The importance of the construction industry to the Scottish economy can be demonstrated with a few vital statistics. It employs around 170,000 people, contributes £21.5 billion to our gross domestic product and makes up 10 per cent of our gross value added. For every £1 spent on construction output, a further £2.94 is generated. There’s also the significant economic growth that’s unlocked every time a major new building, road, railway, port, bridge or airport is built.
An efficient and competitive construction industry is of paramount importance in ensuring Scotland’s future prosperity. The Scottish Government knows this – after all, the sector supports and delivers against many of its key policy and economic strategy agendas, such as the circular economy, youth employment, infrastructure investment and inclusive growth. Thankfully, it also understands that the industry must modernise to survive.
The 2016 Farmer Review of the construction labour market highlighted many challenges – low productivity, a dysfunctional training model, lack of research and development and investment in innovation, a fragmented leadership and a huge image problem that’s discouraging to young people. All of this must change.
Encouragingly, Construction Scotland Innovation Centre is responding to an ever-increasing number of enquiries from industry, keen to explore innovative ways their businesses can evolve.
Last month’s announcement that CSIC would receive almost £11 million of core funding to support the sector to innovate and grow is therefore fantastic news not just for the industry, but for Scotland. We expect the funding, from the Scottish Funding Council, Scottish Enterprise and HIE, to support the sector to deliver £998m of additional gross turnover, create 1,847 new jobs and retain 4,721 existing jobs over the next five years.
CSIC has big ambitions. We will focus on the cultural barriers across the industry and address issues like new innovative procurement models, diversity and inclusion, internationalisation, collaboration, productivity and investment in innovation. We will champion industrialisation and manufacturing opportunities, such as offsite, robotics, and design for manufacturing and assembly – these will drive productivity, quality and efficiency measures.
The £170m Industrial Strategy Challenge Fund’s Transforming Construction programme will be a key focus. The plan consists of four key components: a £72m Core Innovation Hub, £36m Active Building Centre; £2.5m Network Plus initiative and a £59m collaborative research and development call programme. Exploiting these opportunities is crucial. CSIC has also been hosting awareness raising and consortium building events to help firms take advantage of the collaborative research and development call programme. An exciting Scottish industry-led proposal, developed with CSIC support, has already secured almost £4m to develop advanced industrialised methods for home construction.
I believe the construction industry is on the verge of a digital and manufacturing revolution. With this next phase of vital funding in place, we can help scale-up and mainstream innovation, which in turn will unlock growth.
However, we’re relying on industry and its clients to step up and drive that revolution forward. Innovative technologies and processes offer huge opportunities to develop better, faster, cheaper solutions. But these will not change the face of the sector in isolation. We need the right people to use them.
The key is adopting the right mindset and ensuring the visionary leadership is in place to implement the culture change that’s needed across the industry – both on the client and delivery side. People are at the heart of innovation and we need bright, talented, committed people to come forward and support us.
- Stephen Good, chief executive, Construction Scotland Innovation Centre