Construction Scotland Innovation Centre (CSIC)
A constructive approach to construction …
Profile: Construction Scotland Innovation Centre (CSIC)
ADMIN HUB: Edinburgh Napier University
FUNDING: £7.5 million (initial investment)
WHO: Construction Scotland, Scottish Enterprise, Highlands & Islands Enterprise and 11 universities in Scotland
A constructive approach to construction
At a recent presentation in Aberdeen, Bill McBride was asked how the newly-set-up Construction Scotland Innovation Centre (CSIC) was going to spend its £7.5 million “grant” from the Scottish Funding Council (SFC).
“It's not a grant,” McBride replied. “It's an investment.”
As the Interim Chairman of the CSIC, McBride is keen to ensure that the money is turned into tangible outcomes – not just to give the SFC “value for money” but also to satisfy a traditionally conservative industry which is and always will be hard headed when it comes to results, and a major contributor to Scotland's economy.
The construction sector in Scotland is worth about £8.7 billion a year and employs 130,000 people, but the challenge facing the CSIC is that the industry is highly fragmented – with the top ten contractors accounting for roughly £2.2 billion a year but employing only 6,000 people, and 88 per cent of the contractors employing fewer than ten people. With a total of 31,000 companies involved in the sector, that means the CSIC deals with a very wide spectrum of businesses, with very different needs and ambitions, but McBride is very clear about the need to reach them all.
“It wouldn't be good enough only to engage with the Top Ten contractors,” he says. “We also have to deal with thousands of SMEs and micro-businesses, and treat them with equal respect, as well as meeting their individual concerns.” In such a fragmented market, he adds, it's also important to identify areas of common concern across the whole sector, and get everyone to buy in to the idea from the start. “It's like intelligent design,” McBride continues. “Everyone can learn from one another, and create the kind of synergy we see in oil and gas.”
The construction industry is ready for “disruptive innovation”, but McBride is also clear about the mission of the organisation – to deliver results and return on investment. “The construction sector is a major employer and has a huge impact on the Scottish economy,” he explains. “It is also a great multiplier, generating lots of value added for every pound invested. We need a structured approach and a supportive environment which brings different people together, and our mission is to take the Centre forward to become self-sustaining, generating income and attracting alternative sources of funding.”
To be truly successful, he adds, innovation must have an impact throughout the whole sector, ultimately leading to more jobs and profits. In McBride's view, this should lead to a “virtuous cycle” of investment which sees construction companies develop innovative solutions, in partnership with University Business Schools and academic researchers, then, seeing the rewards produced, re-investing some of the profits in further research, to develop the next innovation, leading to a spiral of investment which produces more and more innovation.
What's needed is a culture change, McBride believes, to “transform how we do innovation, and optimise the opportunities created by focusing on innovation, empowering contractors so they will drive development in future.”
Lots of people and companies have great ideas, he continues, but they may lack the skill-set to move on from concept to prototype and ultimately commercialisable products which generate profits and jobs. The fragmented structure of the industry and the very nature of construction can make innovation very hard to achieve. Whilst most new products in other sectors (e.g. electronics) can be prototyped in workshops, then tested to destruction and researched for market potential, “construction is in muddy fields” and the prototype is often the building itself. The costs involved, and safety issues, make it very risky to experiment.
“Innovation happens at a very different level, and also crosses many different disciplines,” says McBride. “The construction industry is already innovative in specific areas, but it is difficult to drive innovation across the whole sector – especially in recent years when the industry entered recession, and there was a 'race to the bottom' as contractors competed for business. Now, however, the timing is right, and the industry is better placed to see the real value of innovation.”
For example, many researchers have been doing work on “healthy buildings,” including studies on the benefits of natural light, which can boost productivity in offices, improve performance in schools and help people in hospitals recover more quickly. “People spend a lot of time in buildings,” McBride explains, “and the environment can have a big effect on our performance.” The challenge is to get this knowledge out there into projects in the real world. Greener buildings – with a smaller carbon footprint and greater energy efficiency – are another area where innovation has a key role to play, whilst off-site manufacturing can also contribute to project success.
