Is our industry really fit for the future?

In times of great change it is vital to stay nimble, yet at times construction seems stuck in the past. ACE chief executive Dr Nelson Ogunshakin makes the case for some bold thinking.

When looking back on 2016, I predict that it will be seen as a pivotal year for our industry. Starting with the EU referendum this June, the country’s business leaders must contemplate the future of how the UK continues to interact with the rest of the world. It is inconceivable that we will suddenly cease interacting globally. No matter what the result of the referendum, now is the time for industry leaders to examine their business models and adapt them in order to succeed in the global marketplace.

Over the last three decades we have witnessed digital transformation of other industries – automobile, industrial manufacturing, music and media, computing technology etc – with improved production efficiency, cost reductions and innovative solutions.

However, our industry has yet to effect any major and significant changes in traditional procurement of major capital projects across the infrastructure, built and natural environments. While client leadership is a critical success factor for progressive change, the industry supply chain equally has the responsibility to drive appropriate change through innovative and cost effective services offerings, providing value-added solutions for investors and assets owners. This challenge calls for a radical change in our traditional business model, and one must ask whether our industry is fit for the future.

Frontier markets leap ahead
Across the world, infrastructure activity remains at different stages of maturity, with developed countries having longstanding assets that are now coming to the end of their life cycle. Meanwhile, other countries are considered to be frontier markets, implementing forms of infrastructure that reach beyond what is common, and also those that embrace the most up-to-date and innovative practices possible.

Frontier markets, without ageing infrastructure in place to hinder their progress, are able to seemingly leapfrog the standards that developed markets have used in infrastructure for years– skipping ahead by using the latest technology, such as those utilised within smart cities, to maximise efficiency while positioning infrastructure as a perceived utility, instead of just a designed solution or product. 

Businesses involved with continually evolving technologies have ensured that while frontier markets are still volatile there is still great potential for them within the asset’s life cycle. However, to participate competitively in frontier markets, existing industry players must reassess their business models, as the different regulatory environment, entry barriers, new procurement processes, integrated design and construction, off-site manufacturing, institutional capacity and other supply chain factors may render the traditional industry business model obsolete. Factors that engender success in fast-moving markets may indicate the need for businesses to specialise within the relevant supply chain.

Changing global market
These considerations should also be applied when evaluating the business model being utilised in developed markets. For despite this model having worked in the past, the global market is changing, and every country is becoming more globalised in its aspirations. It is estimated that by 2050, roughly 70% of the world’s population will be urban. This shift will be accompanied by an unprecedented high level of demand for efficient daily amenities such as utilities, water, transport and housing.

As such, the business model required to affect competitive success will likely change, with today’s businesses forced to adapt or surrender potential profits. It is ultimately the responsibility of all business leaders to stress test their businesses, ensuring that the key drivers within the current and future global marketplace are both understood and anticipated within the business strategies they adopt.

Business leaders must also fine-tune their ability to forecast market drivers and adapt to the changing circumstances at hand. Without this ability, leaders, businesses and the workforce will suffer during the changing times ahead.

R&D must be a priority
Essential to the adopting of the appropriate business model is fostering innovation through research and development. Actions must match words, building R&D into the corporate plan and the cost base of one’s business, helping businesses to stay relevant through achieving increased efficiencies and higher value. The increasing costs of business now seen across the industry indicate that not enough effort or resources are being put towards R&D.

Not taking the need for business model adaptability seriously, through the development of a clear corporate strategic plan to achieve innovative solutions, will I believe be to the detriment of a company’s success. It will inhibit ability to respond to key market drivers and restrict its abilities in both frontier and developed markets.

As the world changes we must change with it. We need to be bold, embrace the digital world and seek new, creative and innovative procurement solutions for our industry offerings. Only through such a move can we be ready for the future challenges ahead. 

As the late Steve Jobs from Apple said: “The ones who are crazy enough to think that they can change the world are the ones who usually do.”


An interesting commentary Nelson - R&D by implication means that organisations require creative instinctive decision makers - to develop the culture which encourages innovation. Three choices in my humble opinion - lead, follow or get out of the way .