The construction industry has been slow to adopt new technologies and processes, providing the sector with significant opportunities to improve with productivity, sustainability and affordability. Still, there are great examples of projects already being delivered with advanced approaches, and these can inspire broader changes. The World Economic Forum features 10 of these pioneering projects in its new report, “Shaping the Future of Construction: Inspiring innovators redefine the industry.”
Two of those projects involve major contributions from Skanska. New Karolinska Solna is a public-private partnership (PPP) university hospital project near Stockholm, with Skanska’s consortium responsible for financing, design, construction and maintenance through 2040. In the UK, Skanska is a partner in the @one Alliance, a collaborative organization working to deliver about 800 water projects between 2015 and 2020 for Anglian Water.
Success factors for innovation
From their research, the World Economic Forum identified nine success factors for innovation in construction:
1. Develop a vision and instill an innovation culture that challenges the construction industry’s status quo. The @one Alliance’s continuous-improvement mindset is cited as an example of this. The Alliance has “modified the mindset of its employees, inducing them to think beyond individual projects – a concept that most experienced construction professionals tend to struggle with,” the report says. “The Alliance leadership has developed a vision of becoming a continuous-improvement organization.”
2. Create talented, multi-disciplinary teams and devise an agile organization to accelerate innovation. Innovating on a regular basis depends on having multidisciplinary and multifunctional teams that “knock down barriers between units to end siloed thinking,” the World Economic Forum says.
The report cites how at New Karolinska Solna, Skanska staffed the project with experts from our operations in several countries and how we are rotating personnel between project phases – both to foster knowledge sharing. To drive innovation within the @one Alliance, team members are invited to submit ideas for improving products and processes, and the best ideas are implemented across the organization.
3. Take a customer-centric approach to devising innovations, starting from the pain points of construction customers and asset end-users. The report notes how there is often a disconnect between the main stakeholders behind creating a building or infrastructure asset – developers, investors, designers and contractors – and the end users. “Successful innovators opt for a customer-centric approach to innovations: they take user needs and pain points as the starting point for design and engineering,” it says.
4. Establish product platforms rather than taking an individual project perspective to create the business case for innovation.
As an example of this, the World Economic Forum cites how the Anglian Water @one Alliance uses its five-year horizon to focus on how series of projects can be leveraged to improve efficiencies. Through this approach, the Alliance identifies repeatable tasks and project elements that benefit from standardization.
Also, the report notes the significant upfront investment Skanska opted to make in a comprehensive lifecycle building information model (BIM) to serve New Karolinska Solna. The BIM model adds significant value during design and construction, and then also when New Karolinska Solna becomes an operating hospital: the facility data stored in the BIM model will optimize maintenance over the service period that lasts until 2040, providing payback for the investment.
5. Develop pilot projects and prototypes to demonstrate the potential and provide proof of value. “One imperative for innovators – to attract not only potential investors but also customers – is to make the innovation tangible as early as possible,” the report says. “Almost all successful innovators in our analysis went out of their way to create early pilots and prototypes to claim market space and prove the value of the innovation.”
6. Nurture the broader ecosystem necessary for implementing the innovation by developing the (local) supply chain and partnerships. “Engineering and construction companies operate in a project-based and fragmented industry, and have to collaborate with many partners – a reality that complicates long-term optimization of products and processes, and hinders the widespread adoption of innovations,” says the World Economic Forum. “Companies should, therefore, shift the emphasis and strive to establish long-term partnerships with key suppliers and other partners.”
The report cites Anglian Water’s @one Alliance model involving a select group of contractors and long-term contracts, and how for the New Karolinska Solna hospital Skanska sought to fully realize the value of developing a comprehensive lifecycle BIM model by having trade contractors and suppliers contribute to it too.
7. Embrace business-model innovation alongside technological innovation in engineering and construction.
“Being traditionally slow to change, the market often appears unwelcoming to innovations or ill-prepared for them,” the report says. “Successful innovators will strive to educate and shape the market.”
8. Advocate new ways of contracting to enable and incentivize effective collaboration with project owners from day one.
Traditional contracting and procurement models focus on initial capital expenditures, with the lowest bidder winning the contract. But such models do not focus on providing the lowest cost over the project’s entire lifecycle. “Innovators should, therefore, advocate other forms of contracting, with a longer-term and performance-based approach,” says the World Economic Forum.
The report notes how the Anglian Water @one Alliance engages its supply chain with long-term framework contracts, which “help to intensify and sustain collaboration, and also generate appropriate incentives to improve performance and share best practices within the Alliance.”
9. Shape the regulatory environment proactively to enable and promote adoption of the innovation.
“Just as traditional contracting and procurement models can hold back innovations and reinforce the status quo, so too can traditional regulation and building codes,” the report says. Innovators should work flexibly within existing regulations, while collaborating with regulators to set new standards.
The entire World Economic Forum report can be download from the Forum’s website.