Tag Archives: green buildings

Is Disruptive Innovation possible in the construction industry?

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fishbowl jump by Kay Kim(김기웅), on Flickr
Lately I have been finding the term “disruptive innovation” everywhere.  From events about green buildings and BIM, to blogs and even the Australian Prime Minister – everyone is talking about disruptive innovation, what it means and how it is changing business and our lives.  Along with robots (see my post on robots here), the concept of disruptive innovation seems to have become one of the mainstream technology trends to talk about in 2015 –  replacing big data as the hot topic (and see my post on big data here).  But has disruptive innovation yet impacted on the construction industry? And if it hasn’t yet, will it? I worry that sadly the answer might be no.

The construction industry is one of the least efficient industries – and this is a worldwide issue. This year I heard someone describe the construction industry as ‘the last craft industry’ and this is certainly true.  Whilst so much of production and manufacturing has become rigidly process oriented and quality controlled, prototyped and tested – even in developed countries, almost every building that we build is still a one off design, constructed piece by piece on site.  The inefficiencies of all phases of building – from procurement through to design and construction are outstanding.  Even when a building is not designed by an architect, if it’s larger than a house, it’s almost certainly a one off design.  Even in Australia, where site labour is a significant expense, prefabrication is the exception and not the norm.  We actually have less standardisation than in the larger American and European markets! As architects and designers in Australia we expect to be able to customise almost any product, and often at no extra cost because so much is custom manufactured for each and every project. All of this results in additional costs, both to those supplying services and products related to buildings which are then passed onto those purchasing buildings.  I have seen estimates suggest that the construction industry wastes a mind boggling 20-30% of building costs  – possibly equating to somewhere around $1.7 trillion (USD) worldwide each year! I found one estimate that 50-68% of time on site is wasted!!! Just google construction industry waste and you will find heaps of articles from around the world in relation to both time and materials.

All this would suggest, that buildings and construction should therefore be ripe for disruptive innovations – there is clearly a massive problem here.  BIM, prefabrication and robots have been seen as possible saviours of the industry, that would increase efficiencies but are they effective and are they disruptive innovation?  In the UK, the government determined in 2011 that BIM would generate savings and efficiency for government projects, and they have mandated its use on all government projects over 5 million pounds.  There is plenty of evidence from the UK and also from around the world that is demonstrating that BIM is reducing construction costs (for example refer to this series of articles by David Mitchell on ROI of BIM) – and one assumes without reducing quality of outcomes.  The UK mandate targets that by 2016 all projects will be what is defined as “Level 2 BIM”, but there is no date yet set for “Level 3 BIM”.  So BIM has already been around for easily 10 years already now, and still with no end date for this higher level uptake by industry – 15 years of change seems to slow to me to be defined as disruptive innovation. I’m not so sure that BIM is “our Facebook revolution” (see this article on Digital Built Britain)

Perhaps before we go much further, we need to define – what is disruptive innovation anyway?If I ask google the answer (via wikipedia) is ” A disruptive innovation is an innovation that creates a new market and value network and eventually disrupts an existing market and value network, displacing established market leaders and alliances. The term was defined and phenomenon analysed by Clayton M. Christensen beginning in 1995.”  The frequent examples we are all familiar with include Airbnb, Uber, iTunes and Facebook.  To me, I’m not quite sure that all of these actually meet the requirement for a ‘new market’ – how is the Uber market different from the taxi market? But the key point is that they create a new way of service or product delivery that is completely different from what has come before rather than just being a little bit different – cheaper, easier or more competitive.  For example Amazon is not usually viewed as disruptive innovation, its just a slightly different way of providing goods, at a conceptual level it’s basically the same as the very old fashioned mail order catalouge.

