or the even more desirable cousin, STEAM).

The announcement – to its credit – is more than a set of programs. It’s got the big Turnbull narrative to it (its hashtag, #ideasboom, is aspirational – and already trending on Twitter). So in the broader context of this announcement, how does architecture measure up to Australia’s innovation economy? It’s a question asked by the NSW Architects Registration Board and University of Technology Sydney over the last year. We know architecture can push limits, test old ways of working and invent new products, materials or technologies. We know that around 90 per cent of the sector is small and medium enterprises. We think architecture makes a contribution to Australia’s innovation economy. So can we measure it?

We certainly know the economic and social value of innovative architecture can be measured. In 2013, Deloitte Access Economics valued the asset value of the Sydney Opera House at $4.6 billion. Included in the estimate was the impact of its tourism brand and contribution to the international perception of a Sydney – and Australian – identity. These things are intangible – beyond the value of the concrete, tiles and ticket sales of the Opera House itself. Utzon’s work is rated – among early adopters and innovators over 40 years old – as the most distinctive brand in Australia, ahead of the iPhone (ranked 2nd) and, actually, even the national brand – “Australia”. It stands as an emblem of local innovation – a catalyst for our modern construction supply sector, sparking the growth of expertise in precast concrete, plywood, sealants and more.

To most of us, architecture is the physical thing – a building. But UTS was asked to measure the intangible value added by architecture when it pushes the limits. The areas we’re looking at include new technologies (like tailored software combinations we see in firms, purpose-built software that powers parametric design for greater efficiency or an even better fit for purpose); new business models or new business practices (like firms that are finding ways to spin off new parts of the business – a big part of the government’s announcement); new cultural products (think of the tourism and global promotion from the Venice Biennale that attracts almost 200,000 people to the city… or any of the other 22 dedicated to architecture around the world, for that matter); and the value of design education and research – both domestically and for its export potential (scaled up across, say, the four schools of architecture in NSW).

We all get a buzz from the intangible magic made on drawing boards, in architectural models, CAD renders, flythroughs and high-end building information modelling. We watch as architects work with a skilled steel fabricator or cladding specialist to leap from a simple sketch on paper, to a crude model, to a cutting list for the shop floor in a few days or weeks. We see architects working with clients, along with builders, engineers, trade contractors and suppliers, to bring design thinking to a complicated world of constraints; physics, cost, planning rules or even just the problem of protecting from the hot western sun. Along the way, basic skills are tested and pushed, materials are transformed and value is added. It’s one of the things that makes architecture different to, well, building. The transformative value-add that converts a concept, to sketch, to something costed, cut, assembled and constructed.

Think of the world-first glass louvres on Renzo Piano’s Aurora Place that went on to be a central part of a supplier’s product inventory for over a decade. To make the “wintergardens” work, and maintain the oblique view to the iconic Sydney Opera House (remember, Sydney property value is all about the view), a new glass louvre system was needed. The solution – conceived first by the architect – was a revolutionary glass louvre fixed off a glass mullion. The developer, Lendlease, supported the idea. This is critical – innovation can’t happen if the procurement agent stifles it due to some fear of the downside risk. What followed was a global effort of in-house engineering and design integration. Soon after, major projects using variations of the system popped up in Newcastle, Sydney, the Gold Coast, Adelaide, Melbourne and beyond. The R&D invested in Aurora resulted in a new product inventory that continued to develop and be adopted in more cost effective applications.

More recently, consider the winning proposal for ULI’s George St 2020 Urban Innovations competition that sees a “smart carpet” of data-gathering/data-giving tiles in different configurations along Australia’s oldest street. A local version of the Dutch solar cycleways that went viral last year.

Right now, firms like Cox Architecture are developing custom built software to model options for Sydney’s urban growth, working alongside undergraduates from UNSW’s Computational Design course in an unconventional partnership that gives undergraduate students real experience, and opens architectural practice to a new kind of software-savvy capability.

Or again, think of Dr Chau Chak Wing’s bendy brickwork – 320,000 bricks that required the design and testing of five new bricks, and a new kind of brick tie to be invented. The manufacturer, Brickworks Building Products, tell us the early prototypes failed. This testing, failure, tweaking and testing again through prototypes – in order to find the design solution – is an example of the ethos shared by the design process, and what drives the “launch and learn” mantra of the start-up world. The R&D invested in Chau Chak Wing has gone on to inform the brickwork in Australia’s embassy in Bangkok (by BVN) where more than 400,000 bricks will be provided by Bowral Bricks.

Architecture that pushes the limits also demands innovation to make it happen. Done right, project funding underpins embedded R&D. When we see it delivered, we also see downstream products, materials and technologies as the result. And we see flow on benefits to the economy.

