CURRENT TRENDS IMPACTING ON CONSTRUCTION INDUSTRY PARTICIPANTS by lvs94353

VIEWS: 334 PAGES: 23

									               CURRENT TRENDS IMPACTING ON CONSTRUCTION
                 INDUSTRY PARTICIPANTS INTERNATIONALLY

1. Introduction

I want to make 3 deliberately outrageous statements to get your attention:
    • If you were able to resurrect a Victorian builder and place him on a South African
        building site today, he would feel perfectly at home;
    • Current architectural teaching reflects the pedagogy of the 19th century
        Academies of Britain; and
    • Herbert Baker would see no difference in practice in most of the architectural
        practices in SA.

If anyone disagrees with me at the end of this talk, please feel free to tell me so, and
why. Before I discuss this further, let us review the context in which we work.

2. Construction Industry Developments

The construction industry trades within a complex global environment that contains
significant contrasts. Whilst Third world infrastructure development is aimed at providing
basic needs and seeks to deliver self-sufficiency and wealth creation, the developed
world is focusing on getting more from an ageing existing infrastructure in terms of
efficiency and profit, and on enhancing quality of life and conserving the environment.

2.1 Construction trends in the USA

Construction in the USA is continuing to grow, supported by private and public
residential development that is showing its largest increase for a year in January 2003.
This healthy pace of homebuilding and private construction helped propel construction
spending during January to a seasonally adjusted annual rate of $877.9 billion.

Not surprisingly, many private sector owners are reassessing their processes and
searching for new ways to make their capital programmes more cost effective. Surveys
confirm that they are not satisfied with their contractor and designers’ partners’ progress
on such issues as productivity and technology.

Productivity in construction is the most frustrating issue for owners, especially when
compared to the technological advances made in other manufacturing industries where
technological advances double every couple of years. Construction technology, on the
other hand, is virtually indistinguishable from that applied 10 or 20 years ago.




Author: Llewellyn van Wyk, CSIR Building and Construction Technology
Source: www.csir.co.za/akani
2.2 Construction trends in the UK

A thorough study, titled ‘UK Construction 2010 – future trends and issues’, was
undertaken by CIRIA in August 19991. The study found that information and
communication technologies (ITC) will de-skill aspects of professionals’ work while new
business approaches such as partnering to supply chain management, will require
additional skills.

Interestingly enough, surveys2 have indicated that most UK contractors believe that
standardisation and IT together will not dispense with the need for traditional
professionals. They do not believe however, that construction professionals will be
project managers equipped to integrate all the processes involved in project realisation.

Insofar as demand is concerned, forecasts are that around 4.5 million additional homes
(comprising new and rehabilitated units) will be required in the next 20 years of which
the majority will be in urban areas. This equates to about 175,000 units per year: Current
production levels are around 150,000 units per year. Much of this will be for social
housing, and will have to be developed without absorbing more land.

The lack of cooperation between the parties in the construction process remains a
frustrating experience of owners: they require the traditional silos between owners,
designers, contractors and labour to be knocked down in order that efficiency and
productivity can be increased. Improvements in the upfront scoping and management
best practices have thus far not translated into improvements in the trowel and mortar
work on site.

Owners are now favouring the design-and-construct approach, as it is perceived to
break down the barriers between the contracting parties and foster dialogue.

Since this investment may involve projections of 20 years or more, PFI will alter the
emphasis placed on life-cycle considerations and lead to different design decisions.

Designers will need to focus on design life and whole life value. There is an absence of
design criteria to enable this. New commercial and domestic buildings will be designed
with greater allowance for flexibility and expansion to accommodate the changing needs
of companies and families. Many companies will move from a focus on new construction
to the optimisation of clients’ assets throughout their lives.

To do this effectively will require the industry to become more customer orientated. With
ever-changing markets, the industry will need to understand its clients if it is to meet their
developing needs.

Part of this understanding will include their objectives and values: construction will cease
to be about driving price down but adding value for the customer. The measurement of
this ‘added-value’ remains a challenge for the construction industry.
1
  Paul Simmonds and John Clark: UK Construction 2010 – future trends and issues, CIRIA
Funders Report/CP/65, Paul Simmonds & John Clark, CIRIA, August 1999
2
  CIRIA Funders Report CP/64


Author: Llewellyn van Wyk, CSIR Building and Construction Technology
Source: www.csir.co.za/akani
Facilities management is also emerging as a strong industry trend. Involvement in FM
and PFI schemes will enable longer-term client-supplier relationships to establish, as PFI
will emphasis value for money, whole-life costing and long-term performance
guarantees. I believe this is a huge opportunity for architects to remain involved in their
projects throughout its life-cycle.

In the UK the shift from new-build to the refurbishment of buildings has already
commenced and will grow relative to new build; more recycled and fewer primary
materials will be used. South Africa is showing signs of this, albeit in an unsustainable
manner. Shopping centres are being refurbished on a 7-10 year cycle.

Global markets, and developing countries in particular, are perceived to represent an
enormous construction market although it is recognised that even emerging markets
have a local and national construction capability. This will put further pressure on
competition for that work.

The UK industry has identified the opportunity in providing innovative professional
services including design, management, finance and operation, the management of local
labour and resources, and the introduction and transfer of novel, but appropriate,
technologies.

Increasingly construction will involve the management of processes and specialists
rather than the maintenance and deployment of large workforces. Construction will also
move toward becoming more of a manufacturing and assembly process.

The pressure on profit margins is expected to increase, driving specifiers to identify
materials and products that offer improved price performance. The search for quicker,
easier construction procedures will create increased demand for components and
systems that exploit lightweight and novel jointing technologies – polymers, adhesives,
sealants and engineering plastics. In Singapore this has given birth to the notion of
‘Buildability”. Developments in more advanced materials including super-critical concrete
or genetically modified timber may emerge as established industrial products in the
longer term. New materials, such as Titanium and carbon fibre, all feature in this
scenario.

Demand for these materials will be tempered by the demands of sustainable
development, forcing recognition of the contents and production of materials to factor in
embedded energy, water consumption, greenhouse gases, resource depletion, life-cycle
costs, etc. Traditional materials will come under increasing pressure to modify their
manufacturing and installation methodologies to satisfy and compete with the newer and
cleaner materials and products.

