The multitude of challenges facing the construction industry in Australia seems to keep accumulating. Supply chain shortages, labour shortages, price increases, insurance and financial difficulties, mental health issues, and gaps in skills and training have variously exacerbated during, or as a result of, the COVID-19 pandemic. These challenges not only impact workers within the industry and the ability to deliver projects on time and on budget, but ultimately the end consumer.
In a recent research report led by Master Builders Victoria in partnership with RMIT University, we examined what industry innovators are doing internationally to address these issues. We collected empirical data first-hand in Europe, the UK, and North America from 105 participants including builders, industry associations, architects, academics, developers, material manufacturers, housing providers, not-for-profits, sustainability consultants, policy advisors, and government officials.
While socio-economic conditions vary across countries, this research presents an opportunity to observe, contextualise, and learn from diverse experiences. In the process, there is also a prospect to see how these other jurisdictions and innovators are tackling long-term endemic challenges, namely how to deliver more affordable housing and accelerate zero-carbon building practice.
A collaborative approach to de-risking innovation in the construction industry
The construction industry faces new sources of risk at a time when large parts of the industry are not well-equipped to manage either existing or new sources of risk.
In this environment, it is challenging to introduce change or innovations where there is uncertainty about demand, market stability, and regulatory environments over the medium term. One key type of example we found overseas where de-risking was evident, was where the industry, either in partnership or through guidance from government, was taking a more collaborative approach to introducing change or taking up innovation.
The idea of shared knowledge, responses and costs means that individuals are not reinventing the wheel each time but are able to build upon what has occurred previously, with government providing a level playing field in terms of a stable and supportive regulatory environment. Below are five key actions which have implications for Australia.
1. Construction Innovation Hub, UK
The Construction Innovation Hub was funded in 2018 by the British government agency Innovate UK. The aim of the hub was to support a transformation in the built environment sector by providing examples and demonstrators of more effective procurement practices, for instance. It aims to help identify and resolve issues before they have significant impacts on the wider industry. The hub works across government, policy-makers and industry partners to build appetite for innovation and most importantly, to share and reduce risk. This can happen through research, partnerships and by removing extra costs to builders.
2. Product Availability Group, Construction Leadership Council, UK
The Product Availability Group is a working group formed by the Construction Leadership Council. It aims to bring together all the trade and professional bodies from the UK construction sector to discuss and respond to key challenges across the industry. For example, one of the Product Availability Group’s missions is to review projected supply chain material flows every three months to ensure issues of reduced supply can be addressed early.
3. Built to Innovate, Ireland
Ireland’s recent Built to Innovate initiative (funded by Enterprise Ireland under the Housing for All program) shows that the Irish government support is instrumental to help de-risk innovation, encourage training and to achieve better building outcomes. Built To Innovate supports Irish companies within the residential construction sector to enhance their operational performance by providing them with R&D to help implement modern methods of construction, lean training and digital solutions. Projects meet eligibility criteria when they can demonstrate a clear impact on the cost of home building in Ireland.
4. Built Environment-Smarter Transformation, Scotland
Scotland has established BE-ST (Built Environment-Smarter Transformation), formerly the Construction Scotland Innovation Centre. Beyond its focus on modern methods of construction and advanced manufacturing approaches, BE-ST is also committed to help homeowners and business-owners understand what the industry can and should do for them. This contributes to sharing information with customers and increasing trust in the building sector.
This consumer education is seen as an add-on to the training they already provide to professionals. With Scotland’s recent announcement that all new housing in Scotland will be built to Passivhaus standards, BE-ST is likely to play a crucial role in upskilling the workforce towards this shift.
BE-ST is hosted by Edinburgh Napier University, which has representatives on its board. This allows the group to identify industry problems and encourage collaboration across universities, bringing academic expertise together to solve those issues without the usual funding constraints. It believes that not being a lobbying group has allowed it to become a trusted entity, while also providing it with the legitimacy to challenge government.
5. Mass Timber Institute, Ontario, Canada
In a slightly different approach, at the University of Toronto, Canada, the privately funded Mass Timber Institute is playing a critical role in advocating for the development of affordable low-rise housing using local timber resources to the Ministry of Municipal Affairs and Housing. It also leads sustainable mass timber research by leveraging relationships between educators, industry, and Indigenous groups across Canada and internationally. In practice, this collaboration has led to knowledge sharing and the development of educational programmes led by local mass timber manufacturer Element 5, or with partnerships with Wood-Works or the Canadian Wood Council.
A network of innovation hubs in Australia
It is clear that there is an opportunity for Australia to develop state-led innovation hubs that could operate in a similar way to those groups described above.
The hubs should involve a wide range of stakeholders – the industry itself, Commonwealth, state and local governments, peak bodies, training and research organisations, civil society organisations, and more.
By having them located at a state level it allows sufficient size to deal with key issues within a geographic region. There could be an overarching national advisory hub that could facilitate key learnings across hubs and ensure knowledge sharing. Such a network of hubs in Australia could foster a more collaborative and transparent industry and lead to shared responses and learnings to address many of the challenges we face.
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The hub could be tasked with addressing both short and longer term issues across the industry and an early task should be for the hub to come up with a list of priorities that need to be addressed. Another task could be to advise on and guide businesses towards the most suitable business models and best tailored innovative solutions for them, based on empirical evidence and successful projects in Australia and elsewhere.
It is clear that there could be significant benefits of introducing innovation hubs within Australia, and we can look to learn from the successes of similar hubs overseas on how to do this.