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SUMMARY & TABLE OF CONTENTS
Authors
HelenGoodland,ChrisLindbergandPaulShorthouse
December4,2015
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A vision of the future Inaworldpoweredbyinnovation,actionisneededtoensurethatBCconstructioncompaniesarereadytomeetthechallengesahead.
It’shardtooverstatetheimportanceofconstructiontoBC’seconomy.Asa$16.5billiondollarindustryitprovides8%oftheprovince’sGDPandemploysmorethan200,000workers,makingconstructiononeofBC’slargestemployers.Thismeansinnovationisvitalforthecontinuedprosperityoftheprovince.
Theindustry’sfutureincludesprofoundregulatory,technical,demographic,macroeconomicandconsumerchangesthatwillimpacteveryaspectofconstruction.Nationalandinternationalfactorssuchasanagingpopulation,climatechangeandthedigitaldesignrevolutionarechangingtheneedsandexpectationsofregulators,clientsandend-usersandalsoputtingpressureontheindustrytointegratenewideas,technologiesandspecificationsintotheirprojects.
BCconstructionfirmswillhavetoadaptandinnovateorriskbeingleftbehind.AlthoughBCisstrongingreenbuildingandwoodtechnologies,wehavecatchinguptodoinotherareas.PublicandcorporateinvestmentininnovationinBClagsbehindotherhighlydevelopedcountries.Themechanismsforknowledgesharingandcollaborationoutsideofprojectsdonotexist.Fundamentally,theindustryhasnotfosteredacultureofinnovationthattranscendsday-to-dayproblemsolvingonaconstructionsite.
Thesegapsareconcerningbecauseinnovationistheultimatesourceoflong-termeconomicgrowthandcompetitiveness.Theabilitytocreatenewproducts,techniquesandservices,tofindnovelusesforexistingproductsandtodevelopnewmarketsprovideswillensuresuccessinthetwenty-firstcentury.
This“calltoaction”ismeantforgeneralcontractingandtradecompaniesandthemanystakeholdersthatareinvolvedwithconstructioninBC.Ourreportmakesthecasethatengagingpro-activelywithinnovationcanhaveapositiveimpactonbusinessandtheabilityofbusinessesofallsizestosucceed.Itoutlinesthekeychallengesthathavetobeovercomeandhighlightstheneedfora“made-in-BC”constructioninnovationactionplanthatcanserveasamodelfortherestofthecountry.
TheBCConstructionAssociationispleasedtoleadthechargeonthisimportantissue,andproudtohaveco-fundedthisreport.Welookforwardtocontinuingtheconversationandwelcomeallstakeholderstojoinus.
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The state of innovation in BC’s construction industry
Innovationcanbedefinedasthesuccessfulintroductionofnewtechnologiesorproceduresintoindustry.Thescopeofinnovationintheconstructionindustryisbroadandappliestoeverythingfrombuildingproducts,materialsandsystemstoconstructiontechniques,equipmentandbusinessoperations.
Theneedformoreinnovationandbetterinnovationdeploymentsystemsintheconstructionsectoriswellrecognized.Comparedtootherindustries,constructioninmostregions(includingBC)remainslargelylocally-focused,undiversified,andwithrelativelysmallexportmarkets.Despitethefactthatitisamajormarketforthetechsector,thereisnoconstruction-specificinnovationplatformonwhichtoengagewiththeR&Dandstart-upcommunity.
Externalforcessuchaschangingsocietaldemandsandexpectations,theincreasinglyglobalizedmarketandbusinessclimate,labourmarketchallengesandadvancesinknowledgeandtechnologyarecreatingnewpressuresforconstructioncompaniestoinnovate.Althoughitmayaffectindividualbusinessesverydifferently,thereisgeneralagreementthatthewayconstructiongetsdonetenyearsfromnowwillbeverydifferentfromtoday.Innovationwillbeessentialtotheindustryasawholetoreducecapitalconstructioncosts,improveproductivity,increasethenumberofprojectscompletedontimeandwithinbudget,andreducethenumberofdefectsandaccidents.Investmentininnovationcanalsohelpcompaniestodifferentiate,improvetheirreputationandcompeteforthenextgenerationoftalentinatightlabourmarket.
