By Stephen Good, CEO of Construction Scotland Innovation Centre (CSIC)
IT would be safe to say that any predictions made about the past 12 months more than likely haven’t come to pass. Whatever most businesses had planned for 2020 – those in construction included – was swept aside by the Covid-19 pandemic and, in many cases, replaced by more pressing needs.
As the year draws to a close and we move in 2021, however, there are good reasons to be optimistic. Successful vaccines, a plan for construction’s recovery, and the arrival of COP26 in Glasgow will provide a greater degree of certainty and focus for the 12 months. That said, next year will have its own challenges – not least in the shape of Brexit.
Below, I outline some of the trends and events that will likely come to define the construction industry in 2021, and the opportunities and obstacles that will come with them.
A more collaborative industry
One of the few positives to emerge from the Covid-19 pandemic has been a greater sense of community and collaboration – not only in construction, but other sectors too. In our industry, I would say there is a greater willingness to work together on common challenges and re-assess how competitors within the industry engage with one another.
In that spirit, the UK Government recently issued The Construction Playbook to guide the industry on best practice in public work projects in terms of how they are procured, delivered, and assessed. It is a positive step in the right direction and, while Scotland may not take exactly the same approach, it will likely be similar in spirit.
What a Scottish approach could better resemble is the Construction Accord, launched in New Zealand earlier in 2020. This model creates a formal partnership between buyer and seller, rather than both parties seeing one another as adversaries, ultimately helping to deliver the maximum value from projects rather than looking purely at the cheapest cost.
A significant shift for skills
Covid-19 has had a major impact on the jobs market in Scotland, the UK, and across the world. The UK construction sector has been among those badly affected, seeing its worst decline in a decade during the second quarter.
There is, however, a great deal of latent demand for construction skills. As the UK and Scottish Governments’ infrastructure plans take shape and aim to deliver a boost to the economy, that should only become more apparent.
The risk is that many of the people who have unfortunately lost their jobs will go on to work in other industries. Therefore, we need to retain as far as possible the capabilities and skills that we have, making sure the workforce required is there to deliver not only now, but in the future too.
Another issue to factor in will be Brexit and the ‘brain drain’ this could lead to, with workers returning to the EU and, subsequently, workers in Scotland and the north of England moving to London and the south east where wages may be higher.
In turn, that will require upskilling, multi-skilling, and in some cases re-skilling programmes – particularly around the greater use of digital tools and technologies, which will only become more important as we move into 2021.
Accelerated digital transformation
On the subject of digital, 2021 could be the year that construction’s digital transformation really comes to life. As well as skills, there is a bigger picture role for digitisation of many aspects of the sector and, with that we are likely to see a technology strategy in the next 12 months.
There are, of course, a multitude of enabling technologies that could support constructions businesses, providing them with an almost overwhelming set of choices. One of our key activities will be to develop tools that help companies understand which of these are and are not relevant to them.
Another significant digital development will be the fourth national planning framework (NPF4). It will modernise the planning system, provide a digital portal, and introduce new measures that developers, contractors, and suppliers will need to consider carefully when they deliver projects. Included in these will likely be the refusal of any new buildings that do not commit to achieving net zero carbon emissions.
A greater focus on de-carbonisation
From a policy perspective, there will likely be a whole host of announcements next year – some of which were, understandably, delayed in 2020 as governments had to deal with the pandemic. Among them, we expect to see updates to the government’s climate change plan as we move towards a roadmap for the 2045 target.
Construction’s role in helping deliver that ambition will become even more important. Lord Deben, chair of the Committee on Climate Change, when asked at the launch of the UK’s 6th Carbon Budget ‘what should governments be prioritising’ placed improving energy efficiency and decarbonising heating across the built environment as the top priority. COP26 in November will be a good marker for how far we have come and what more we can do on this front.
The Scottish Government’s Programme for Government contains commitments to billions of pounds of investment in Scotland’s infrastructure, built environment, and decarbonisation programmes. These will create opportunities in areas such as the retrofitting of renewable heating installations, which will need to be ramped up by an order of magnitude to reach targets.
Supply chain resilience and Brexit
Setting targets is one thing – reaching them is another. If we want to mass retrofit renewable heating, then we need to know we have the supply chain in place for all the components, products, and skills which go into achieving that.
Data will be crucial, in that respect, and we are co-chairing a group that will deliver a data strategy for the sector at two levels. Firstly, it will create a data dashboard that provides a high-level snapshot of the industry, providing an instant state of play on everything from economic impact to health and safety.
The second is to use data in a more forward-looking way and even in a predictive capacity. The dashboard will be able to say, if we are undertaking the aforementioned retrofit programme, whether we will need to train more people in those skills and provide an indication of what needs to happen next.
Brexit will undoubtedly have an effect on supply chains and the availability of products. One of our areas of focus will be to assess and enhance our existing supply chain, looking at ways of increasing the ability to supply local, natural products, made from, and in, Scotland – our recently announced mass timber project is an example of that in practice.