Safety and health considerations for both the constructor and the occupant will feature
prominently: materials offering increased protection from fire and health-related impacts
will receive preference, and be legislated for.

Materials will have to be able to be reused and/or recycled: this will force manufacturers
to investigate the dismantling and recovery of their products, and encourage the


Author: Llewellyn van Wyk, CSIR Building and Construction Technology
Source: www.csir.co.za/akani
specification of modular components and systems that can be recovered, again forcing a
move away from in-situ construction.

Security needs and anxiety will increase partly in response to crime and terrorism, and
partly in response to job insecurity and spiralling performance requirements. It is widely
anticipated that the current practice of a job for life will be replaced with multiple jobs,
even careers, with its implications for regional development and the housing market.
Individuals, households and communities will make greater demands on buildings and
the built environment to do more to promote a sense of well-being and personal security
(smart growth).

2.3 Construction trends in South Africa

The construction industry’s contribution to domestic product in South Africa is
significantly below that of the developed world. USA, Finland & Italy it is between 5 –
7%. Japan is 9%. RSA is 5,1%.

However, the real value added by the construction sector increased at a seasonally
adjusted and annualised rate of 2,5% in the second and third quarters of 2002. Roads
construction and the improvement of economic and social infrastructure provided the
basis for increased activity in the CE sector. Construction (civil and non-core civil)
accounted for R17,939 billion.

Residential construction and alterations to existing buildings also made some
contribution to the faster pace of construction activity but on a far less impressive scale
that CE. R12,440 billion spent on new developments in the housing market, up by 12%.
Each year about 10,000 new formal, or middle to upper income houses and 150,000
low-income houses are built in SA.
Private sector investment in non-residential buildings decreased by 1% to R12,405
billion with the biggest drop in office accommodation.

The number of building plans passed continues to drop, but the number of buildings
completed has returned to 1995 levels after decreasing for 5 consecutive years.
However, within the building sector, 86% of the number of contracts let, were for a value
of R5-million or less.




Author: Llewellyn van Wyk, CSIR Building and Construction Technology
Source: www.csir.co.za/akani
                                                   Between R20
                         >R50                       and R49 m
                         million                       3%
                                                                       Between R10
                          1%                                            and R20 m
                                                                           4%




                                                                       Between R5
                                                                       and R10 m
                                                                           6%



                                   <R5 million
                                      86%




3. Trends within the Built Environment Professions

BEP active in the built environment have been struggling for some time to come to terms
with a world that is increasingly shaping a new role for them. The agenda’s of
professional associations across the world are loaded with concerns about their
diminishing future role and a ‘lack of respect’ that society seems to have for their ability
and services. Much of this originates from the impact of the Industrial Age on the
traditional practices of the built environment professions and reflects the inability of the
professions to adapt their methodologies to the new post-industrial circumstances.

The following part of this talk analyses these impacts and trends.

3.1 Capacity

Attracting new entrants to the professions and to the industry is a major focus in many
countries in the world. The construction industry in the USA has a deficit of construction
workers growing by over 250,000 per year. Total job openings in the US construction
trades will grow from 4.6 million in 1998 to over 5 million in 2008. Not surprisingly, with
demand so good recent graduates are setting their own salaries. Re-thinking
Construction in the UK has set a target for the number of graduates it wants to achieve
within the next 10 years. I often get asked whether we have too many architects in SA?
If you take account of the infrastructure backlog of R172 billion, my answer is no.




Author: Llewellyn van Wyk, CSIR Building and Construction Technology
Source: www.csir.co.za/akani
3.2 Knowledge and Skills

The term knowledge management is gaining currency in contemporary society with the
understanding of how knowledge is gained, transmitted, exploited, and developed being
the subject of much research. Although IT can be of assistance, knowledge
management is not merely an IT issue. It is now widely acknowledged that culture,
people, and behaviours are central to knowledge management.

A characteristic of the built environment professions is its broad knowledge base.
Problem solving and maximising opportunities despite of the constraints of the project is
among the BEP skills most admired by customers. The current debate in international
circles about ‘generalist’ versus ‘specialist’ has severe implications on the continuation of
this ability to think broadly.

Insufficient knowledge has also been identified in the following areas:

•   Appropriate construction materials, components and technologies;
•   Capacity to apply appropriate assessment tools for the above;
•   Energy management;
•   Water management;
•   Safety management;
•   Building physics;
•   Materials science;
•   Contaminated land management;
•   Environmental planning;
•   Risk assessment;
•   Brief development;
•   Design management;
•   Documentation management and control;
•   Production Planning;
•   Information Technology Systems and Management;
•   Procurement; and
•   Sustainable Development Design Parameters.

3.3 Education and Training

Education and training is by definition the most fertile ground for instituting a culture
change required for construction industry development and enhancement. A review of
the outcomes of tertiary institutions is required and a realignment of outcomes to
explicitly place education in the context of a changing construction industry.

In the USA, for example, the National Architectural Accrediting Board announced its
intention in 2000 to study the elimination of the B. Arch. Degree, a move that has been




Author: Llewellyn van Wyk, CSIR Building and Construction Technology
Source: www.csir.co.za/akani
placed on hold due to vehement opposition by many parties. Nonetheless, some schools
are initiating radical changes to the curriculum “to meet the changing needs of practice”3.

There is a much larger debate taking place about how prepared graduates are for
entering the profession. Some practitioners believe that the accreditation requirements
have not yet caught up with the realities of increasingly complex practice. As the list of
professional services increases, so does the ability to introduce students to all the tasks
diminish. Most tertiary institutions therefore take the view that it is more important to
teach the student to learn, and expect that the practicalities of practice are learned on
the job. However, for this to occur, the professions must have the resources to facilitate
that learning, an ingredient absent when finances are restricted.

Some practitioners indicate that when hiring recent graduates they look for applicants
with strong problem-solving and computer skills and the ability to express ideas visually.
They are of the opinion that whilst in-house training can overcome the lack of knowledge
in some facets of practice, it can never be able to acquire that skill if the essential
academic training has not been done.