Itisimperativefortheindustrytocontinuetoinnovateinresponsetothesedriversorriskbeingleftbehind.Constructionindustrymemberssaythatcostofmaterialsandenergy,anagingworkforce,theneedforworkerswithhigherqualificationsandsustainabilityarethefourmostimportantdriversofinnovationinBC.Theyaremanifestingthemselvesintrendssuchaslowcarbondesign,thedigitalrevolutionandtheinfluxofcheapproducts(andlabour)fromoverseas.
Thereareseveralareasofstrengththattheconstructionindustrycanleverageasastartingpointtobuildacultureofinnovation.BC’seconomyhasstrongprospectsforgrowthwithlowinterestratesandanattractivecorporatetaxregime.Theindustryhasexpertiseinwooddesign,constructionandtheinfrastructurethatsupportsthedevelopmentofinnovativewoodproducts,capabilitiesindigitaltechnologiesandbuildingenvelopedesign,testingandassembly.BCbuilderscanalsoputupaconcretehighrisebuildingfasterthanmost.ThenextgenerationoftalentisputtingafreshfacetotheindustryandanewfederalgovernmentbringsconcretecommitmentstoinvestinginCanada.TheBCconstructionindustry’sleadershipingreenbuildingandinallsortsofinnovativeapplicationsofwoodtechnologiesiscomingtotheforejustatthemomentwhentheworldislookingtothebuiltenvironmenttomitigateenvironmentalandsocialchallenges.
However,theindustryalsofaceschallenges—suchasthenumberofstakeholders,riskaversion,thelackofacultureoflearningandshorttermthinking—thataredeeplyrootedandwillbeverydifficulttodislodge.Thethreatsofcontinuedlowproductivity,lackofattractivenessasacareerpathtonewworkers,andanunsatisfactoryreputation(whetherjustifiedornot)willonlybecomegreaterastheregulatoryframeworkcontinuestobecomemorechallenging,materialscostsgoupandthelabourshortagebecomesincreasinglyacute.
BCiswellpositionedtotacklethechallengesthatlieahead,butitwilltakeaconcertedeffort.Creatingacultureofinnovationwillnotjusthappenbyitself–itrequiresthecommitment,investmentanddeterminationoftheindustryasawhole.
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A vision for BC’s construction industry ThisdocumentshowsthatembracinginnovationwillimproveprojectandbusinessperformanceandpositionBCconstructioncompaniesforsuccess.However,acomprehensiveindustrialactionplanisneededtocoordinateeffortsandcatalyzeandcaptureindustryinnovation.Wepresentthecaseforsuchaplanandoffersfivefoundationalpillarstoserveasaguidingframework:
1. Leadership–Acohesiveindustrythatembracesandcelebratesinnovation2. Performance—Aresponsibleindustrythatcontinuallyimprovesprojects’economic,environmental
andsocialperformance3. People–Atalentedindustrythatattractsaskilled,technologically-savvyworkforce4. Growthandresilience–Anefficient,competitiveandprofitableindustrythatdriveseconomic
growth5. R&D–Anadvancedindustrythatdevelopsandimplementsinnovativenewproducts,processesand
businessstrategies.
ThesefivepillarslayoutanaspirationalinnovationprogramofambitionsandrecommendedactivitiesfortheprovincethatreflectbestpracticesandthestrengthsandweaknessesoftheBCconstructionindustry.Theirsuccessfulimplementationwillrequirebroadsupportfromgovernment,researchorganizationsandtheconstructionindustryasawhole.
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Pillar 1: Leadership - A cohesive industry that embraces and celebrates innovation
Ambition1.1Establishanaction-orientedinnovationcounciltobethe"voice"ofinnovationin
constructioninBC
a. Establishanaction-orientedinnovationcounciltobethe“voice”oninnovationinconstructioninBCb. Developaformalindustrialactionplanforinnovationc. Keeptheconversationalivewithaseriesof“meetingoftheminds”dialoguesaroundtheprovinced. Developstrategiessothatthemanyvoicesofsmallbusinessesareheard
Ambition1.2.Reportonkeyperformanceindicatorsforconstructionexcellence
a. Engagewithindustryleadersandstakeholderstodeterminetheoptimalsuiteofindicators,reportingframework,andresponsibilitiesfordatacollectionandmonitoring.
