Landsec’s recently completed Forge building incorporates all the elements of transformed construction – digital, manufacturing and sustainability. (credit Bryden Wood)

An opinion piece article by Sam Stacey, Challenging Director, UK Research and Innovation (UKRI)

When the UK’s Industrial Strategy was launched in 2017, Secretary of State Greg Clark proclaimed we “we are at one of the most important, exciting and challenging times in the history of global enterprise”. For the construction sector – one of those selected to lead the charge with the £170m funding of the Transforming Construction Challenge – that promise is well on the way to being fulfilled. The Transforming Construction Challenge was launched in 2018 with a vision to change the construction industry for the better. The challenge aimed to make greater use of digital technologies and a manufacturing approach to constructing buildings, and drive a shift in focus towards ‘whole-life value’ of buildings rather than the cheapest solution. The following video showcases innovations developed and deployed across the UK over the course of the Transforming Construction Challenge, setting out the story of the Challenge so far, and calls to action as TCC draws to a close. The legacy of the Transforming Construction Challenge – YouTube.

The recent Independent Evaluation of the Challenge found it to have exceeded its targets in all areas. 85% of clients reported more frequent use of Challenge solutions and an increase in R&D spending to well in excess of the £250m originally pledged by industry; 92% of the companies involved in Transforming Construction reported a positive impact on revenue; annual growth in construction service exports increased from 9% to 14% since the inception of the Challenge; and indicators of project performance are also looking good, with 71% already reporting improvements in delivery time, 27% a reduction in cost per square metre, and 30% an improvement in productivity.

The Transforming Construction Challenge was designed to take a system-based view to reshaping the sector, providing a new framework for asset value, proving platform methods and shifting procurement. New business models were tested that accelerated technology adoption, and shifted demand away from ‘cheapness’ towards long-term stakeholder rewards. Steps were taken to lay the foundations for change through every step in the construction process – from design, through manufacturing and site, to use – and for a range of building types. The need for scaling was understood from the outset. The evidence shows uptake to have exceeded expectations, with planned uptake of whole-life cost reductions across projects worth £114bn by 2027. This demonstrates just how quickly the industry is prepared to adopt innovation when the conditions are right.

Challenge outputs will continue into September this year, but already there is a substantial body of knowledge for the industry to absorb, including nintey-two published case stories. These include clean energy solutions, industrialized delivery of housing and offices, plus a radically intelligent piling solution. We have also seen enthusiastic responses from investors: nPlan, which uses machine learning to optimise large construction project planning and scheduling has received £25m investment that included Google Ventures; Cloud Cycle, providing sensor technology for concrete trucks to optimise delivery and quality has obtained £9.3m investment; and Converge’s sensor technology monitoring concrete curing is now being used all over the world having received £24m in investment.

It is clear that the Challenge has begun to shape thinking around procurement in the public sector, including through its significant contributions to the Construction Playbook, which sets out new policies and guidance for how public works projects and programmes are assessed, procured and delivered. This new procurement approach has been tested with schools via the Gen Zero programme, hospitals via Space Frontiers and transport via the Living Lab. This commitment and scale of demand from both the public and private sectors is giving vital confidence to the market to invest in factory production and other industrialized methods.

My best estimate of the potential efficiencies for construction is a quadrupling of labour productivity, a twenty-five percent reduction in materials and slashing of energy in use by seventy-five percent. This has profound implications for company share values and societal gain. It will be transformative for a sector that has historically achieved low investor returns. There are four areas that I see as particularly interesting. Firstly manufacturing – manufacturing businesses expanding into the market for offsite fabrication. Secondly information systems – businesses offering digital insights throughout the construction process. There will also be opportunities from the race to decarbonize and reduce energy demand via the installation of clean energy solutions. Finally, I see a need for new specialist online marketplaces to enable the buying, selling, configuration and assurance of standardized building components. In September this year I will be launching a new business – Stacx International – to support companies and investors in exploiting these new market opportunities.

Further support for innovation is also on offer from Innovate UK. The £30 million Fast-Start Innovation competition has been announced and opens on Monday 11 July for applications. This competition will provide a boost to cutting-edge start-ups who have not previously been funding by Innovate UK with grants of up to £50,000 each. Longer term, one of the main focus areas for Innovate UK will be supporting decarbonisation. Innovate will be launching its Net Zero strategy later in the year, which will include substantial resources for organisations in the construction sector.

I look forward to collaborating with Futurebuild in driving the revolution in construction.