So is BIM a disruptive innovation? I think not. When I first attended RTC back in 2009, and really started to see the possibilities of BIM beyond just 3D modelling and how we could move towards buildings being built from models not documents, and I was seeing all the resultant changes this would bring to our contractual and teaming arrangements, I think I would have considered that BIM would be a disruption to our industry.  But now 6 years later, how much has really changed?  Buildings built from models are still very much the exception rather than the rule, as are alternative procurement and contracting arrangements.  In the same time, Airbnb (started 2008) and Uber (started 2009) have taken over and are serious dominators in their respective markets.  I think there are a few reasons for this slow uptake of change in the construction industry.  One is that with BIM, we still have the option to do things the old way.  We can combine a bit of BIM with traditional paper documents and contracts.  It’s not an all or nothing alternative.  The other is the scale and structure of the market purchasers.

I have been thinking a lot lately about what these kinds of disruptive innovations have in common and how they differ from architecture and construction.  The key issue to me, is that almost all of these commonly discussed disruptive innovators rely on the power of individual consumers and not government and big business.  Can you think of any disruptive innovations that have been driven by or even embraced by Government? Or even big business? (A related question to ponder another day – is activity based working a disruptive innovation?)  If anyone has any suggestions, I’d love to hear them – I can’t think of even one.  So recently when I came across on article on crowd funding for the property industry, I wondered – could this be the driver for disruptive innovation in construction?  Crowdfunding brings in the individual consumer, could this be the missing link?

However upon reading the article, I don’t think so.  Whilst the project funding might be obtained from smaller individual consumers, the project is still run by a larger developer –  it’s just a new way for them to get their start-up capital, like the idea of off the plan apartments really.  Whilst the smaller investors may start putting the pressure on for greater efficiency this is more likely to push incremental improvements rather than disruptive innovation.  The article concludes with the suggestion that within 6 years these crowd funding ventures might be owned by banks, so disruptive innovation seems highly unlikely!

What about other aspects of technology?  Could robots and prefabrication cause disruptive innovation in construction?  Again these are technologies that have been developing for some time – prefabrication for probably over 100 years now! Whilst both offer opportunities for efficiency gains in design and construction, like BIM, they also offer us the opportunity to take small parts and combine prefabricated or robot built items alongside traditional methods.  Robots might be laying bricks, but did they pour the concrete slab yet?

So far, the best opportunity I have seen for disruptive innovation in design and construction is going to come from algorithms rather than robots, through the form of software like Google Flux.  Flux automates the building design based upon site conditions.  (You can find out more about Flux in this video from my presentation and blog on Will a Robot take my job or here on Randy Deutsch’s blog ) There is no reason why either much of the model or the documentation would not be largely automated out of this software as well.  Whilst I believe humans (as architects) will always be involved in designing high quality buildings, much of the work we do as architects could be automated.  I have recently heard said “the computers don’t have to be perfect, they just have to be better than us”.  Why should a human spend time drawing up all the details and layout of a toilet when a computer could do it faster and make sure it meet the building code? The parts could then be prefabricated or assembled on site by robots increasing construction efficiencies.  Developed outside the traditional markets, could Google displace Autodesk as the primary software provider for building design and the disruptive innovator that changes the traditional delivery of architecture? I think it’s possible.

I think it’s also possible, that architects won’t see the potential of these tools, they will see the admittedly ugly buildings that the beta version of the software produces, and believe it’s just a tool for developers to quickly design and build boxy buildings.  If architects don’t engage with these technologies, that is probably what they will become.  But what proportion of our clients are coming to us for high end design? If developers, governments and big business don’t need architects any more what happens to our industry? What happens if construction innovates but architecture doesn’t?  If construction innovates and becomes more efficient, will that leave architecture behind? Does architecture become even more of a boutique industry catering to rich people’s houses?

What about disruptive innovation in construction itself? If not robots or prefab, what could it be?  Is disrupting design sufficient to disrupt construction? Or are there other disruptive innovations out there on the horizon?

Ceilidh Higgins

Image Credits:
Creative Commons Creative Commons Attribution 2.0 Generic License   by  Kay Kim(김기웅) 

Are you sitting in a half empty office? What would you do with all that vacant space?