Ambition1.3Recognizeandcelebrateinnovation“champions”
a. Promoteawardsandrecognitionprogramsforinnovationb. Showcaseleadingindividualsandorganizations
Ambition1.4Shiftmisperceptionsoftheindustryviapublicengagementandstakeholder
communication
a. Developandmaintainpublicengagementandstakeholdercommunicationprogramsb. Reviewandrevamplanguageandimagestosteerawayfromtraditionalperceptionsofconstructionbeing
physicallydemandingandwithoutopportunitiesforcareeradvancement.
Ambition1.5Pro-activelyengagewithgovernmentonprogramandpolicydevelopment,investment
andprocurement
a. Pro-activelyengagewithalltherelevantdepartmentsandagenciesofgovernmentatthelocalandprovinciallevel:fosteringpartnershipswherepossiblesoindustrystaysaheadofcodeschanges,etc.
b. Considertheprosandconsofadvocatingforasinglepointofseniorleadershipwithingovernmenttohelpdirectdesiredreforms
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Pillar 2: Performance - A responsible industry that continually improves projects’ economic, environmental and social performance
Ambition2.1Encouragetheadoptionofinnovativedesignandconstructionmethodsthatputquality
first
a. Advocateforopenuniversalstandardstomakecommunicationanddatatransferseamlessandsecureacrossallplatformsanddevices
b. Supporttheadoptionof“ModernMethodsofConstruction”suchasoff-siteconstructionandleanconstruction
c. Helpbusinessesofallsizesgainaccesstoanddeploythenewtoolsandtechnologiestheyneedtobecompetitive
Ambition2.2Continuetopushtheboundariesinlow-carbon,healthyandgreenconstruction
a. LeverageBCleadershipingreenbuildingandtheuseofwoodwhenfocussingonourcompetitiveadvantagesb. Promoteoccupantandoperatortrainingtoensurebuildingsworkproperlyandprotectinvestmentsin
innovationc. Supporttheadoptionofsustainablematerialsandtechnologies
Ambition2.3Encourageallbusinessestodemonstratecorporateresponsibility
a. Encouragecompaniesofallsizestoactethicallyandtransparentlyatalltimestobuildapositivereputationandwinwork
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Pillar 3: People - A talented industry that attracts a skilled, technologically-savvy workforce
Ambition3.1Helpbusinessesofallsizestoacquirethefullspectrumofskillsnecessarytocreateand
implementinnovativeideassuccessfully
a. Fosteracultureoflearningtodevelopanengagedandinformedworkforceb. Developbusinessleadershipcapacitysocompaniesofallsizescanmanageforinnovationc. Considerestablishing“BestPracticeClubs”tobringthebenefitsofbestpracticetoapractical,personaland
locallevel
Ambition3.2Helpbusinessesleverageinnovationtodriverecruitmentandretention
a. Undertakeareviewofprogramsaimedatimprovingtheimageandperceptionoftheindustrybyencouraging“beyondcode”bestpractice
b. Reviewrecruitmentmessagingsothatitexplainsthecareerdevelopmentopportunitiesandthediversityofjobsavailable
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Pillar 4: Growth and resilience – An efficient, competitive and profitable industry that drives economic growth
Ambition4.1Ensureprocurementstructuresmeetclientandindustryneedsandprovideanequitable
frameworkwithinwhichcompaniescaninnovatesafely
a. Reviewcurrentprocurementpracticesandimplementtheimprovementsidentifiedb. Advocatefora“quality-first”agendawherelifecyclecostsandthevalueofdesignarerecognizedc. Developcommonlanguageforhow“innovation”shouldbedescribedandinterpretedinthebidprocessd. Createandofferprocurementtrainingforownerse. Workwithstakeholderstodeterminehowtomitigateadversarialbehaviours(suchassuicidebidding)andto
minimizetheundergroundeconomy
Ambition4.2Supportongoingevolutionofstandardsandcodesasameanstopushtheinnovation
