By Stephen Good, chief executive, Construction Scotland Innovation Centre
THE importance of the construction industry to the Scottish economy can be demonstrated with a few vital statistics. It employs around 170,000 people, contributes £21.5 billion to our GDP and makes up 10% of our GVA. For every £1 spent on construction output, a further £2.94 is generated. There’s also the significant economic growth that’s unlocked every time a major new building, road, railway, port, bridge or airport is built.
An efficient and competitive construction industry is therefore of paramount importance in ensuring Scotland’s future prosperity.
The Scottish Government knows this – after all, the sector supports and delivers against many of its key policy and economic strategy agendas such as circular economy, youth employment, infrastructure investment and inclusive growth. Thankfully, it also understands that the industry must modernise if it is to survive.
The 2016 Farmer Review of the construction labour market highlighted the many challenges the sector faces – low productivity, a dysfunctional training model, lack of research and development and investment in innovation, a fragmented leadership and a huge image problem that’s discouraging to young people. All of this must change.
Encouragingly, businesses are also waking up to these challenges. Construction Scotland Innovation Centre is responding to an ever-increasing number of enquiries from industry, keen to explore innovative ways their businesses can evolve. Last month’s announcement that CSIC would receive almost £11 million of core funding to support the sector to innovate and grow is therefore fantastic news not just for the industry, but for Scotland as a whole.
This significant investment from the Scottish Funding Council, Scottish Enterprise and HIE will support our Phase 2 mission to mainstream innovation in construction. We expect the funding to support the sector to deliver £998 million of additional gross turnover, create 1,847 new jobs and retain 4,721 existing jobs over the next five years.
CSIC has big ambitions for the future. We will focus on the cultural barriers across the industry and address issues like new innovative procurement models, diversity and inclusion, internationalisation, collaboration, productivity and investment in R&D and innovation. We will champion industrialisation and manufacturing opportunities, including offsite, robotics, and design for manufacturing and assembly – these are the things that will drive productivity, quality and efficiency measures across the industry.
The Industrial Strategy Challenge Fund’s Transforming Construction programme will be a key focus for us. Part of the UK Government’s Sector Deal, the programme will see £170 million of investment over three years to help the industry transform. The programme consists of four key components – a £72 million Core Innovation Hub, the £36 million Active Building Centre; the £2.5 million Network Plus initiative and a £59 million collaborative research and development call programme. Exploiting these opportunities is crucial.
CSIC has been invited to join the Core Innovation Hub, Active Building Centre and Network Plus consortiums. All three have now been successfully funded, ensuring CSIC can lever a share of the innovation funding into Scotland, helping Scottish businesses and academic partners actively contribute to the programme.
CSIC has also been hosting awareness raising and consortium building events to help businesses take advantage of the collaborative research and development call programme. An exciting Scottish industry-led proposal, developed with CSIC support, has already secured almost £4 million to develop advanced industrialised methods for the construction of homes.I believe the construction industry is on the verge of a digital and manufacturing revolution. With this next phase of vital funding support in place, we can help scale-up and mainstream innovation within the sector, which in turn will unlock growth.
However, we’re relying on industry and its clients, both public and private, to really step up and drive that revolution forward. New innovative technologies and processes offer huge opportunities to develop better, faster, cheaper solutions. However, these are just tools, and will not change the face of the construction sector in isolation. We need the right people to use them.
The key is adopting the right mindset and ensuring the visionary leadership is in place to implement the change in culture that’s needed across the industry’s people – both on the client and delivery side. People are at the heart of innovation and we need bright, talented and committed people to come forward and support us.