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vacant 2 by devlon duthie, on Flickr

Two weeks ago I attended the Retrofit and Refurb conference in Sydney at Australian Technology Park. This is the first time I’ve attended this conference, and it’s a very diverse conference in terms of both the speakers and the attendees. The speakers were a mix of architects, engineers, sustainability consultants and suppliers, with the topics as diverse as the speakers and including energy upgrades, environmental upgrade agreements, GreenStar, workplace design issues, hotel refits and project case studies. I would say the target audience was building owners, however there really was something for anyone involved in refurbishing existing buildings – maybe not 2 full days though. The other feature of the conference program was that the sessions were not grouped in any logical fashion but different topics were spread across the two full days. So, for example you couldn’t choose to attend just a half day session to hear the topics about workplace design and GreenStar interiors. I assume this was deliberate in order to encourage attendees to spend the full two days at conference mingling and networking and visiting the supplier expo booths. For me it did mean a couple of sessions on my iPad catching up on emails and replying to comments on my blog – I’m not quite so interested in the detailed operations of air conditioning system upgrades! However, I certainly did find many of the presentations interesting though and have gathered new ideas for this blog as well as meeting some new people and catching up with others.

It was the first presentation of the conference which has inspired me this week. Simon Wild from Cundall’s presentation on multisite integration was one of the most interesting presentations of the conference covering a very diverse range of issues around building refurbishments and sustainability, with a focus on how integrating systems across multiple sites can offer environmental benefits (he has a great blog too). The case study presented was the Sydney Central Westfield, where by combining services systems across retail and office towers greater efficiency was achieved due to different functional uses and different peak loadings. Simon then spoke about how his could be taken further if larger numbers of buildings could share services, which is now becoming possible even remotely for electricity, due to remote transmission infrastucture where electricity is shared over data networks rather than physical transmission (I have heard a bit about this lately…but don’t ask me to explain any more than this about how it works!).

This discussion about multiple uses better utilising services got me thinking during the presentation about utilisation of office space – and how underutilized it is especially at night and on weekends…And then later in the presentation, Simon raised this very issue.

First some facts from Simon’s presentation:
A 1000 person activity based working (ABW) fitout with only 800 desks is equivalent to 15 years of the office operating carbon neutral.
Approx 50% of space in the CBD is vacant at any one time (and I think this is during work hours!)
City wide ABW in Sydney would save as much energy as making all the buildings in Sydney 6 star Nabers rated.

This week, this vacancy rate certainly made sense in my office, with a large number of staff away due partially to the exodus that seems to occur in most offices every school holidays or the week of long weekends. ABW starts to reduce this underutilized space belonging to a single organisation, but creates more empty space as organisations downsize their tenancies. We therefore have 2 kinds of space to consider – the space left vacant by tenants downsizing their tenancies and the temporarily vacant space by people in not being in the workplace.

So, how do we manage all this vacant space, what do we do with it? One suggestion at the conference was to convert commercial buildings into residential. But I’d like to contemplate how this could impact upon the way a traditional office or commercial building is designed and programmed, and how perhaps it could accommodate tenants working in an ABW a model, but other tenants as well, because ABW won’t be the answer for every workplace. Also how could such a building could accommodate other aspects of the changing workplace, such as the ageing population, more flexible working arrangements, options for working parents, and a closer integration of work and life. The commercial office tower as we know it really dates from the early to mid 20th century when western life was base around a separation of work and life with male workers with a stay at home mum and a couple of kids out in suburbia. The fact that these buildings stand at 50% empty consuming resources isn’t so surprising given how different our lives are today.

Mixed use commercial buildings are pretty common these days – the building that doesn’t have a coffee shop in the lobby is a rarity (certainly in Australia anyway), and it’s becoming quite common to have a couple of levels of retail and a food court beneath an office tower too. This is all great, but what else could we insert into our office buildings? In particular are there functions which would operate after hours or support the lifestyle choices of workers? Maybe all these extra functions shouldn’t all be at the bottom of the tower either? In Japan it’s not uncommon for common for restaurants and bars to be located within office tower buildings. Personally, I’m a big fan of a bar in the lobby – so much easier to convince your colleagues they do have time for a drink when they don’t have to go anywhere and maybe you will be able to pull in few more as they pass by.