intothemarket
a. Fosteracloseworkingrelationshipwithpolicymakersatthemunicipalandprovinciallevelsandparticipateproactivelyinthedevelopmentofcodesandstandards
b. Advocateforperformance-basedbuildingcodesasawaytodriveinnovationintobuildingprojects
Ambition4.3Developstrongsupplychainssonewideascanberealizedcosteffectivelyandina
timelymanner
a. Encouragemethodsthatclosegapsinthesupplychaintoensurethereliablereleaseofworkbetweenspecialistsindesign,supplyandassembly
b. Advocateforcentralized,onlinebiddingandtenderingc. Promoteadesign-led,“life-cyclecost”approachsothatconsultantsarerewardedfortheirexpertised. Connectwithfinancialinstitutionsandinsurerstoexploreinnovativefinancingandriskmanagement
mechanisms
Ambition4.4PrioritizeinnovationsthathelpBCcompaniestoboostcompetitivenesssotheycan
realiseareturnoninvestmentininnovation
a. ShowcaseBCcompanies’proficiencyinsustainableconstructionprocessesandproductsb. LeverageBC’svariousexportagenciestopromoteBCcompanies’expertisetonewmarkets
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Pillar 5: Research and development - An advanced industry that develops and implements innovative new products, processes and business strategies
Ambition5.1.Supportresearchanddevelopmentnetworksandcentres
a. Exploretheviabilityofestablishingaconstruction-focussedtechnologycluster,leveragingtheleadershipofBC’swoodsectorasarolemodelandpossiblepartner
b. LeverageVancouver’sestablishedventurecapitalcapacityandstart-upcommunitytosupportaconstruction-focussedincubator
c. CreateopportunitiesforindustrytofeedbackideasfromthefieldintotheR&Dcommunity
Ambition5.2Showcasedemonstrationprojects
a. BuildonBC’strackrecordof“beingfirst”whenitcomestoinnovativeprojectsb. Connectwithindustryassociations,tradeagenciesandNGOswhocanhelptoprofilelocalsuccessstories,
collectdataandbuildalibraryofprojects
Ambition5.3Advocatefor,enableanddirectpublicfundingandbusinessinvestmentininnovation
a. Onthestrengthofasharplydefinedvisionfortheindustry,advocatestronglyformorepublicspendingonconstruction-relatedR&D
b. Helpindustryadvocates(suchasassociations)makethebusinesscaseforinvestmentinR&Dtoconstructioncompanies
Ambition5.4StrengthentheroleoflargefirmsinBCasdriversofinnovation
a. Developtoolsandresourcesforlargefirmstousetoengageemployeesandhelpthem“thinklikeinnovators”b. HelplargeGCfirmstopromotetheirinvestmentsininnovationsotheycanworktogethereffectivelyandwin
workc. Encouragelargefirmstoshareideasandsupportcollaborationtoincreasetherateofmarkettransformation
Ambition5.5Encouragebusinessestocollaboratetoachievescaleandshareknowledge
a. Fosterasafeandpositiveenvironmentinwhichcompaniescancollaboratetodevelopnew(nonproject-specific)solutions
b. Providetoolsandresourcesforcompaniestocollaborateinordertoachievesufficientscaletocompeteonlargeprojects
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Three top priority actions 1. Create an action-oriented Innovation Council A“ConstructionInnovationCouncil”withanoutcome-orientedmandateisessentialtocreateacohesiveandresonantvoiceanddrivetheagendaforward.ParticipationontheCouncilneedstobecarefullysoughtfromrepresentativeswithinkeystakeholdergroups(clients,researchers,trainers,consultants,etc.)whoaremotivatedtoactandhaveaproventrackrecordofaccomplishments.TheCouncilwouldberesponsibleforsteeringthedevelopmentofaformalindustrialactionplanforinnovation,fundraisingforoperationsandactivities,advocacyand,importantly,governmentrelations.ItwouldalsoofferareplicablemodelforotherCouncilsacrossthecountryandconnectintosimilarorganizationsaroundtheworld.
