Nick Shields, Director of the Scottish Manufacturing Advisory Service (SMAS) at Scottish Enterprise, discusses how digital holds the key to a more productive construction sector.
The modern approach to production always seems to focus on the new ‘hi-tech’ industries. The most profound impact though of these modern approaches will have the biggest impact on our most traditional of industries.
We have only made consumer electronics and TVs for the past 50 years or so. We’ve only been making cars for the past 100. But we’ve been in the business of construction for millennia. Sometimes though for our most traditional industries, change can take the longest to make due to custom and practise.
One traditional industry – agriculture, has undergone a rapid change in the past 20 years. In 1840, 24% of the population worked in agriculture, which for its time was a low number due to the rapid industrialisation of the UK. These days, agriculture employs less than 1.3% of the UK workforce. However, the adoption of new technology has meant that labour productivity has increased by 250% since 1973.
Productivity in the construction industry has flat-lined since 1994, while the whole economy has improved by around 30%.
The publication of the UK government’s Made Smarter review in October 2017 highlighted that through the adoption of modernised digital approaches by businesses, the size of the prize for the UK economy is an eye watering £455bn over the next 10 years.
And the sector that has by far the most to gain from this new digital approach is construction, with a predicted £88.9bn of additional value – that’s 20% of the total.
Compare that to £17.5bn for the aerospace sector (a sector that the UK is a world leader in) and you can see that the construction sector’s prize is five-times that of aerospace.
There are no silver bullets to improve productivity in any industry – however, that does not mean we should not try. Looking to other countries, we can see that this is not a ‘UK’ specific issue. In fact, UK productivity beats some of our European neighbours – even Germany, who is often held as the paragon of productivity virtue!
SMAS Conference 2018
SMAS’s biennial conference will be held on 30 May at the Westerwood Hotel in Cumbernauld.
There’s never been a more exciting, but also disconcerting time to be involved in manufacturing. Industry 4.0 – the new model for manufacturing dominates all the conversations. But what does it mean for your business in terms of adoption, funding and skills?
Professor Juergen Maier, CEO of Siemens UK and lead on the recently published Made Smarter report, will be joining a stellar line up of industry heavyweights on the main stage.
Practical industry led workshops, exhibition showcasing solution providers and support organisations, as well as the networking dinner the evening before completes the conference programme.
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Digital transformation offers huge potential to manufacturing over the next decade. The construction sector has the greatest opportunity to embrace this new digital world and through techniques such as offsite manufacture, profoundly increase productivity.
This will have significant benefits both for business through improved profitability and societal through the provision of high quality affordable housing.
Scotland’s construction industry is expected to grow over the next five years according to forecasts by the Construction Industry Training Board.
A 3.9% growth in public housing each year is expected for the 2018-22 period with private housing growing at just under 3%. Much of this driven by the Scottish Government’s target to build 50,000 affordable homes by 2021.
Scotland has demonstrated its commitment to improving construction productivity through the establishment of the Construction Scotland Innovation Centre (CSIC).
This centre has been created to allow businesses to gain hands on experience of current technology that will improve building techniques and productivity. Focused on Business, Product, Process and Service forms of innovation; CSIC offers advice, funding, facilitation and access to the appropriate expertise.
It facilitates collaboration with Scottish businesses, academia (through 13 partner universities) and public sector organisations.
It’s for anyone within the construction industry to use, with annual membership packages and pay-as-you-go models on offer. The centre’s Innovation Factory has been designed to give businesses hands-on experience of labour-saving technologies in advance of purchase to de-risk any investment decisions, with everything from robots to offsite manufacturing cells and innovative timber cutting and assembly equipment.
A productive construction sector will be at the heart of a productive economy. Providing much needed infrastructure improvements which attract foreign investment coupled with a sustainable and low-cost approach to new housing will also provide the societal benefits on affordable housing that the UK needs.
My challenge to you is to think how you can improve your construction business by at least 10% in the next two – three years and I encourage you to engage with the CSIC for a low risk approach to achieving this.