Governments across Australia, Asia and worldwide are jostling to design ‘smart cities’ that will cater for our growing population. We need to build smart cities to maintain livability, but what are smart cities and how do we get there?
The definition of a smart city varies, but most would agree that a smart city is connected, integrated, sustainable, technology-enabled and data-driven. Smart cities are the future, which must be built today.
A vital component to creating smart cities is a willingness to take on risk and an innovative construction industry, but regulation and lack of innovation in our industry is holding us back.
The challenge for Australia is to better translate research into commercial outcomes. The Global Innovation Index 2017 ranked Australia 23rd in research performance but 76th in how well we translate research into commercial outcomes. We ranked last on the 2017 OECD Science, Technology and Industry Scoreboard in high growth enterprises, and the Innovation Science and Research System Review found that Australia continues to lag badly in key aspects of commercialisation of innovation.
Innovation in the construction industry
The construction industry has made huge transformations with innovative methods and materials overseas, however, that has not been replicated here.
Overseas we have seen 3D printing homes (Italian architect firm, CLS Artchitetti and Arup), robots printing pedestrian bridges (Amsterdam), crane-style printing homes and pre-fabrication and modular design for skyscrapers. Countries such as United Arab Emirates (Dubai) and China are pursuing a leadership position in the design of smarter cities, fueling innovation and propelling their cities into the future.
Australia is following suit, but not fast enough. Companies such as Mirvac and Lendlease are embedding more innovative methods in the prefab industry. Laing O’Rourke is pursuing FreeFab 3D Printing, and Perth-based company Fastbrick Robotics is launching Hadrian X in 2019, a digital construction system which will change the way homes are constructed, improving access and affordability.
Imagine printing the walls of the house with a machine that you drive to the site and set up by unfolding a boom. Fastbrick Robotics is set to transform the construction industry with technology that does just this.
However, the fact remains that the Australian construction industry is far too traditional and risk averse.
Progress is being halted by unions and regulation that is restricting the industry’s ability to future-proof our cities. Our substantial population growth forecast and urban lifestyles means that we need to go up, build taller buildings, change the layout, include drone platforms, reduce the size of apartments, minimise kitchens (Manhattan style), and have co-location working spaces and food outlets/supermarkets on the lower levels, most of which is made almost impossible due to legislation.
The regulation barrier
Former Prime Minister Malcolm Turnbull came into power with innovation as a top priority on his agenda. While he significantly invested in this, the same effort was not put into clearing existing regulatory barriers.
The real barriers to innovation are regulatory burdens that hold new products and services back for government approval and divert the attention of entrepreneurs to compliance matters.
Australia’s regulatory model is based on the European model, where governments tend to be more prescriptive. When regulators see a new technology, their first instinct is to regulate it. This is in contrast to the US, where industries tend to regulate themselves through industry-specific regulations and contracts).
Australia has a high degree of business maturity and transparency in engagements between business and government in the policymaking process. While regulation is introduced with the best of intentions, too often it brings extra costs, risk, and uncertainty, a sure-fire way to impede innovation and investment.
Government-led regulation in Australia means that it is difficult to introduce new construction products. Additionally, the government provides no incentives to make construction companies want to innovate.
By contrast, governments in Singapore and Hong Kong provide financial incentives for the use of prefabricated technologies, which has resulted in increased adoption. France has introduced new regulations mandating all new buildings in commercial zones have either solar panels or a green roof.
The industry barrier
Change must be led by government, but also needs to come from within the construction sector itself, including union associations.
Australian construction companies are rarely the first to innovate. We have seen industry reluctance to trial new approaches, and techniques used by bricklayers, concreters and steel workers remain largely the same.
New methods are typically expensive to design, trial and roll out, so companies are lured by short-term cost savings.
Despite these barriers, there are signs of innovation among some construction companies.
Frasers Property’s sustainable shopping centre in Central Park, Sydney, for example, is a great step forward. But we need to think bigger and longer term: green pre-fabricated shopping centres focused on experiential stores, requiring less physical footprint, for instance.
Furthermore, union associations inadvertently prevent progress in an effort to protect workers’ jobs. With technology advancing exponentially, unions need to strike a better balance between embracing change and protecting their members.
Technology will displace workers, but this won’t always translate into a loss of jobs. If unions work more constructively with employers, governments and industry technology developers, then workers stand a better chance of reskilling.
Nick Deeks has been Managing Director for WT’s Australian Business since 2013.
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