Guest author: Keith Waller, Programme Director at the Construction Innovation Hub.

Transforming construction and the shift towards social value, net-zero carbon emissions, data and platform construction

A game-changing shift is taking place in the construction industry. The extraordinary difficulty of COVID-19 has created new urgency in our drive to transform construction, accelerating both the pace of change within the sector and our appetite for it.

The UK government’s Build Back Better initiative highlights a move away from our long-held and narrow focus on efficiency. Instead, we're beginning to turn towards much broader value outcomes: increased safety, net-zero carbon emissions, improved build quality, social value and more. We want to create a better future for our built environment, one that benefits both people and the planet. However, to do this we’ll need to transform not only our approach, embracing new, MMC methodologies such as Design for Value and Platform construction, but also the way we work together across the public and private sector. Collaboration will be key to success, as we begin our journey reshaping construction into an industry fit for the future.

The rise of the Construction Innovation Hub

My journey in government began in 2010. I was involved in the nuclear sector when I was first approached to be an advisor in the UK Government Department of Energy and Climate Change. I quickly transitioned to a forerunner of the Infrastructure and Projects Authority where I spent nine years in central government before taking on my current role as Programme Director for the Construction Innovation Hub, with the aim of delivering the Construction Sector Deal. I’ve worked through three different governments - Labour, Coalition and Conservative - but through them all there has been an increasing focus on the importance of infrastructure and transforming construction.

One thing I’ve noticed through this period is that we tend to think of ourselves in the engineering community as being innovators. We think we're quite good at working out what needs doing, but actually, the real skill, and one of the biggest lessons I’ve learned during my time in government, is that working out what to do can be quite easy. It's working out how to get it done that becomes hard.

At present, our focus is on transforming construction into a more future-facing sector. We need to ask important questions about how to make it more inclusive and representative of the society it serves.

To begin, it’s essential to recognise that we can’t achieve our goals working in isolation. Problems like carbon emissions, poor build quality, labour shortages and the housing crisis - they can all be improved if we collectively refocus our energies and unify our processes. The creation of the Construction Innovation Hub is a response to this need. The Hub aims to overcome the industry’s current fragmentation and adopt a new, data-driven, industrialised construction approach. The goal is to harmonise, digitalise and rationalise demand across industry projects and programmes. By creating standardised products and components, driven by Design for Value principles and Platform construction methodologies, we can harness the benefits of manufacturing and DfMA for the good of the industry and wider society.

The role of the Transforming Construction Challenge

The Construction Innovation Hub is funded through UK Research and Innovation (UKRI) and the Construction Sector Deal as part of the Transforming Construction Challenge. The Challenge aims to speed up the changes paramount to our future success, embracing manufacturing techniques, both in the supply chain and on-site, as well as expanding the use of digital technologies to foster project efficiency, design, feedback and assurance.

The goal of the Transforming Construction Challenge is to use construction technology and DfMA to maximise the whole-life value of assets and to deliver those broader social value, environmental and economic outcomes we seek. The Construction Innovation Hub focuses on these key themes, as it seeks to address the way buildings and infrastructure are procured, designed, delivered and operated with the context of a Design for Value approach.

Industry partners

The Hub works collaboratively with industry, government, academia and partners. These include the Manufacturing Technology Centre (MTC), the Building Research Establishment (BRE), the Cambridge Center for Digital Built Britain (CDBB), and other industry partners, including tech-powered design firm, Bryden Wood. Jaimie Johnston, Head of Global Systems at Bryden Wood, is The Construction Innovation Hub’s Design Lead and the author of the definitivebooks on Platform construction. The Hub’s collective vision is to build more safely, to a higher quality and with all round better value. In other words, the Construction Innovation Hub asks, how can we get more from UK construction, and how can we do it in a way which supports the industry to prosper and grow?

Shaping the future of construction with a collaborative, P-DfMA approach

The reality of transforming construction presents a serious challenge, one which requires a uniquely broad and long-term viewpoint. As a result, the initiative really must be headed by a government client. This is why the Infrastructure and Projects Authority (IPA) set out their vision for a Platform construction (P-DfMA) approach, focusing on digitally driven, standardised, cross-sector components. Government is also uniquely positioned to take on the challenge of implementing a new, industrialised construction approach, as they have the resources required for in-depth research and development. Still, with an undertaking as large as transforming construction, collaboration with industry will be crucial to success.

The good news is that we’ve already seen this happening more recently, in terms of developing policy responses to the pandemic. Whereas, previously, the government has simply implemented policies, we’re now seeing a more collaborative approach, in the form of The Construction Playbook and Industrial Strategy. The government is now actively working with industry to make sure new policies can be implemented. It’s thinking about long-term delivery and it recognises the need to be working with industry to achieve that goal.

