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Publisher’s version / Version de l'éditeur:

Ottawa Construction News, 13, February 2, p. 8, 18, 2003-02-01

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The NSCIC: towards a new era in construction

Bullis, R.

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The NSCIC: towards a new era in construction

Bullis, R.

A version of this document is published in / Une version de ce document se trouve dans : Ottawa Construction News, v. 13, no. 2, Feb. 2003, p. 8, 18

www.nrc.ca/irc/ircpubs

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The NSCIC: towards a new era in construction By Robert Bullis

The 21st century has erupted upon the world in a technological whirlwind, catching more than one industry – including the construction sector – off guard with the rapidity of its growth and development. And, as in every other industry, this sector’s ability to compete in the new world marketplace depends on its ability to rise to the whirlwind’s challenge.

That is just what a dedicated group of industry champions has come together to do.

The NSCIC: Towards a New Era in Construction

Chaired by Dev Fraser, president of PCL in Edmonton, and co-chaired by John Westeinde, president of the Westeinde Group of Ottawa, the National Steering Committee for Innovation in

Construction (NSCIC) is a transitional group made up of members from both the public and private sectors across Canada.

Established in response to a call for a strategic national

approach to innovation in the construction sector (following the first Construction Innovation Forum held in Ottawa in June 2001), the group’s mandate is to spearhead a national strategic plan that will lead the sector into the 21st century.

“There are already programs in the U.S. and Britain

promoting improvement and innovation on a very aggressive basis, and if Canada is to remain both domestically and internationally competitive, we must innovate across the board,” says committee member Dale Craig, president of Ottawa’s J.L. Richards &

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Associates. “Not only do we need to address planning, design, materials, construction techniques and delivery methods, we also need to ensure that research, education, labour policies and the government taxation and regulatory systems create the environment for innovation to flourish.”

One of the group’s first responsibilities was a reply to the federal government’s public consultation process for Canada’s Innovation Strategy. The resulting document, Innovation in

Construction: Priorities for Action, identifies the unique

challenges faced by the construction sector (focusing on the non-residential sub-sector which accounts for about 65 per cent of the industry’s total output), and recommends both short and long-term initiatives to help meet those challenges.

The Face of Construction Today

Today’s construction sector is much larger and a great deal more complex than the traditional definition that primarily

included general contractors and specialty trades.

Contributing more than 11 per cent of the nation’s gross domestic product, the industry is currently one of Canada’s largest and most important sectors. It includes building and infrastructure designers (engineering and architecture);

manufacturers of building products, machinery and equipment; and those skilled in operation, maintenance, and disposal. Other key players involved in the sector include scientists, educators, professional associations, financial institutions – and the list goes on.

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With such broad parameters, the industry’s overall economic impact in Canada is huge. Fifty per cent of Canadian apprentices are employed in construction; 215,000 enterprises employ well over a million workers; over $5 trillion worth of assets are maintained by the sector; and revenues total $107.3 billion.

Not even its size, however, can shield the industry from the realities – or the challenges – of today’s rapidly changing technologies. Failure to develop and adopt new ways of doing business will limit the industry’s productivity growth and could lead to serious trouble in the sector’s health, which will in turn affect its ability to withstand global competition and reduce its ability to contribute to the country’s economy.

“For our industry to remain competitive and at the

forefront as Canada’s primary economy sector, we will have to consider systemic change in the culture and structure of our industry,” says Mr. Westeinde.

The Challenges

Canadians depend on construction to produce the safe, clean, efficient infrastructure that both serves the individual and that attracts new business. But while the report found that the sector has the ability to meet these expectations, there is room – and a definite need – for improvement.

In spite of the fact that productivity growth in

construction has trailed the business sector by more than 50 per cent since 1960 (with the greatest lag happening in the past two

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decades), widespread agreement in the industry indicates that the sector is capable of much greater achievement.

“In order to sustain the business climate and profitability of the industry, while providing value-added and sustainable construction projects,” says Mr. Westeinde, “we will have to adopt a co-ordinated and integrated approach to a ‘whole industry’ R&I culture, and create a national framework for effective technology and information transfer.”

Globalization presents one of the major challenges to be faced. For Canada’s construction industry is to stay competitive in an ever-widening world market, a number of significant changes must be made, particularly to how the industry currently does business.

At present, the sector’s low profit-margins, slow dissemination of new knowledge and technology, and lack of

cohesion, hamper its effectiveness in world markets. Strategies such as limited capital expenditures, short-term hiring policies, and lack of investment in human resources and R&D are

counterproductive to a long-term innovation culture.

Quality and value are other issues, often outweighed by the pressures of time, cost and schedule, or unrecognized because of technically unsophisticated clients. A continued heavy reliance on lowest bid policies perpetuates this cost vs. quality problem.

The industry also faces a critical shortage of skilled labour, due in part to changing demographics and the lack of

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training for apprentices, as well as the effect of the industry’s image on its ability to attract quality employees.

Opportunities in Disguise

But while these challenges can seem overwhelming, the NSCIC report points out that most of them present an opportunity as well as a problem.

New contracting practices such as design-build, build-own-operate-transfer, and public-private-partnerships are already being adopted, along with worldwide horizontal and vertical consolidation of companies. An aging Canadian population will mean increased demands for specialized facilities and improved building automation. IT advances will have a profound impact on how construction does business through e-commerce, improved software, and product knowledge and availability (some countries have already developed national initiatives to exploit IT

opportunities for construction).

Major trends in the industry, especially regarding the environment, also provide a host of opportunities. The move towards sustainable development requires appropriate technologies and energy efficiency; and with the increasing importance of building and infrastructure life cycles, innovative repair and rehabilitation technologies are needed.

And while competition from other developed countries is fierce, globalization has opened up new markets – and enormous opportunities - for Canadian construction services and products in Asia and other developing areas.

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The Future of Construction in Canada

In order to help construction meet these challenges, the NSCIC report calls for an industry-wide approach to increasing innovation, with a sustained partnership between private and public sectors, academia, and government laboratories. While innovation can be championed by a single firm, the report says, industry acceptance and dissemination will only happen if a wide variety of stakeholders (including regulatory, standards, legal, contractual, labour, safety and environmental authorities) agree to it.

The NSCIC report suggests a number of key, short-term initiatives: a pilot program where the government will act as a model client, purchasing on best value rather than low bid; a review of the regulatory framework to address barriers to innovation; increased support for R&D, demonstration and dissemination activities; development and implementation of a human resources action plan; and seed funding for the NSCIC.

Longer term recommendations include national goals for the sector’s economic performance, societal benefits, and

environmental impacts (similar to what has been done in

Australia, the UK and the USA); and key performance indicators to introduce a ‘culture of measurement’ into the industry.

Keeping the Ball Rolling

The NSCIC will report the results of its work at the 2nd Canadian Construction Forum to be held in Calgary from May 25-27, 2003, and will present a proposal for the implementation of a

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national construction innovation strategy. The forum, targeted to leaders from across the construction sector, will be asked to comment on the report and provide direction on its

implementation.

For more information about the forum, log on to

www.nscic.ca or contact Chris Norris at (613)993-0125.

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