“The more you can fabricate off-site, the better,” says McBride.
In addition to the emphasis on new materials and methods of construction, many smaller contractors also want to see more innovative business processes adopted in the industry – for example, new measures to improve their cash flow. These smaller companies are also very often the driving force behind innovation, and the CSIC wants the industry to harness their talents so they have an impact throughout the supply chain.
Sometimes, progress comes from challenging people and organisations. When asked why they do something in a particular way, most companies reply that it is how they’ve always done things, and “if it's not broken, why fix it?” But even though they may be competent, McBride says, there’s usually a better way – as business guru Jim Collins famously said, “good is the enemy of great.”
“It's hard to solve a problem with the same old way of thinking that got you in trouble to start with,” says McBride. “Sometimes you need to be an agent provocateur and sometimes you need a catalyst for change, such as our world-leading Scottish university partners. The CSIC will address the need for deep-rooted structural change and deal with a broad range of issues, but we can’t solve every problem overnight and we certainly will not succeed without changing the culture.”
First things first
The first steps for McBride in his interim role are to appoint a board, recruit a CEO and engage with the different stakeholders – including everyone from government and trade federations to micro-businesses and SMEs, major contractors and the 11 universities who will provide the initial research base: Aberdeen, Dundee, Edinburgh, Edinburgh Napier, Glasgow Caledonian, Glasgow School of Art, Heriot-Watt University, the University of the Highlands & Islands, Robert Gordon, Strathclyde and West of Scotland.
For McBride, the priority is to get the right people involved from the start, because “innovation is all about people.” The board consists of diverse people with a skills set which reflects every part of the supply chain, including customers, major contractors, entrepreneurial SMEs with a track record in innovation, sub-contractors and academics. The new CEO will need to have good industry experience and ideally be someone who has “been there and done it” in terms of business and innovation.
Later on, the CSIC wants to have a home for the organisation – a one-stop shop for innovative companies – but the first priority is people.
“People are the greatest drivers of innovation,” says McBride, “and leadership is needed to exploit this potential.”
Within three weeks of his appointment, McBride set up a meeting in Dundee for representatives of industry and academic researchers, and the response has been encouraging. Some universities have well-established departments with a lot of experience working with industry and applying for funds, whilst others bring a fresh approach – and innovative ideas.
Communication with the industry will also be important, via trade federations as well as direct. “The big message is all about innovation, but different interests groups have different interests, and also wonder how they will benefit from the new Centre, so we'll speak to them as individuals,” says McBride. “But everyone already recognises the benefits of innovation as an engine of growth which will be good for the economy, jobs and investment – and create a better industry.”
Another key part of the mission will be education and training, funding industry placements and doctoral programmes – to create a new generation of “industry champions” immersed in a culture which promotes innovation, as well as a better-skilled workforce prepared for the next stage in the industry's future.
The CSIC will be a go-between for customers and industry as well as researchers. Major customers (e.g. the NHS or Scottish Water) want better, greener, more cost-efficient projects, delivered on time within budget, and the CSIC can speak to researchers and their industry partners to find the best ways to achieve this, then bring the different parties together to put new ideas into practice.
Acting as a go-between could make a critical difference in steering the direction of research towards more practical and more commercial projects. Whilst academics may gravitate towards what interests them most, business people focus on profits, and aiming for more innovation could satisfy everyone's needs because it is not just an engine of growth but a stimulus for new academic research.
“In some ways, we are pushing against an open door,” says McBride, “because the different stakeholders now recognise the mutual benefits that will come from closer collaboration and innovation – economic growth, more profits and more jobs, and more investment in research.”
Just as McBride himself intends to steer the CSIC into its next stage, able to run on its own, he hopes that innovation in the industry and real-life projects will create the momentum required to drive more innovation in the future, with the industry pushing ahead on its own and sustaining its own growth. And before he returns to his job as Managing Director of the Westcrowns Group, a company which employs about 400 people and turns over £37 million year, he's determined to get the right people on board.