Broadening value outcomes with ‘Build Back Better’

If we look back over the last decade, 2010 saw a focus on plans to deal with the deficit. A lot of projects were cancelled, including highway schemes and school building programmes. The aim was fiscal consolidation. When spending plans came out, much of the narrative was focused on efficiency. There was the first iteration of the National Infrastructure Plan, the Government Construction Strategy and the BIM mandate that followed in 2011. However, as we’ve progressed, that focus is shifting. It’s no longer a case of trying to do the same things we’ve always done, just more efficiently. We’re interested now in doing new and better things. We’re starting to ask different questions. How do we drive better performance? How do we increase value and deliver those broader outcomes? How do we work with industry, academia and the business community to deliver results?

For all the terrible destruction COVID-19 has caused, perhaps the silver lining has been its role as a catalyst for a more rapid pace of change. The government messaging is Build Back Better, incorporating a greener and faster element. We’re recognising the need for better outcomes, supporting things like levelling up the economy, delivering greater social value and driving a path to net-zero carbon emissions. It’s an encouraging shift, because we won’t achieve these goals simply by taking the lowest price, transferring risks down the supply chain, and using arcane procurement practices. We need to see this recently accelerated pace of change continue, and perhaps go even further, as the government sets out its plans to drive an economic recovery through the way it invests in construction infrastructure.

The Construction Playbook - making it possible

The Construction Playbook has been a fantastic example of how quickly it’s possible to move. Here you have people working in new circumstances, each with their own business imperatives, and yet the government was able to get the public and private sector together to create this document, to galvanise industry and achieve that level of buy-in. This was made possible by the fact that the COVID-19 crisis has brought the industry together. The Construction Leadership Council (CLC) and the officials in The Department of Business, Energy and Industrial Strategy (BEIS) worked closely to forge a much better link between government and industry. We’ve seen the CLC successfully deal with things like keeping construction sites open and the launch of the talent retention scheme. All of this has given industry a new, unified voice in government; an important step for a sector which hasn’t necessarily been widely listened to in the past.

This type of unification has clearly demonstrated the benefits industry engagement provides, showcasing to the government how the construction sector can support recovery. In addition, industry players themselves have seen the benefit of coming together, not just in terms of a recovery from the immediate downturn, but also through an understanding of how transforming construction into a more productive and sustainable sector in the future can be supported and accelerated. We’re no longer talking about simply needing more people on site to build things more cheaply. The focus now is about how we construct our assets and how we operate.

We have important questions to answer: how do we drive greater levels of manufacturing (DfMA) and more productive growth into the sector? How do we use data in a way that supports not just better construction projects, but also better operational assets? How do we drive that path to net-zero carbon emissions with greater impact on social value? These things are crucial to strategic policy, both in terms of the new assets that we build, and how we operate the existing ones. As an industry, we have a moral obligation to do better. The current opportunity for transformation and progress in construction has arrived at a critical time.

Evaluating Risk and Driving Value

That said, there will be risks going forward and we need to guard against them. We’ve got to try and avoid bad practices -and report them. We can’t focus exclusively on ‘cheap,’ driving a race to the bottom. The focus must be on broader value. In terms of implementing policy decisions, we need to provide more evidence, more data, more measurement. It’s vital that we’re able to demonstrate clearly that these new ways of operating will deliver the outcomes we seek. It’s not enough just to measure cost and time. We need to make a strong case for the other value outcomes as well, including productive growth and social value.

Finally, we need to have a certain amount of flexibility on the journey to meeting our goals. It’s critical to know where we’re heading, but we shouldn’t rush down the wrong path for political expediency or short-term measures. We’ve got to be able to respond to emerging needs, placing greater emphasis on what may be required at any point, be that lowering carbon emissions, social value, or any other value driver, and we’ve got to respond in the right way and at the right pace, so we don’t get taken off course. It requires collaboration and the convening power of the Construction Leadership Council will be crucial to that.

BIM and digital twins

We’ve been watching this process evolve over time, with BIM focused on digitising the design and construction of projects. What we’re really aiming for though, is a future state where we’re able to understand and measure and digitise the actual performance of built assets. At that stage, we’ll be able to use the data to create insights beyond one particular project. Instead, the data will help us understand network and system level impacts. We’ll be able to evaluate specifically how an energy project, a transport project, a school and a housing scheme interact. Digital twins and federated digital twins will enable us to understand how things are actively performing.

Whereas, originally, this effort focused on the capital phase of a single construction project, with digital twins we’ll be dealing with the whole life of an asset, and how it relates to, and integrates with,its environment and the other assets around it. That level of data will provide huge knowledge and insight, which in turn will help us to make better decisions supporting our broader set of Design for Value outcomes. We’ll be able to make decisions about how we want to intervene, and it could end up shaping the policy environment. That’s when we’ll really see the true power and value of data.