A requirement that is increasing among practitioners is the ability of the graduate to work
in teams, especially as practice is heading toward a more collaborative and
interdisciplinary nature. Educators are responding by placing more emphasis on group
work than ever before, and much of that work is interdisciplinary. Some schools have
established programmes that involve students from the arts and sciences, and public
policy and law, who collaborate on developing neighbourhood revitalization schemes.

Tertiary institutions must assume some of the responsibility for the industry’s woes:
graduates in each discipline are not encouraged to learn about related disciplines. It has
been suggested that teachers at tertiary institutions are not sufficiently comfortable with
their own knowledge of related disciplines and therefore rarely encourage students to
pursue multi-disciplinary paths. For one, tenure used to be granted on the basis of the
expert knowledge in a particular field: there is little motivation therefore, to reinvent
oneself after achieving this status. In addition, department’s budgets are based upon the
number of students in a specific discipline thereby forcing Heads of School’s to promote
study within that discipline.

Consequently, many graduates enter the workforce unprepared to integrate project
knowledge across disciplines and, of greater concern, show no desire to understand why
this would be of any importance. Often graduates are predisposed to suspect the
motivations of their colleagues in related disciplines – a practice that is usually further
exacerbated in the workplace.

The increase in popularity of delivery models such as Design-Build is having an impact
on the training of architects. Efforts are being made to equip them with the knowledge
and skills this system requires. Washington State University is now offering a design-
build emphasis for those pursuing a master’s degree in architecture in response to their
belief that more developers will choose this system as awareness increases because

3
 Daniel Friedman: Director, School of Architecture, University of Cincinnati, Engineering News-
Record, 21st October 2002


Author: Llewellyn van Wyk, CSIR Building and Construction Technology
Source: www.csir.co.za/akani
‘owners are looking for more of a collaborative approach’4. Interestingly enough, schools
are indicating that design-build studios have seized students’ imaginations.

International surveys indicate that generally practitioners complain that ‘the courses do
not adequately qualify students for the practical aspects of the job’’5. Industry is
requesting the architecture, civil engineering and construction schools to produce
graduates who have the skills that employers need and which will produce better
projects to meet the needs of the society.

There is a vigorous debate occurring within the international professional community
regarding the ‘generalist’ and ‘specialist’ approach to professional training and practice.
Surveys done within the United States indicate that architects are doing more and more
work upstream of the actual design process with some practices focussing exclusively
on this work phase. The perception is that the balance between ‘generalists’ and
‘specialists’ is not right.

It is likely that further specialisations will emerge from the all-inclusive professional
profile of current practitioners, particularly in the fields of general planners, project
managers, consultants for investors, project developers, energy consultants, heritage
facility consultants, web designers or business consultants.

3.4 Student enrolments & graduates

International evidence suggests that there is a marked decline in the number of young
people entering the built environment professions.

In Australia, whilst the number of graduates in B. Engineering increased by 93% since
1986, that growth slowed down to less than 2% between 1998 and 2000. The total
number of enrolled engineering and surveying students at universities in Australia
increased from 50,555 in 1999 to 50,850 in 2001. At the same time, whilst the student
intake in engineering has increased by 151% since 1986, the academic staff number has
only increased by 8% resulting in an increase of 77% in the student load.

As evidenced elsewhere, student enrolments in other fields of study exceed those within
the BEP: whilst both engineering and related technologies, and architecture and building
have increased by 13% and 27% respectively from 1993 to 2001, IT has increased by
61%, health by 16%, management and commerce by 58%, and law and legal studies by
a whopping 249% over the same period.

The following Table provides and International Comparison of the Percentage of
Tertiary Qualifications awarded by Field of Study, 1998




4
    Darlene Septelka: Special Report, The Spokane Journal Of Business, 12th June, 2002
5
    Building Culture in Germany, Ed: Prof. Dr. Gert Kahler. Berlin, December 2001.


Author: Llewellyn van Wyk, CSIR Building and Construction Technology
Source: www.csir.co.za/akani
Country




                          business and



                                            Engineering,
                                            manufacture

                                            construction


                                                               Health and




                                                                              Computing
                          sciences,




                                                               welfare
                          Social




                                            and
                          law
Australia                32,1               7,9                16,1           3,7
Germany                  25,1               20,1               14,5           3,1
Japan                    37,5               21,6               4,9            N/a
Poland                   38,4               15,1               3,7            N/a
United Kingdom           27,8               12,4               11,7           4,2
USA                      41,4               7,0                10,1           2,1

In both architecture and engineering the highest education qualification of the majority is
a Bachelor degree: 69,4% in the case of engineers employed.

There is concern too that many of the students in architecture and engineering do not
enter the professions after graduating. Companies like Arthur Anderson Consulting are
employing over 40% of the architectural graduates in the USA. Pricewaterhouse
Coopers LLP, which has a national engineering and construction practice in New York
City, extends some of the most tantalizing offers to graduates because they “do try to
have the best and the brightest”6.

A new employee with a bachelor’s degree in a construction-related field can start at
$50,000 or more and receive an annual bonus of $10,000, with an even bigger package
for a master of business administration with a bachelor’s degree in engineering.
Pricewaterhouse hires 4,000 to 6,000 new graduates annually, including 500 to 700 from
design and construction programmes.

So keen is the competition to get graduates, that recruiting takes place at the tertiary
institution long before graduation. “The recruiting cycle is: You don’t wait until they come
out with their diplomas in hand. That’s too late”7.

The result is the same universally: local consultants are struggling because they cannot
get enough graduates. Whilst there is some concern that this is just a phase, the overall
consensus is that, even if the economy slows down more, construction-related
graduates will continue to enjoy a strong job market because the supply is not meeting
the steady-state demand.

Some schools are launching new teaching innovations to keep the courses alive: Rose-
Hulman Institute in Indianapolis has implemented a teamwork approach with the
teacher-student relationship replaced by a mentor-apprentice relationship. Others are
investing heavily in hardware and software to expose undergraduates to the daily use of
computers.

6
    Evandro Braz: Partner Pricewaterhouse Cooper, ENR, 19th March 2002
7
    David Ferretti: Staffing Director, Swinerton Inc., ENR, 19th March 2002


Author: Llewellyn van Wyk, CSIR Building and Construction Technology
Source: www.csir.co.za/akani
Texas A&M University is one school among a growing number that have focussed on
integrating chemistry, engineering, English and physics curricula for new interns to tie
together what previously appeared to be unrelated subjects and even roadblocks to
academic survival. This same school credits curricula integration for reducing student
flight to other majors.