McBride is passionate about innovation and the future of the industry in Scotland. He understands the importance of changing the industry culture, but also knows the bottom line is where the success of the CSIC will be measured: “We have the biggest opportunity in 25 years to change the industry within a generation. We also have a great under-utilised asset. New products and solutions are important, but we will not succeed unless they are commercialised, and our job is to leverage the current investment to create new jobs and generate new sources of income – not just another new patent. Innovation is essential to future success, but it must be sustainable.”
The formula is simple: if research and development leads to successful solutions which provide a good return on investment, then more funds will be ploughed back into future R&D, and other companies will also be inspired by these successes to go down the same road. To make it work in such a results-oriented business will be a challenge, not just for science but also for the art of persuasion.
“We’re putting the pieces of the jigsaw together,” McBride says. “It would be great to bring 100 projects to market within the next five years, but the challenge will be transformational change in the industry and academic culture, and sustainable growth in construction.”
The construction industry in Scotland
According to the latest figures from the Office for National Statistics, construction output in Scotland grew by almost £1 billion in 2013, taking total value to £10.7 billion.
The strongest growth was in private commercial activity and infrastructure, including major public-funded projects such as the Queensferry Crossing – the bridge designed to relieve the pressure on the Forth Road Bridge – and the construction of the Commonwealth Games Athletes’ Village in Glasgow (pictured right).
However, figures for output in the house-building sector showed a decline in the value of public sector housing – falling to its lowest level since 2007.
According to the managing director of the Scottish Building Federation, Vaughan Hart, "Recovery in Scotland is being led by government investment in and significant growth in the private commercial sector. But the value of housing output in Scotland actually fell by £141 million in 2013.”
This drop in new housing last year is counterbalanced by a recent report which concluded that demand for new homes could fuel the creation of nearly 30,000 extra construction jobs in Scotland over the next five years. The Construction Industry Training Board (CITB) expects the private housing sector to see average annual growth of 4.7 per cent, boosted by major housing projects such as a £100 million eco village in Aberdeen and a £1.5 billion sustainable housing development in the Douglas Valley.
The CITB report added that average annual growth in output for the construction industry over the next five years was expected to be two per cent. And a recent report by the SBF said that seven out of ten firms were currently looking to recruit apprentices, while six out of ten had taken on trainees in the last year.
Researchers welcome opportunity
The University of Aberdeen will be one of the partners in the new Construction Scotland Innovation Centre (CSIC). Its newly-established Centre for Innovative Building Materials and Technologies (CIBMT) brings together specialists in a broad range of disciplines to research and develop new solutions for sustainable construction, including homes, buildings and urban infrastructure development, including research in energy-efficient buildings and innovative, high-performance thermal insulation and ventilation technologies.
CIBMT Director, Dr Mohammed Imbabi, says the CSIC is a fantastic opportunity to bring together a wide range of expertise and align it with real industry problems. “In Aberdeen,” he adds, “we have long recognised the need to reduce conventional energy use and carbon emissions in buildings and across the built environment. Our integrated, multi-disciplinary approach to achieving this objective involves addressing a number of issues, from the materials used in their construction or renovation to the effect of the building on its local and global environments, and its impact on people’s everyday lives.”
Professor Andrea Nolan, Principal of Edinburgh Napier University, said: “The construction sector faces many challenges but also opportunities. The centre will provide a transformational platform for delivering economic and environmental benefits for our future generations.”
“With construction strongly influencing the quality of the environment in which we all live and work, it is essential that developments taking shape on projects around the country are connected to the academic capability and innovation in our higher education sector, as this will ensure that an innovative culture pervades our industry,” said Ed Monaghan, Chair of Construction Scotland.
“This is essential to the future of construction here in Scotland, as we increasingly respond to stringent sustainability agendas and new market opportunities both here and abroad. Collaboration, knowledge exchange and innovation are achievable, but not the norm. The role of the Innovation Centre is to transform that mindset and ensure innovation becomes business-as-usual, creating a sector that is sustainable and one that generates greater economic impact for Scotland.”