Johannesburg 2016: Enabling innovation in the SA construction sector

September 2016

On September 15, fifty executives, including owners, designers, contractors, investors and technology providers, gathered to explore how to improve construction productivity in South Africa. The program commenced with an “experience lounge”, giving participants the opportunity to explore nine new technologies available on the market. Following this, participants delved into a frank discussion on the key challenges and opportunities of improving construction productivity in South Africa.

Context: Worldwide, productivity and margins in the engineering and construction sector have lagged behind other industries over the past 30 years. The reasons range from external factors such as fragmented value chains to internal factors such as limited investment in innovation and technology. Creative and proven management processes and innovative technology-enabled solutions—from drones to next gen BIM, digitization and advanced data analytics—can boost productivity from 20-25 percent and increase profitability. What are the most tangible proven solutions? What will it take to revolutionize construction when fragmentation, cultural resistance, and risk aversion stand in the way?

Some of the key themes included:

  1. Productivity is lagging in the South African construction industry. Lagging productivity is driven by inefficiencies in the planning and permitting process, a skills deficit and labor challenges. Participants expressed that technology is not top of mind as a solution to the productivity challenge. It was mutually agreed that a defined timeline for the permitting process would dramatically improve productivity and uncertainty
  2. Innovation and technology can help improve the delivery cycle of infrastructure and large capital projects. Technology has the potential to increase the efficiency/speed of the delivery cycle by shortening the project preparation phase. However, successful adoption requires integration and collaboration by the owner, contractor and other stakeholders.
  3. Certain technologies are showing potential. BIM promises big productivity improvements by driving design and management efficiencies but few companies in the room seemed to be actively using BIM. Participants expressed concern that BIM and other design technologies can cause the unintended consequence of increasing the number of changes and drive up costs. An opportunity exists for the industry to address this issue. Visualization tools are being used as an effective communication tool to get the buy-in of owners and the workforce. Potential exists to expand this to enrolling the public.
  4. Building skills are key to improving productivity and embracing technology. It is the collective responsibility of the owner and the contractor to invest in upskilling the labor force. Increasing the number of women engaged in the sector remains a big opportunity. Additionally, megaprojects could invest in their own training facilities. For example, Crossrail has invested in a Tunneling and Underground Construction Academy that has trained over 15,000 people. An opportunity exists to repurpose the Skills Education Training Authorities (SETAs) for such an investment.
  5. Collaboration and incentives are essential to drive innovation and technology in construction. For broad scale adoption, all stakeholders need to educate each other on the benefits of technology. Incentives in the contract could encourage adoption and collaboration versus the current system of penalties. Additionally, ten-year government pipelines will help with visibility into projects and an understanding of the technologies and skills required in the future.

The collective appetite to embrace innovation and technology is encouraging and this conversation will continue at the GII summit, to be held in Singapore on May 24-26, 2017. Click here for details 

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