Research at teaching institutions remains a topical subject with some feeling that
construction lagging too far behind other industries. The tight profit margins and lack of
funding is seen as the main obstacle to increasing research. The amount of construction
research is acknowledged to be woefully inadequate with part of the problem being that
companies do not see a benefit in supporting more.

The construction industry in the USA spends less than 0,5 percent of total construction
value on research, whereas the pharmaceutical and aerospace industries spend up to
20 percent. Protagonists argue that tight profit margins should spur on research to
improve efficiencies that can improve productivity.

Situation in South Africa: more students graduated from Pretoria University with B. Com.
Accounting Science and B. Com. Marketing Management than the whole Engineering,
Built Environment and Information Technology Faculty.

3.5 Gender

International evidence indicates that the professions remain male dominated globally.

In Australia, the gender split for professional engineers in the employment sector was
93,3% male and 6,7% female in 20028. Engineering has the lowest female share of any
broad field of study in Australian universities with only 15,3% of total student enrolments
in 2000 (includes both undergraduate and postgraduate data). The nearest field of study
in terms of participation is Architecture and Building with 38% of total student
enrolments, ranking second after agriculture, animal husbandry in 2000.

However, the percentage of females constituting the number of engineering completions
has increased from 7,1% in 1988 to 16,1% in 2000. This is still way behind fields of
study such as veterinary science and law where the enrolment figures are roughly equal.

A survey done by Engineering News-Record in the USA on the civil engineering schools
indicates that women undergraduates are still a distinct minority on every campus,
although inroads are being made at some universities.

South Africa is fairing much better in this regard with women representing nearly 50%.
This is likely to have implications down the line, as child-rearing creates small home
practices.



8
  Steven Kryger and John Agnew, The Engineering Professions: A Statistical Overview 2002. The
Institution of Engineers, Australia. Second Edition, 16 July 2002


Author: Llewellyn van Wyk, CSIR Building and Construction Technology
Source: www.csir.co.za/akani
3.6 Age

As experienced elsewhere, the age profile of the professions is changing. In Australia,
the highest number of those in engineering and architecture and building is in the 55-64
age group. South Africa is much the same.

3.7 Remuneration

The lower levels of remuneration for built environment professions are often cited as one
of the primary reasons for their alleged poor performance. A comparison of remuneration
levels among the built environment professions to that of other professions such as IT,
Law, Medicine and Accountancy, reflects a decided imbalance. $46K for architect,
$115K for surgeons. A similar study is being done for SA at the moment.

3.8 Integration

In 1995 GlaxoWellcome developed Fusion: a collaborative approach to working in
partnership on construction projects. The approach was based on ethical and equitable
values that created projects in which everyone could perform in a rewarding
environment. Projects completed using this philosophy have delivered flexible and
adaptable facilities on time and on budget, to the complete satisfaction of the end-users.
They not only met the original needs, but were also able to incorporate changing
requirements throughout the life of the project. All of this was achieved in a culture of
mutual support and encouragement, innovation and enjoyment, with profit being made
by each party.

The traditional delivery method of an architect designing the building and then awarding
the construction contract to the lowest bid is changing to one where the architect and the
contractor collaborate from conception to completion. This enables both parties to
foresee problems at an early stage. One argument supporting this system is that it takes
less time leading to cost savings for the developer.

Another reason it is favoured is that it avoids the situation where the parties blame each
other for delays or unexpected cost overruns: this can lead to snags, further delays and
even litigation.

3.9 Business Performances, Practice and Good Governance

Some commentators in the UK are forecasting a polarisation of professional firms into a
few large multi-disciplinary businesses at one end of the spectrum, and smaller more
specialist and works-orientated consultants at the other. They also expect to see a
rationalisation within professional firms that result in an increase in the number of
integrated design and construction companies. Throughout, the emphasis will be on
adding value to the customer and taking unnecessary costs out of the process.

The fee income results for UK practices reveal that the top earner in 2001 was the
multidisciplinary practice of the Babtie Group, with a fee income of £110 million, an
improvement of £15 million over 2000. The second best performer was also a multi-


Author: Llewellyn van Wyk, CSIR Building and Construction Technology
Source: www.csir.co.za/akani
disciplinary practice, offering services across design, construction, engineering and
property.

It is anticipated that full-time permanent employment for many professionals may end
earlier than is the current practice. In many circumstances the wisdom of a 50-year old
may not be sufficient to outweigh the lower costs and greater energy of a competent 35-
year old. For many professionals the only option therefore will be low-level, part-time
consultancy work where their experience can be harnessed with the energy of youth.
This practice model is likely to result in professionals continuing consultancy work for
over 20 years especially as welfare provision and pensions reduce.

Current management theory predicts that more companies will be positioned as hub
organisations with a few permanent staff undertaking critical and strategic roles, and
calling upon third parties to perform other functions and specialist services on an ad hoc
basis. Technology facilitates collaboration a cross organisations with people based in a
variety of locations. This could possibly become the practice in construction as well.

Briefing and concept design will need to be based on explicit calculations of the client’s
financial and economic situation; and will need to take a life-cycle perspective as a
matter of routine. Simulation – typically using IT – will become commonplace to enable
clients to explore a variety of scenarios against the backdrop of accurate and assessable
data on both construction and operating parameters.

The idea of responsive design is emerging as a new trend. Evidence from other
industries that have gone through this transition indicate that while design and other
professional services may have become more important to the functional performance of
buildings, there is likely to be a re-organisation and rationalisation of the design process.
The emphasis will be placed on massively increased design and engineering inputs to
new products that will be used in a more repetitive manner. Intensive design should see
significant improvements in building performance across the board, while the
concentration of design on generic products will increase industrial efficiency. Design
and build is likely therefore to become the dominant approach in most commercial and
industrial work.