At the other end of the healthy lifestyle scale, perhaps our office buildings can support some healthy choices too – some buildings already have commercial gyms, how about yoga, massage or acupuncture as well? Some of these kinds of spaces could even become flexible use spaces – meeting rooms during the day and yoga studio after work.

Currently, these kinds of facilities are either provided commercially or by single tenants for the use of their own staff, within their tenancies. Is there the opportunity for these spaces to be provided in a different model – either by the landlord, or perhaps by one large tenant but benefitting all tenants? This could enable better use if space throughout a building and enable landlords to fill up otherwise vacant space and entice new tenants. Maybe a landlord could provide a series of well being rooms suitable for massage, physio, doctors or acupuncture. Individual practitioners could rent the rooms perhaps on differing short or longer term arrangements. Maybe some operate commercially selling their services to individuals but maybe others are paid for by the corporate tenants as a benefit for their staff.

Landlord provided spaces and services, or commercial tenancies are quite straightforward in terms of who pays, the security of the space and shared access. Management of the spaces becomes the issue, with a landlord having more diverse functions and infrastructure to manage and operate. But how about tenants sharing out their tenancy space? What are the issues? And could the landlords actually help with this too?

Whilst the landlord could manage a major meeting and training facility for the use of all tenants, maybe this is better off managed by one of the tenant organizations. Perhaps they have a very high level of in-house meeting needs, specific expectations of service, or they are a training provider. Firstly, if this is to be a shared service, then the costs of the space and servicing it have to be considered – in my view it’s the landlord who is best placed to manage this, through rent discounts for tenants providing services such as this, and maybe a higher rent to other tenants. I’m not convinced these models should be a direct user pays system based on booking, but maybe that could work too – Although I think as soon as something like this becomes user pays, corporates just start to build their own.

The meeting facility is usually a discrete space though – what about letting people in to use all those vacant desks, informal breakout areas or casual meeting places? Or perhaps even breaking down the idea of one organisation, one tenancy? Traditionally the tenancy is required as a secure container for stuff (refer to my blog post on Natalie Slessor’s talk on the future workplace for more on this). More recently, this stuff was also electronic – data servers and computers. We had to protect our equipment, our papers, our computers and our data from being accessed by outsiders. What we could never really separate from outsiders was our people – today, it’s our people that are the most valuable asset. These days although we still want to protect our data, we don’t keep it on servers in our offices (creating yet more vacant space), we keep it on the cloud or in data centers. So why do we need that company network anymore? What if IT was provided by he landlord, as a utility, like electricity? Then there is no technical reason why I can’t come and work in your office for the day if it suits us both (oh, I didn’t mention, we have gotten rid of all those fixed computers and phones we need to keep secure too). The only reason left is confidentiality, which I think is mostly only a concern held by those who are up to something dodgy in the first place – or if it is a genuine issue – needs genuinely confidential space, not open plan offices anyway.

Does this help fill up the vacant space though? If I have just moved from my office to yours because you have better coffee and a bar and a massage room, we still might have some vacant space? Though it really does encourage choice, and highlight which offices are popular and place of choice to work then doesn’t it?

Maybe we can fill up some space with some more diverse functions, that encourage other things and parts of our lives too. Just a few more random thoughts – a commercial kitchen could be used by office caterers during the day and charities at night (I know there is one in Sydney OzHarvest that cooks for homeless), a model making workshop for the architectural practices could also replace our individual home garages and workshops, childcare shortages are a big issue in Australia and it would certainly help more women return to work if more centers are provided within workplaces…I’m sure you can think of more ideas? With the growth of the sharing economy and of co-working perhaps we will start to see a whole range of different ideas.

Is your workplace half empty right now? How would you share your office space? What kinds of facilities and services would you like to see in your workplace? Who would pay? Who should operate them?

Image credits
Creative Commons Attribution-Noncommercial 2.0 Generic License  by  devlon duthie