2. Develop an action plan for construction innovation Toorganizeandprioritizealltheworkthatneedstogetdone,companiesofallsizeswouldbenefitfromaninnovationactionplanbuiltoncleargoalsanddescribingtheprioritizedfocusareasforresearch,timelinesandhowprojectsandactivitiesaredecidedupon.Werecommendthefollowingnextstepstostarttheprocess:
• Decideontheroleofgovernmentintheactionplan..Therationaleforinvolvinggovernmentisthatmanyoftheenablersneededtoadvanceinnovationdependongovernmentsupportandinvestment.Thepotentialrisktothisapproachisthatitwouldreducetheindustry’sinfluenceonthetimelinesandfinalproduct.
• Translateambitionsintoactivities.Thisstudyprovidestheframeworkforaninnovationactionplan,whichnowneedstobevalidatedandrefinedinconsultationwithindustryandstakeholders.Onthestrengthoffeedbackfromindustry,theambitionsneedtobedistilledintoconcretegoalsandtimelinesforimplementationsothatprojectsandactivitiescanbedeveloped.
• Measuringsuccess:Industryneedstodetermineifitispreparedtoestablishtargetsandperformancemeasurestomakesurethatinvestmentsininnovationareactuallyimprovingproductivityandperformanceanddeliveringbusinesstoconstructioncompanies.
3. Launch an innovation procurement initiative Asitstands,theprocurementprocessneedstobefixed.Therehastobeashiftfromacultureof“lowestbid”tofocusincreasinglyonqualityand“whole-life”value.Thefirststepisaprocurementprocessreviewtoidentifyoptionsforimprovingexistingapproachestoprocurement(particularlybypublicsectorbuildingowners),potentiallybasedoneffectiveprocurementmodelsfromotherjurisdictions
Althoughaprocurementreviewwilluncoverarangeofactionsthatneedtobetaken(notleastofwhichwillundoubtedlybetrainingforownersandpurchasers),somethingindustryleaderscoulddeveloprightawayisa“bestpractices”documentforpublicprocurementagencieswithclearguidelines,thatincludeadefinitionofinnovationandhowitshouldbedescribedandinterpretedinthebiddingprocess.
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There is more that can be done Therearemanyactivitiesthatneedtobetakenontobuildavibrantinnovationecosystem.Thepossibilitiesareextensiveandexciting.However,theyallstartwiththewillingnesstochangeandtheacceptancethatitisinthebestinterestofthebroaderindustryforbusinessofallsizestogetonboard.Toeffectmeaningfulchangewillrequirealong-termcommitmentandinvestment;resultsarenotgoingtohappenovernight.
Acomplete,prioritized,industry-supportedlistofprojectsandprogramswillcomefromdevelopingaformalindustrialactionplanthatincludesconcretegoals.Thefollowing“shoppinglist”ofsevenitemsillustrateswhatweheardfromsurveyrespondents,intervieweesandfocusgroupsandprovidesideasofwheretofocusinitialefforts.
1. Developandhost“meetingoftheminds”dialogues2. ConductmoreresearchintoKPIsandmetrics3. Explorestrategiestoimproveandcommunicateworkforcecapabilities,opportunitiesand
accomplishments4. LeverageRegionalConstructionAssociations’networksandcapabilitiestosetup“bestpracticeclubs”5. Developanintegratedprovince-wideinnovationnetworkandcentre6. InventoryestablishedR&Dassets(e.g.academicinstitutions,labs,trainingcentres,demonstration/
monitoringfacilities,prototypingandtestingcentres,andmanufacturingcompanies)7. DevelopaneducationandtrainingstrategyorientedaroundinnovationtoengageSMEs
BCiswell-positionedtotacklethechallengesthatlieahead;butaconcreteactionplanisneededtocoordinateeffortsandcatalyzeinnovationinawaythatismeaningfulforallconstructionbusinesses.Todevelopandimplementthisplanrequiresanindustry-widecommitmentandinvestment,butwillyieldsignificantbenefitsforBC’sconstructioncompaniesandtheprovinceasawhole.