The implications for practitioners generally will be greater design intensity,
requiring explicit calculations, whole-life perspectives and using IT to do scenario
designing using sophisticated modelling and visualisation packages. The main
technical trends being envisaged in architecture are driven by continued improvements
in the price performance of information and communication technologies, and its
widespread diffusion. All designers are likely to use CAD and growing number will use
sophisticated modelling and visualisation packages through which they will design, build
and operate a building or structure as a simulation exercise – virtual reality – which is
expected to improve the performance of buildings.

Self-build is a growth point and many German, US, Australian and New Zealand
companies offering packages. Most of those with an international presence have
targeted specialist niches, usually at the upper end of the price spectrum. The system




Author: Llewellyn van Wyk, CSIR Building and Construction Technology
Source: www.csir.co.za/akani
may however lend itself to flat-packed houses sold through catalogues as at least one
retailer is already investigating.

A noteworthy trend in the UK is the diminishing ratio of qualified architects as a
percentage of total UK staff: the architectural practice of WS Atkins, rated as the practice
with the highest number of staff at 11,706, has 1 qualified architect as a percentage of
total staff. The emphasis throughout these practices is on adding value to the customer
and removing unnecessary costs and waste.

Factors influencing this view include an ageing population and a fully urbanised
population. A sector that has been identified for future growth is the rehabilitation of
existing buildings: change of use, and/or upgrading of environmental and social
performance are urgently required to the vast stock of existing buildings.

In Germany, half of all expenditure on building is already being funnelled into this stock.
A similar situation exists in the USA where $11.4 billion was spent on school
modernization in 2001, including the need to upgrade buildings to accommodate new
technology.

Regrettably, the construction industry remains confined to doing ‘business-as-usual’
including shifting as much of the risk as possible onto others in the supply chain. Most
industries have undergone significant transformations over the past three decades
resulting in substantial improvements in the value of their products and services.
Automobile manufacturers, for example, have reduced their concept-to-production cycle
from six years to fourteen months.

Paul Teicholz, the retired Director of Stanford University’s Centre for Integrated Facility
Engineering, wrote in late 1999, “A building that took 1,000 hours to construct in 1964
would have required just 552 hours in 1998 had the industry achieved the same
productivity increases as the rest of the non-farm sector. Instead, that building would
have taken more than twice as many hours: 1,185.”

Engineering News Record recently projected that delays and project overruns may
approach $200 billion of the $700 billion U.S. commercial construction market. Whilst we
do not have such detailed information available to us in South Africa, the order of the
overrun is probably much the same, if not worse.

Construction projects rely upon a variety of disciplines containing poorly integrated silos
of knowledge. The current fragmented processes create enormous inefficiencies that
result in substantial delays in delivery times and abortive costs. Generally the cause of
these delays and cost overruns can be found in the poorly coordinated and incomplete
information that constitutes contract information. The industry standard for completed
documentation before contract commencement in the USA is 70%. However, it is not a
question of improving just the quantity of the information getting through in time, but the
quality.

The inefficiencies are in many instances a direct result of each firm placing greater
emphasis on protecting its own viability rather than on improving the viability of the
project. Consultancies usually place enormous effort on getting the project within budget


Author: Llewellyn van Wyk, CSIR Building and Construction Technology
Source: www.csir.co.za/akani
as early in the design process as possible, but once this is achieved, switch their efforts
to completing the documentation in the shortest possible time. Often this is as a result of
unrealistic time constraints and tight fee structures that they are subjected to.
Nonetheless, considerable value enhancements may be hidden by the fact that many
primary design parameters have been set – and therefore the majority of the major costs
as well – before an accurate cost estimate can be completed.

Given all that has been stated above, the designer will be extremely reluctant to
fundamentally redesign once this point has been reached. Nor is there any incentive to
do so. In most instances, the basic design will be retained but with the scope of work
drastically reduced whereas accurately integrating a cost analyses across multiple
design parameters may well have saved both.

Consequently, each discipline performs a variety of wasteful activities within their own
disciplines in documenting the project. In other words, built environment professional
practices streamline their own businesses around wasteful project delivery practices,
such as:

•   Plans and specifications are insufficiently coordinated and are rarely completed
    before construction commences;
•   Shop drawings are used to complete the design during construction;
•   Variation orders are frequently a result of the user’s inability to read 2D drawings;
•   Drawings do not incorporate recent changes in manufactured components; and
•   Most value engineering evolves into a scope reduction effort and rarely takes into
    consideration related impacts on design.

Perhaps the greatest barrier to change lies in the fact that margins in each discipline are
insufficient to permit firms to invest in better tools and procedures. Furthermore, the
fragmented nature of the industry combined with the usual, one-time project experience
between firms, does not generate sufficient profit or other incentives to invest in long-
term innovations.

Nonetheless, the construction industry has many lessons to learn from both the
aerospace industry and the motor industry. The briefing process, for example, has long
been recognised as problematic in the construction industry. The process of delivering
the functional requirements of complex clients is widely misunderstood and frequently
poorly managed. The elicitation and delivery of client requirements has a similarly patchy
track record within the aerospace sector. In response to these long-standing problems,
new approaches to delivering client requirements have been developed in both sectors.

In aerospace, the techniques of requirements management (RM) are increasingly central
to best practice. RM offers a disciplined approach to the process of capturing and
managing client requirements. Client briefing is increasingly recognised as a learning
process based on knowledge creation.




Author: Llewellyn van Wyk, CSIR Building and Construction Technology
Source: www.csir.co.za/akani
3.10 Globalisation

Globalisation is a fact of life: the Chatham House Forum foresees that more than 80
percent of goods and services (proportion of world GNP) will be traded across national
borders by 2020 from a current level of around 30 percent (OECD). The prediction points
to a widely anticipated trend that constructors will need to understand: economies will
become increasingly open to foreign competition.

In the past, international activity has been concentrated on a small number of very large
contracting organisations and consultants: the UK’s top consulting engineers’ exports
account for 30-90 percent of turnover. In the future, the combined pressures of
standardisation and industrialisation may lead to an increase in the volume of
construction services (design and engineering as opposed to materials and products)
that will be traded internationally.

A key impact of globalisation is the fluidity in the skilled labour market with well-educated
and highly trained people able to move to any destination they wish.

The problem associated with a loss of highly skilled people is not unique to South Africa,
nor is it unique to developing countries. Developing countries, though, are the least able
to cope with the consequences.