A Kit-of-Parts Approach and the Creation of a Digital Marketplace for Construction

In the utopian future state we seek, buildings will increasingly be configured using Platform construction methodologies and a kit-of-parts approach. The parts will be interoperable and there will be common interface standards and rules. If a new, highly energy-efficient product creates local jobs, then we’ll need a clear route to market for that product, as well as a value-based decision about how it’s deployed. At the moment, however, this isn’t really possible, because we don’t have a clear set of rules. We have too many non-interoperable systems and ecosystems. Our current decisions are based on cost, rather than value and outcomes. Initial capital costs and whole-life costs will always be important, but all of the various value metrics and value drivers need to be considered alongside them.

Therefore, another solution which might evolve in the process of transforming construction would be the creation of a digital marketplace. Such a scenario would stipulate certain quality and ethical thresholds for supplier participation. It could be similar to an Amazon model, but with products, sub-assemblies and systems supporting and providing value-driven data. The data would reflect jobs supported, social value delivered, net-zero carbon emissions facilitated, safety promoted, as well as compliance with regulations and standards.

Staying focused: collaboration, disruption & diversification

The benefits of transforming construction will be enormous, but it won’t happen overnight. However, as long as we have a clear and compelling vision, and are all aiming for the same end goal, companies will be able to plot their own path to reach it. The journey will be important and it must be handled properly. Industry must have the capability and capacity to deliver new solutions. We need everyone to contribute and collaborate:clients, policymakers, the market. Of course, this process will be disruptive because industry transformation always is. However, the shift will take time and there will be plenty of signals along the way. Companies will be able to adjust accordingly. It’s likely that many of the current Tier 1 players will remain very powerful in the new market, but we’re also likely to see big disruptors coming in. Not only that, I suspect some of the current players will disrupt their own business models to broaden the range of services and income streams they're able to generate.

We’re also likely to see some contractors start to diversify the services they offer, or broaden their range of products. They’ll need to be able to respond to what happens in the future, as we change our focus to the provision of whole-life solutions, rather than just capital assets. Pure contracting, as we currently know it, is likely to be a smaller part of the market. Consultancy models are also likely to change, with a shift away from hourly rates for procured design services, towards an outcome and value-based model. This would work more like app development, where a product developer might identify a need in the market and then create a solution to license, achieving monetisation by selling it repeatedly in the UK and overseas. This is particularly likely if there’s a focus on design for manufacture and assembly (DfMA).

We’ll also see data driving diversification. People will begin to understand how they can use data to offer different products and services, impacting things like availability and operational performance. In this scenario, capital costs will become something of a blip in terms of the overall service offering being brought to market.

P-DfMA and the UK’s Role within the International Community

Then there is our work here in the UK with Platform construction (P-DfMA). It’s certainly an exciting possibility that our work with P-DfMA could end up being adopted by the international community. We saw this happen with BIM standards, which were very quickly adopted as the de facto standards with things like EN ISO 19650. We’re now starting to see the rest of the world beginning to look towards an industrialised construction approach. If we make headway with Platform construction there will be a massive international market available. This could be a real opportunity, if we can join up a few different elements.

With BIM Pro we saw the need to go out and engage with foreign governments, forming a community to promote an approach and process which drives better delivery. We need to consider what the UK can offer those international markets beyond BIM. We’re very highly regarded in finance and insurance, for example, and those things are required by world leaders who want to deliver infrastructure and construction programmes. We’ve got all the various digital tools which are being developed and coming to market now. We have things like the Value Toolkit coming out of The Construction Innovation Hub. The question is, how do we help governments make choices that support their ambitions? Value drivers aren’t exactly the same from one country to the next, and so we’ll need to help them make choices based on what’s best for their own local needs, projects and communities.

Although our technical services and products are becoming increasingly exportable and marketable, we need a more cohesive and collaborative approach regarding how we bring that UK construction value proposition to market. It may be that BIM unlocks value, or value unlocks finance, or finance unlocks BIM, but there is a real chance to develop a ‘UK brand’ construction approach that we can sell internationally. We don’t want to compete on how cheaply we can provide labor and concrete. We want to compete on how much value we can add, and how we can help support the delivery of infrastructure and development plans of economies throughout the world.

The Construction Leadership Council and Developing a UK Value Proposition

There can be no doubt that the UK has a crucial role to play in shaping the future of the construction industry. The Construction Leadership Council, working very closely with the Department for International Trade, has started to address this. They’re considering what it means for consultants like Bryden Wood, Mott MacDonald, Arup and others, as well as the big contractors and construction managers. We need to evaluate how we can get behind a UK value proposition and create something that allows us to export all of our wonderful technologies and services internationally. At the same time, we also need to stay focused on the capability to service our own needs here in the UK. Yes, things are changing. There are challenges to be overcome and there will be more on the road ahead. However, by 2050, it’s possible that we could be looking back at COVID-19 as necessary pain we had to go through to help us reach our goals. It could be that our current difficulties will ultimately help lead the global transformation into a more sustainable and equal global community.


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