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About the report TheConstructionInnovationProjectistheculminationofeightmonthsofresearchunderpinnedbyaprovince-wideconsultationprocesswithcontractors,consultants,ownersandstakeholdersinvolvedinalltypesofproject(fromhomerenovationstoaluminumsmeltingfacilities).Itlaysthegroundworkforacoherent,constructiveandsustainedconversationaboutinnovationthatincludesallstakeholders.Itattemptstoweavetogetherthecommonthreadsemergingindiscussionswithinandbetweendesignandconstructionbusinesses(largeandsmall),owners,researchers,investorsandpolicymakers.Ultimately,itcapturesthevisiontowardswhichtheBCconstructionindustryisstrivingtoachievesustainablebestpractice.
OurobjectiveistosummarizethecurrentconstructioninnovationlandscapeinBCandofferadefinitionofinnovationasitrelatestoconstructionsoBCCA,theRegionalConstructionAssociations(RCAs)andotherscanfocustheiradvocacyeffortsformaximumimpactandofferbestvaluetotheirmembersinthesechangingtimes.Indeed,theproject’scontinuedsuccessdependsnotonlyonbuy-infrombusinessesthroughoutBC,butalsoonstrongpoliticalandfinancialsupportfromthegovernmentanditsagencies.ItisthereforeaCalltoActionforbusinesses,investorsandstakeholderstoseizeonthegroundswellofinterestintheindustryandjointheeffortsunderwayinotherjurisdictionsandworktogethertobestexploittheforcesofchange.ItalsooffersindustryleadersandstakeholdersawaytoprioritizeeffortsandIdentifyhoweducationandappliedresearchcanbeappliedtoachieveavisionfortheindustry.
Wewanttokeeptheconversationalive:Forsome,thefindingsofthisstudywillraisemorequestionsthanitprovidesanswers.Ifitstimulatesfurtherconstructivedebatethenithasbeenasuccess.Asmuchasitisacatalystforthosewhoworkintheconstructionindustrytothinkaboutwhatthefuturemightlooklike,theambitionsproposedneedtobebroadlyacceptedandestablishedasaconcretevisionthatcanbeembracedandacteduponbyseniorleveldecision-makersfromacrosstheindustry.ThisreportpresentsanagendaforstrengtheningtheBCconstructionindustrybyenablinginnovation.Implementingthisagendawilltakesignificantresourcesandrequiresanindustry-widecommitmenttocollaboratingandinvestinginnewproducts,processesandbusinessmodels.
Acknowledgements ThisprojectwasfundedbyBCHousingandtheBCConstructionAssociationwithin-kindcontributionsfromBrantwoodConsultingandtheDelphiGroup.
ThisprojecthasbenefittedfrombeingabletoleveragethemomentumcreatedbytheCanadianConstructionAssociation’slaunchofCanadianConstructionInnovations(CCInnovations),whichhasbeensetuptoadvanceinnovationatanationallevel.Theyhavedoneanexcellentjobofmakinginnovationa“hottopic”formanyconstructioncompanies,largeandsmall.WewouldliketoextendourthankstotheCCInnovationsteamandtoAnibalValente,chairoftheCCA,fortheirparticipationandsupportforthisproject.WehopethatourfindingswillbeusefulastheyworktobuildacultureofinnovationacrossCanada.
Wewouldliketothankeveryonewhoparticipatedinthesurvey,focusgroupsandinterviewsaswellasBCCAstafffortheirassistanceandsupport.Wewouldalsoliketothankover30projectsupporterswhowrotelettersofendorsementtohelpussecurefunding.Finally,theprojectteamcomprisesHelenGoodland(projectlead,BrantwoodConsulting)withresearchsupportfromChrisLindberg(LindbergConsulting)andPaulShorthouse(TheDelphiGroup).TheBCCAConstructionInnovationCommitteeprovidedoversightandguidance.