Australia and Canada find themselves in the same situation insofar as the loss of highly-
skilled people are concerned: Canada’s experience is that membership of the North
American Free-Trade Area has opened the door for a stream of southbound migrants.
These countries also find that immigrants use them as entrepôt countries, acquiring
citizenship and education before moving on to the largest and richest job market in the
world.

As migrating is expensive it is those can afford to emigrate that do – and they are most
likely to be the highly skilled and better educated. A study for Britain’s Department for
International Development found that three-quarters of Africa’s emigrants have higher
(tertiary) education, and roughly half of Asia’s and South America’s. Of the 1 million
people from India living in the US, more than three-quarters of those of working age
have a bachelor’s degree or better.

Some argue that the problem appears worse than it is as many return, and when they
do, they do so with enhanced skills. They also point out that in most instances migrants
send significant sums of money back to their country of birth. Officially reported
remittances alone are were about 20 percent more than official development aid
between 1989 and 2000.

3.11 Information Technology Developments

Dramatic developments are expected within the field of Information Technology.
Information Technology Trends (ITT’s), such as widespread use of simulation – including
modelling and virtual reality – offer far more robust design and specification
opportunities. The problems associated with interpreting two-dimensional design and


Author: Llewellyn van Wyk, CSIR Building and Construction Technology
Source: www.csir.co.za/akani
construction drawings are mentioned elsewhere. Rapid growth in at-a-distance
transactions (client-practice and practice-practice information exchange) will impact
upon the documentation method and content.

Significant growth in teleworking and home working is already taking place. With this
trend has come a decline in the number of people employed caused in part by the
inaccessibility of many home locations, and the employment of CAD.

Electronic process and communication will become the norm, with supply-chain
management principles in common use on larger jobs whereby the industry’s margins
can be assured while delivering a lower-cost, higher-quality product. The process will not
be restricted to capital project delivery alone but will include the whole process from
inception to whole-life occupation.

However, as technology develops and products proliferate, the professionals need to
upgrade their software and train their staff to stay abreast of the latest technology. This
is particularly true of young graduates: budgetary constraints in tertiary institutions have
resulted in students not necessarily keeping abreast of the latest technology in their
fields. Given the problems surrounding in-house training and mentoring expressed
earlier, this places them in a disadvantageous position.

Although the uptake of web-based collaborative extranets by the construction industry
has been slow, the growth in partnering style projects and greater inputs by companies
in the supply chain has led to increasing interest in their use. They are able to create a
cost effective knowledge base across entire projects teams to facilitate communication
and sharing of information online and in real time.

Electronic Document Management Systems (EDMS), electronic records management
systems, scanning systems and filing systems have all proliferated, but the leading
systems now allow effective management of both paper documents and electronic
information.

Information and Communication Technology (ICT) based information exchange in
project-based business, such as construction, may not be properly covered by
contractual practices and this situation will need to be addressed by those wishing to
pursue this technology. A framework needs to be defined for legal conditions and
contracts regarding the use of ICT in project business.

Consultants need to take into account the growing demand for and use of technology in
both new buildings and the upgrading of existing buildings. Some 96% of new high
schools being built in the USA in 2002 were wired with fibre optics or high-speed cables
for computer networks.

Information and communication technologies likely to find their way into buildings
include items such as intelligent windows to wholly automate building
management systems.




Author: Llewellyn van Wyk, CSIR Building and Construction Technology
Source: www.csir.co.za/akani
Predictions in the UK are that standardisation and advances in IT will allow the
construction of models of the whole process, from land acquisition to demolition, which
can be applied anywhere in the world. The models will be multi-dimensional and will
represent all issues including social, environmental, economics and political as well as
technical allowing the participants to know everything about the project before
commencing it.

Among the technology issues is making better use of information and knowledge,
particularly making use of the information available on a project and extracting the
usable knowledge to make informed decisions. Owners are requiring contractors and
designers to provide them with the information necessary so that they can make
informed decisions.

Of the other anticipated advances, in both materials and technologies, standardisation
will be the most significant. Standardisation is not about providing standard products and
solutions; it is a step toward modular design. Clients will still demand unique solutions,
with standardisation helping the industry deliver this cost-effectively. A good analogy is
the automotive industry: more and more models within a manufacturing group are
sharing a common platform.

3.12 Innovation

One of the charges levelled at the construction industry is its poor record of innovation
when compared to other manufacturing industries such as aerospace or electronics.
Innovation in this context is taken to mean change: change in the product or service
being provided, or change in the process by which the product or service is created.

The industry has had periods in the past when it was very innovative: the building of the
great cathedrals of the 13th century saw structures being erected that were far higher,
slender and lighter than undertaken before. Remarkably, this work was undertaken
without the means of analysis available to contemporary designers.

The advent of the Industrial Age once again saw the development of hitherto unknown of
structures with new materials and technologies.

However, the rate of innovation has slowed, and there are reasons for that.

Firstly, innovation is driven by unremitting pressure for change, for something new. One
of the most important factors for innovation is the provision of stimulus. For example,
some manufacturing industries, such as the motorcar and aerospace industries, survive
by replacing their products with a new and more efficient one each year. The
construction industry, due to the permanence of its product, does not have that
opportunity.

Secondly, innovation occurs when intelligent, highly motivated and bright people apply
their minds to the challenge. The construction industry is struggling to maintain its
existing skills base, let alone attracting a new generation of young people of high ability.
Construction is not perceived as being at the cutting-edge of technology, a pre-requisite


Author: Llewellyn van Wyk, CSIR Building and Construction Technology
Source: www.csir.co.za/akani
for naturally innovative people who are drawn to new ideas, new technologies, and
novelty.

Thirdly, the industry has not invested in factors that favour innovation nor has it relied on
a culture of innovation to survive. The industry has not made a marketing virtue of
innovation, partly because this opportunity is not open to it.

Fourthly, innovation only occurs when you can find investors to fund it. The construction
industry is reliant on funding from financial institutions who view its products provide the
security for the loan. This conservative practice tends to favour tradition rather than
innovation.

Fifthly, innovation takes place in companies where management establishes conditions
conducive to it, such as open lines of communication; flexibility; a risk-tolerant climate; a
knowledge-friendly culture; an environment where people feel valued; and a climate that
promotes job security. The latter factor remains and will remain illusive until the volatility
of the industry is removed.