But preliminary research is telling us the flow on effect of architecture to the economy has been structurally undervalued by around $1 billion annually, because we tend to measure the tangible result of architecture and not the intangible value of sophisticated design infrastructure needed to deliver. The National Innovation and Science Agenda has a fair focus on valuing the intangible – from new rules about depreciating intangible assets like patents or a business model, to special mention of the need to create a culture that embraces risk.

According to IBIS world, Australia’s architectural services generated around $6.4 billion in revenue in 2014-2015, and is set to grow by just over two per cent and reach $7.1 billion by 2020. This sounds healthy, right? So what fuels innovative firms in the sector? The UTS research sees innovation in firms coming from:

  • a strong cultural understanding and valuing of novelty in design terms
  • a broad generalisation of skills leading to a native “boundary spanning” capability
  • early adopters of technical tools and technologies
  • a strong international culture of architecture and workforce mobility
  • a strong willingness within firms to innovate, and
  • a strong creative culture which is seen as core to innovation

With all this positivity around industry capability, it does make you wonder – if we asked our infrastructure procurement systems to act as kind of “angel investor” for Australia’s innovation potential, by demanding innovation in the $105 billion we spend each year on our roads, rail, facades, roofs, insulation, windows, doors, carpet, paving, lighting and landscaping – would we be doing better? IBIS World estimates that growth in the architectural sector is likely to rise by an annualised 0.4 per cent, compared to the forecast GDP growth of 2.7 per cent over the same period. Which means, of course, that the industry is underperforming the economy. Maybe we aren’t investing in R&D?

But we are. Australia’s construction sector spent around $819 million on R&D in 2011-2012, so why aren’t we seeing more innovation in our buildings, spaces and places? IBISWorld tells us the industry has a fragmented structure with few large-scale national players. Only about 1.6 per cent of architectural firms employ more than 20 staff. So do we need more incentives for R&D, or are there underlying structural flaws in the sector that act as a barrier for R&D to have impact today? The research is telling us the barriers to innovation are:

  • a focus on design as the only form of innovation
  • a skills shortage within firms necessary to innovate through the entire value chain
  • predominance of firms as SMEs with little revenue to dedicate to R&D
  • a lack of strategic planning around innovation and business development in firms
  • a strongly competitive environment encourages by design competition meaning collaboration between firms is rare

Shifting the ARC Linkage grants round to a more continuous cycle might help. The Incubator Support Program could help build capacity among smaller practices. Breathing life into architecture as a part of new STEM funding could see a fresh cohort of software makers, not just software users reinvent some of the tools we use to conceive, design and fabricate components in architecture. The Business Research and Innovation Initiative promises – at a squint – to rethink procurement of our urban infrastructure. “Government spends about $50 billion on procurement every year in Australia, but when it comes to how that procurement goes on to foster innovation, Australia ranks only 77th out of 144 countries,” apparently. As part of this scheme, “entrepreneurs will receive funding to create new products and innovations with export potential”. Just imagine if infrastructure were included in the five national policy and service delivery challenges yet to be agreed. And why shouldn’t it?

Australia’s Infrastructure Audit, released in 2015, shows that in 2011, around $187 billion was derived from infrastructure, and by 2031 this will essentially double. Imagine the potential impact of innovation applied at this scale. The audit details a number of complex issues, which read like a roadmap for R&D and urban innovation, including: the implications of demographic change for Australian society generally and government finances; the scope and direction of technological change; changes in the global economy; the future of work, including where people work, incomes and part-time work; and the prospect of climate change, and uncertainty as to how the international community will respond.

And what’s the cost of doing nothing? Congestion alone in our cities, towns and regions threatens to cost Australians $53 billion by 2031 as the population grows.

Of course, part of the answer lies in asking our buildings, infrastructure, spaces and places, our appliances, control systems and gadgets to be sites for innovation. The key thing is that research and innovation in the built environment sector is often project-based. It’s one reason Cooperative Research Centres struggle in the sector – the pace of university-grade approval, enquiry, validation just doesn’t work with (even large scale) project timeframes. It might explain why innovation is so often driven by architects working directly with contractors and suppliers. But it may also explain why R&D in the sector lacks a sense of scale or momentum. For this reason, the government’s focus on breathing life in to industry/research collaboration is a good thing. But let’s not forget the value of government being a smart client when it procures to ensure more innovation in our infrastructure spend.

Just as innovation has been the catch cry of the Paris Climate Summit, it should also be a part of our domestic infrastructure challenge too, and firmly part of Australia’s cities agenda.

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  1. Ah yes, but will council planners – constricted by both the letter and their perception of limited freedom to innovate – see it that way? Let’s hope so.
    Hearing a positive response from the various planning ministers would be a help… c’mob Rob Stokes, you know you want to!