When it comes to industry innovation, we must not ask ‘if’, but rather ‘how?’

Earlier this week, a global property industry conference focusing on technology and innovative future developments took place in London.

One of the panel discussions was with housing developers, titled ‘How to Unlock Value through Creativity’. It’s worth pointing out that developers are in formally classified as ‘small home builders’ in the UK if they produce no more than 350 units per year. The panel was made of a mix of housing PLC executives, boutique home builders and modular building manufacturers, championing offsite construction across the UK.

The theme of the day was certainly centred on the absolute need to innovate. The question was not ‘if’ but rather ‘how?’. In the broader sense, setting audacious targets and then attracting key personnel in to help deliver on those targets was a recurring comment. Given that Ireland and the UK are experiencing the same critical labour shortage as is seen internationally at the moment, this featured quite heavily in the Q&A. Interestingly, several of the panel members spoke of the need to look outside typical industry recruitment sources when looking for talent to drive innovation, quoted the electronics and gaming industries as rich talent pools.

The discussion on modular (volumetric) building appeared to divide the panel and the audience. There is a sense that prefabrication has been around for a long time, we have seen it before and the results were not great the first time. Proponents of this non-traditional building method argued that the future of housing is about great design and world-class manufacturing: “This is production, not construction.”

The push for offsite construction is generally centred on the irrefutable lack of productivity improvements or efficiencies in the building industry over the past three to four decades when  compared with manufacturing. Of course, this is true. With the exception of BIM-enabled specialist sectors emerging within the industry like data centres, logistics and pharmaceutical, each building site is effectively a self-contained factory, learning and training for a one-off site. When the project is complete, there is an element of disbanding, finding more land and then starting all over again. Much of the research is site-specific, which means that it is lost or rendered not-quite-relevant after the building is handed over. On the other side, manufacturing harnesses, documents and leverages every bit of learning to replicate positive results and improve on them consistently. What this translates into in the residential marketplace is a development company delivering homes that get better and better every time.

The boutique home builder on the panel rejected this by saying that none of the technologies coming downstream are viable, suggesting that larger builders can afford to invest in the future but, at the moment with exceptionally low margins, smaller home builders are struggling to clear enough margin on one unit or one development to help fund the next project. The business case for innovating the traditional process is, perhaps, stronger in the UK where the government has just launched an inquiry into offsite construction, with a view to potential mandatory use on suitable PPP projects. Is Ireland likely to follow this lead, who knows?

The final advice from the panel was for smaller home builders to start preparing for innovating –  while letting the larger companies take the lead on this in terms of research and development – so that they are ready.

Ian Lawlor
086 3625482

Director / Business Development
Lotus Investment Group