Sixthly, many manufacturing industries rely on market research to get feedback on their
products. The input from this feedback stimulates the generation of new ideas through
innovation. Similarly, brand loyalty is established through cultivating a long-term
relationship with the customer. This practice is totally absent in the construction industry
where customer opinion is not measured either before or after the delivery of the
product. This is of course not the sole fault of the industry where, in most instances,
repeat-business is not the norm.

Nonetheless, rethinking construction and viewing it with new eyes will reveal many
instances where innovation is highly possible. The need for review and innovation is
frequently voiced in the discussion about the quality of service and of improving the
quality of the built environment.

There are notable instances where commissions are going to practices that are able to
demonstrate an ability to provide new solutions to existing and emerging problems.
These companies are seeking innovation in everything they do. Increasingly companies
are positioning themselves as innovators in their sector to maintain or grow market
share. This association as innovators is required to be expressed in their physical
structures as well.

The explosion in the development of new materials and technology may just be the
driver for the unleashing of another age of innovation within the construction industry. If it
is, it would pose a challenge worthy of people of the highest calibre. The industry,
however, will need to project itself as an industry providing challenge.

Historically, industries have had to become innovative to survive: perhaps the current
state of the industry world-wide places it in that position now. If it does, regulation that
promotes conservatism rather then innovation will need to be removed, the industry will
have to commit itself to far more intensive levels of research and development; and the
industry will need to commit itself to performance enhancement at all levels, including
responsible environmental construction.

Author: Llewellyn van Wyk, CSIR Building and Construction Technology
Source: www.csir.co.za/akani
3.13 Demand for Quality

Industry performance, particularly with regard to customer service, quality and latterly
environmental awareness, is increasingly featuring on the agendas of industry leaders
and policy-makers: for most of the 1990’s, the construction industry has been receiving
unprecedented attention from industry participants and government alike. In the UK, the
Egan Task Force9 drafted a vision for transforming their construction industry that enjoys
the status of a White paper. In addition, both the Strategic Forum for Construction,
chaired by Sir John Egan10, and the UK Department of Trade and Industry11, have
released documents reviewing the industry. The Scottish Government has released a
‘Policy on Architecture for Scotland’12 and the German Government has just released a
Status Report on ‘Building Culture in Germany’13.

These reports all share a common theme, and that is to enhance the role of the industry
in promoting economic growth and delivering improved industry products. The latter
objective is of particular relevance to the BEP inasmuch as it deals with better public
buildings and public spaces.

The increase in the proportion of major contracts that are being let using forms of
procurement – such as design-build-finance-operate (DBFO) or Private Finance (PFI) –
in the UK may be another major impetus for change. The experience of this stronger
connection between construction and the operation of the building and facility is
expected to cause engineering professionals and contractors to elevate innovation, life-
cycle costs and building use to the status of design parameters.

The future of construction for the next ten years at least will be about industrial
restructuring and re-engineering of the various processes to achieve improved quality
and performance through the integration of project process, management of supply
chains and so on. Over the longer term, this change may bring more stable demand and
a more consolidated industry where the majority of practitioners use good practices most
of the time.

3.14 Value

In order to understand the nature of the demand for physical infrastructure and
professional services in the future, we need to understand who the customers are likely
to be and the nature of their expectations, businesses or operating environments. Even
in South Africa, major construction industry customers now have global businesses and
reference points: they are better informed (more so than many service providers) and
more demanding of construction services and products. It will be a condition of
appointment that the relationship deliver added-value to the client’s downstream
operations and, on occasion, to share the risks – and returns – involved in those
9
   Sir John Egan, Rethinking Construction. The Report of the Construction Task Force, 1998
10
   Sir John Egan, Accelerating Change. A Report by the Strategic Forum for Construction, 2000
11
   Sir John Fairclough, Rethinking Construction Innovation and Research. Department of Trade & Industry, 2002
12
   A Policy on Architecture for Scotland. Ministry for Sport, the Arts and Culture, 1999
13
   Prof. Dr. Gert Kahler, Status Report on Building Culture in Germany. German Ministry for Transport, Building and
Housing, December 2001.


Author: Llewellyn van Wyk, CSIR Building and Construction Technology
Source: www.csir.co.za/akani
ventures. Customers will, in short, expect their service providers to understand and meet
their objectives. A crucial part of the objectives will be to get their assets to deliver more
value. This insistence on better value for money and quality will trickle down to
occasional and individual householder clients as well. Life-cycle costs and the
enhancement of health and safety are all being included in their assessment of value for
money.

3.15 Sustainable Development Imperatives

International experience – particularly in the EEC, Australia, and more recently in the
USA – confirms that commissions are increasingly requiring practitioners to be fully
committed, both in terms of skill and capacity, to integrating fully the principles of
sustainable development into their projects.

Sustainable development principles are increasingly being employed in projects in the
USA, thanks to a growing track record of success, a proliferation of government
incentives and grant programs and honed marketing strategies. Projects include
schools, industrial plants and even complete communities. Institutional and investor
resistance to environmentally responsible development has so eroded that the
"greeners" of America are predicting that ‘in a decade or so, environmental construction
will simply be a matter of course’14.

Almost all commentators refer to the widespread and profound changes that will be
pursued during the coming decades in order to protect the environment.

Construction activity is a consumer of materials and scarce resources (water and
energy), is generally a contributor to global warming emissions (including CO2 from the
burning of fossil fuels), contributes to air pollution (smoke and dust pollution), generates
vast quantities of waste, contaminates the soil, destroys existing vegetation and alters
the characteristics of both the natural and built environments. Accordingly government,
and increasingly users and neighbours of facilities, are demanding that these impacts on
the quality of their lives be reduced through legislative and other means.

Owners too – particularly those who have adopted a strong social and environmental
corporate image – are feeling empowered by a notion that enables them to express and
enforce design objectives that supports their ‘green-and-caring’ image. Emphasising
sustainable design practices includes the added value of associating with the new as
well as achieving a better picture of how their building will perform over its life cycle.

