Innovation – the key differentiator

This article was originally published by BSRIA, Innovation – the key differentiator? in April 2015. It was written by David Churcher, Principal Research Consultant, BSRIA Sustainable Construction Group.

Innovation is the translation of an idea or invention into a product or service that adds value or that a customer will pay for. It is seen as one of the key drivers of economic growth – not just to do more of the same, but to do better. This might be better in terms of efficiency or in terms of effectiveness, or some combination of the two. Innovation is happening all around us, and the key lesson for the UK building sector is that it cannot be complacent when it comes to innovation.

The first distinction to make is between innovation and incremental improvement through repetition. Improvement through repetition has been documented and studied for many years and is usually thought of as moving along the learning curve. A classic report into this was published by The RAND Corporation in 1956 Cost-quantity relationships in the airframe industry. But for the purposes of this article, we will take this as read and concentrate on innovation arising from deliberate change. The scale of change then sub-divides innovation along a spectrum ranging from gentle evolution to disruptive revolution.

At its best the building sector is a natural crucible for innovation, with lots of creative, imaginative and motivated individuals in organisations that are in competition with each other. From this point of view, the fragmented nature of the industry can be seen as an advantage – if company X doesn't innovate while company Y does, then X will lose out as customers discover Y's more effective or more efficient solution. The impact of a more global supply chain can also help stimulate innovation as ideas from other parts of the world are introduced to the UK market. That can work both ways when UK ideas and expertise solve problems and deliver projects in other countries.

Like many other industries, the drivers of innovation in the building sector often follow the economic cycle. When times are good, innovations can focus on improving functionality at a given price point (better energy efficiency through super insulation, or more adventurous designs giving greater “soft” benefit). When times are hard, innovations tend to focus on cutting costs to achieve the minimum standard (more efficient construction methods, office layouts that maximise net lettable area). In the benign conditions of the late 1990s and early 2000s, Swiss Re could convince themselves that a building that would be instantly recognisable was worth the sacrifice of usable space in a circular plan and cigar-shaped profile (The Gherkin). In 2008/2009, when Europe was in the grip of an economic crisis, a different decision might have been made. Many other projects whose timing was less fortunate were postponed or cancelled.

This highlights one of the main problems with innovation. The time lag between the initial idea and bringing the new product or service to market can be so long that market conditions have changed before the innovation is released. Other risks relating to innovation include an inherent conservativeness amongst clients and a tendency to see each project as a prototype amongst designers and constructors. The conservative nature of some clients extends beyond the organisation or team that has procured the project to the occupants, end-users and visitors who will live or work in the building. This highlights the need to educate and communicate those “consumers”, and to keep on educating and communicating because the consumer group will change over time. Soft Landings should not just be about giving the first set of occupants a good user experience, but making sure this extends to every future user of a building.

Balancing the forces preventing innovation, there are some opposite forces driving innovation forward. Legislation has been a significant catalyst of innovation in the past, with improvements in building energy efficiency leading to advances in building fabric design, in building services systems and control, and in plant and equipment. Changes to health and safety requirements have prompted process innovation. As mentioned above, a tough economic climate is perhaps the most powerful non-legislative driver. Delivering improved efficiency has an immediate benefit in allowing prices to be lowered while retaining, or even improving, margin. This has been seen in both product and process innovations such as off-site assembly, automation, and the new(-ish) design and management practices around collaborative working and information handling.

Supporting the forces in favour of innovation and overcoming the forces against innovation are a suite of resources that are available to the whole procurement and supply chain. These include the sector's research capability, inside higher education institutions, research and technology organisations, and within the commercial supply chain. BSRIA, with its technical staff, industry membership and networks, does not just span the boundary between the academic and commercial sectors. It also spans the boundary between the project delivery and asset management sectors. With the emphasis on holistic delivery and management of built assets this is becoming an increasingly important vantage point. Innovation resources also include longer-distance horizon scanning of building sectors outside the UK, and industry sectors outside building, as these open our eyes to entirely different ways of approaching problems. Practical support for innovation, particularly financial support for small firms, is also a key resource to oil the wheels. This comes in the form of government support skills scheme), grant schemes and tax incentives. These resources and many others are available, but there is no obligation on anyone or any organisation to use them. Ultimately, innovation is a choice, even if that is the choice between staying in business or not.

This brings us to our final observation, that innovation will always be an important ingredient of success. We are by nature a competitive species, and ours is a competitive industry. When everyone else is moving, you can be left behind simply by standing still.

--BSRIA

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