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At the Future of Transactions Roundtable Debate, hosted by Business Leader Magazine and sponsored by SETsquared, one of the underlying themes of the discussion centred on how the construction industry is now starting to recognise the value of its own innovation and new technology to help manage its operations.
There is a lot of innovation in the construction industry. Businesses develop advanced materials and devise new processes to tackle the projects that they drive to success. It is not unusual to find remote drones and bricklaying robots on the modern construction site. However, often construction companies are too rigidly focused on the day-to-day delivery of projects on schedule and on budget that they do not realise what they are doing is real innovation.
RIFT is a financial services company that helps the construction industry get to grips with R&D tax credits, so they can identify acts of innovation and qualify their claims to receive tax refunds or cash payments. Julie Barry from RIFT says: “I think there is a tendency to associate R&D with scientists in white coats saving the world through ground-breaking medical discoveries and not visualise the work of an engineer on a building site.”
“But real acts of innovation are happening every day on building sites, often in response to adversity demanding them to find fast and effective solutions to overcome unforeseen challenges. Delays cost money, innovation involves risk, and spending to create solutions can be a drain on resources. But ensuring that risk pays via a successful R&D claim de-risks the costs involved,” said Julie Barry.
And yet, construction is still very under-represented in R&D Tax Credits claims. Just 3% of R&D claims currently come from the building trade. Julie says that this is changing: “We’re seeing more construction companies take ownership of their innovation and a realisation that the industry needs to change. The construction industry is heavily innovative, but it’s also very set in its ways, tied up with contracts all the way down the supply chain and companies don’t tend to share knowledge because success is rooted in winning tenders and having a competitive edge. But there is a realisation that the construction industry needs to evolve and embrace sustainability and become more efficient and technologically advanced,” comments Julie.
According to Global Construction 2025, a joint strategy between the industry and the UK government, the global construction market is forecast to grow by over 70% by 2025.
“It’s a bit like turning the Titanic but the opportunity exists, and the construction industry knows it needs to be better in order to reap the rewards. Construction leaders are aware that this level of potential attracts disruptors, and there is a genuine fear that one will capitalise on a gap in the market and leave the long-standing players in the dust. As a result, construction firms are developing smarter operations that lower costs and greenhouse emissions while increasing efficiency and speeding up completion rates,” added Julie.
Sam Gamble from Automated Markets is working with SETsquared as part of its Scale-up Programme to develop a revolutionary blockchain solution for the construction industry. His technology makes it possible to securely transfer assets, eliminate contractual disputes and build trust between parties without the need for an intermediary – all via the internet. Every aspect of a build would be documented with full traceability and this holds true value after the Grenfell Tower fire disaster.
The application brings all the parties in the construction supply chain together, simplifying the exchange and tracking of information and payments, and enabling greater confidence. It creates a permanent digitised chain of transactions that cannot be altered. Each network participant has an exact copy of the data, and additions to the blockchain are shared throughout the network based on each participant’s level of permission. Information is only shared with the parties with permission to see it. Customers, tier 1 constructors, sub-contractors and building control can interact more efficiently using comprehensive, near real-time access to this data.
“The data already exists – it’s just not being managed in the right way,” said Sam Gamble from Automated Markets. “Construction is a fragmented industry with lots of companies involved in complex supply chains, bound by regulations and legal agreements. Blockchain is designed to manage data beyond company boundaries and is great at increasing traceability in supply chains. We’re looking at using the technology to create an industry-wide framework for how construction information is gathered, held and exchanged.”
“When data is shared on a blockchain, everyone that reads the data knows that everyone else, that has access to it, sees the same thing – even if they are all in different companies. Companies that participate in our blockchain network will have access to data that is useful across their organisations, joining up different business functions to create significant internal efficiency gains.”
“Companies will be able to manage their construction projects more intuitively. Data would be captured and exchanged in one place, laying the groundwork for genuine cross-industry data standards. Blockchain has had this effect in other industries already.”
Construction is among the most stubbornly non-digitised sectors in the entire economy, despite the scale of the projects and levels of innovation being adopted. That being said, Sam is experiencing real interest in his blockchain technology: “Senior leaders I’ve been working with in industry are saying they’ve been waiting 25 years for this! There is a real appetite for change to make operations more streamlined, with added accountability.”
“The best blockchains are the ones you don’t know are there. It’s all about the problem being solved, not the technology. We’re building this one to integrate with the existing digital landscape in construction. The application will be available on mobile and desktop devices, but I expect most access via an open API from existing systems. The idea is to enable companies of very different sizes, and at different stages in their use of technology, to access and interact with the data.”
Earlier this year, Automated Markets embarked on a 12-month collaborative effort in partnership with Willmott Dixon, a leading UK independent constructor, to explore the potential capabilities of blockchain to make a step change in the industry’s ability to deliver safe, compliant and quality-assured buildings.
The aim of this collaboration is to set the groundwork for an industry-wide change. Willmott Dixon will have access to Automated Market’s Blockchain Strategy Practice and will leverage Automated Market’s existing industrial research in blockchain and secure off-chain data storage.
Sam’s technology is just one example of the way in which our construction industry is embracing technology to ensure its relevance and dominance in the UK as it strives to evolve its practices to capitalise on market growth and achieve government targets for sustainability, costs and faster delivery.
The sector has lagged behind other areas of the economy, but it is now grasping the fourth industrial revolution – the merging of the physical and digital realms – with both hands, ready to show the world how it can move forwards to become more agile and play its part in the sustainable future of our planet.
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