Notwithstanding the pressure for profits, increasingly today’s consumer and shareholder
is no longer satisfied with the single bottom line approach to corporate governance. In
the developed world, consumers and business partners favour companies and products
that are socially and environmentally responsible. Critically, public involvement in
government and business affairs is rising. Companies’ failures to perform responsibly
are publicly highlighted and could erode corporate reputation and harm the company’s



14
     McGraw Hill Construction: Engineering News-Record, 29th April, 2002


Author: Llewellyn van Wyk, CSIR Building and Construction Technology
Source: www.csir.co.za/akani
competitive position. The wave of corporate governance scandals in the US will cost its
economy $35bn, and take 0.34 percent off gross domestic product in a year.15

Population pressure on the natural resources of our environment has been the focus of
the United Nations for over 20 years. Agenda 21, adopted at Rio de Janeiro, addresses
‘the pressing environment and development problems of today and also aims at
preparing the world for the challenges of the next century in order to attain the long-term
goals of sustainable development.”16
This approach has been captured in the concept “sustainable development”, which is
defined as “…development that meets the needs of the present without compromising
the ability of future generations to meet their own needs”.17

Sustainable development poses many challenges for construction and civil engineering
including the realisation that many of the structures being erected now will still be in
service in 2020 when it is expected that widespread environmental impacts will begin to
manifest themselves. Given the marked climatic and temperature changes projected for
countries like the UK over the same period (20% reduction in heating degree days and
80% increase in cooling degree days) design criteria will need to change soon. A second
example is the increased opportunity for the construction of renewable generating
capacity. It requires that the developer’s team spend more time on planning and design
and on getting the community involved.

Sustainable development imperatives are recognised as a major determinant of industry
performance in the future: the CIRIA Study acknowledged that the public was becoming
more aggressive in its advocacy of certain green and socially desirable practices. It also
recognised that people are becoming more socially empowered and that industry will be
forced to become more appreciative of their customers and more considerate about the
effects on third parties.

Significant changes will have to be introduced in the area of energy provision and indoor
temperature regulation. The UK has a target to provide 10% of national electricity from
renewable sources by 2010. This is likely to be dominated by new and enlarged wind-
power installations in remote areas rather than solar photovoltaic that are less effective
in the UK’s climate. Façade engineers expect that cladding with integral solar PV will be
viable for commercial buildings in southern England. Indeed, some commentators
predict that solar PV will do for electricity what PC’s did for computing in the 1980’s and
90’s, with local power generation supplanting central power stations to a large extent.

A second area of significant development will be in the minimising of waste and the
recycling and reuse of construction waste. The current consumption balance of 90% raw
materials and 10% recycled and secondary will of necessity change.

There are financial benefits to sound environmental management: capital costs are now
generally or about the same, but by spending about 5 percent more you can deliver a



15
   Financial Times, September 5, 2002
16
   United Nations Agenda 21, #3.
17
   World Commission on Environment and Development, 1987


Author: Llewellyn van Wyk, CSIR Building and Construction Technology
Source: www.csir.co.za/akani
100-year building, rather than a 50-year building. Environmentally responsible projects in
the USA are showing two-and-a-half to three times the expected profits.

In the end, the general public’s interest in healthier living environments, improved indoor
air quality and a growing awareness of the cost and scarcity of energy and water
resources will all serve to increase their demand for environmentally responsible
construction. The market – a key driver of the real estate industry – is demanding high-
performance, healthier and green buildings.

Water procurement and water management is emerging as a fundamental determinant
of the continuation of all life-forms on this planet: one can expect greater scrutiny of
water consuming devices in all facets of contemporary living, and a greater focus on
greywater harvesting and reuse. Pressure will be exerted on switching water consuming
devices, such as sanitation, to a waterless system. The development of these new
products, together with their use in retrofitting, poses huge new markets for the industry.

The cost of remediation is being noted as a trend that is shaping business: waste and
emissions represent lost value, business costs, a threat to present and future human
generations and to ecosystem health. Liability laws are increasingly placing the costs of
remedial work arising from these impacts on the polluter, past and present.

The development aspirations of the third world countries, particularly in terms of mobility
and energy demand, will create significant environmental pressures. The role of the built
environment professions is not to ignore these basic rights, but to make sure that they
are delivered in the most appropriate way. This includes delivering infrastructure that not
only meets needs, but also safeguards the environment.

Developed countries exist within a different framework to that of developing countries
and are subject to other political imperatives. For example, at a macro level, the recent
focus on sustainable development as an umbrella for environmental protection,
economic development and social equity is one that is challenging all industries, not just
construction.

Land utilisation is already an important issue for many developed countries and is
becoming an issue in many developing countries. One can expect that legislators will
enforce development models that conserve green spaces, encourage the redevelopment
of previously contaminated land, and demand better space utilisation.
Increasing demand for new housing will increase the pressure for land: in response,
governments will resist any further development of Greenfield sites, whilst local
communities will demand that new developments not compromise their standard of
living. As a result, a greater proportion of new-build building work will be carried out in
locations where conditions are difficult or compromised, from contaminants to restricted
access to congested transport arrangements. In addition, the nature of the work will
increasingly comprise alteration and renovation work under a general urban
regeneration programme. Local construction factors of noise, disruption, employment,
and social upliftment will come under sharper scrutiny.

In a bid to reduce the impact of the private motorcar, new developments will integrate
work place, home, shopping complex and entertainment into a new building type.


Author: Llewellyn van Wyk, CSIR Building and Construction Technology
Source: www.csir.co.za/akani
4. Conclusion

I want to end with special emphasis on the following: throughout this talk I referred to
improving the quality of life. SMART GROWTH is the most influential civil movement in
the United States. Voters in the last US elections elected scores of candidates dedicated
to countering sprawl and improving quality of life. Integral to this, is advancing
community values. This was a central thrust of the UIA Conference in Berlin as well:
local culture and tradition.

For architects to have a future, they need to tune into real cultural values – not the
pastiche of so-called added value of the imitative architecture that is being churned out
at the moment. We, more than any other profession, must find and provide meaning – or
what Ivor Prinsloo referred to as Architecture of Experience; architecture that is relevant
and defines what quality of life is all about.

Perhaps, that’s another breakfast.




Author: Llewellyn van Wyk, CSIR Building and Construction Technology
Source: www.csir.co.za/akani

								
To top