INNOVATION SUMMARY CONSTRUCTION INNOVATION INNOVATION IN THE CONSTRUCTION INDUSTRY CHALLENGES AND OPPORTUNITIES DANIEL BALOI HELSINKI, 11 AUGUST 2010

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1 INNOVATION INNOVATION IN THE CONSTRUCTION INDUSTRY CHALLENGES AND OPPORTUNITIES SUMMARY BACKGROUND INNOVATION ENVIRONMENT DANIEL BALOI HELSINKI, 11 AUGUST 2010 INNOVATION IN THE CONSTRUCTION SECTOR CURRENT DEVELOPMENTS OPPORTUNITIES AND CHALLENGES CONCLUSIONS

2 BACKGROUND CONSTRUCTION INDUSTRY RESPONSIBLE FOR PLANNING, DESIGN, CONSTRUCTION OF BUILT ENVIRONMENT INCLUDES CONSULTANCY, CONTRACTORS, MANUFACTURERS, SUPPLIERS OF CONSTRUCTION MATERIALS BACKGROUND CONSTRUCTON INDUSTRY HAS HUGE ECONOMIC IMPACT CONTRIBUTES LARGELY TO GDP (8%) ON AVERAGE IN THE LAST FIVE YEARS EMPLOYS A HIGH NUMBER OF PEOPLE (TENS OF THOUSANDS) RESPONSIBLE FOR GROSS FIXED CAPITAL FORMATION

3 CONSRUCTION INNOVATION CONSRUCTION INNOVATION BACKGROUND THE INDUSTRY HAS BEEN INSTRUMENTAL IN GOVERNMENT FISCAL POLICIES IT HELPS TO ESTIMULATE DEMAND IN DOWNTURN PERIODS BACKGROUND WHY INTEREST IN INNOVATION? INNOVATION IS THE DRIVER OF DEVELOPMENT NOWADAYS ECONOMIES DEPEND ON KNOWEDGE TIMES OF COMPARATIVE ADVANTAGE ARE GONE COMPETITIVE ADVANTAGES ARE THE NORM COMPANIES NEED TO INNOVATE TO THRIVE

4 BACKGROUND CONSRUCTION INNOVATION STRONG AND INNOVATIVE BUSINESSES ARE KEY TO COUNTRY DVELOPMENT ADEQUATE POLICIES AND STRATEGIES, LAWS AND REGULATONS FUNDAMENTAL TO HELP BUSINESSES THESE INCLUDE INNOVATION SYSTEMS INNOVATION ENVIRONMENT AN INNOVATION SYSTEM COMPRISES KNOWLEDGE PRODUCERS KNOWELDGE USERS POLICY-MAKERS DECISION-MAKERS ORGANIZATIONAL STRUCTURES COMMUNICATION CHANNELS INTER-ACTIVITY

5 INNOVATION ENVIRONMENT AN INNOVATION SYSTEM PLAYERS THE TRIPLE HELIX PERSPECTIVE GOVERNMENT ACADEMIC AND RESEARCH INSTITUTIONS PRIVATE SECTOR INNOVATION ENVIRONMENT IN MOZAMBIQUE SOME WORK HAS BEEN DONE IN THIS REGARD SCIENCE, TECHNOLOGY AND INNOVATION POLICY IS IN PLACE SCIENCE, TECHNOLOGY AND INNOVATION STRATEGY (MOSTIS) IS IN PLACE AN INNOVATION SYSTEM IN DEVELOPMENT (STIFIMO)

6 INNOVATION ENVIRONMENT STI STRATEGY HAS SOME KEY MEDIUM-TERM OBJECTIVES AS WELL AS PRIORITY AREAS PRIORITIES AREAS ARE ALIGNED WITH COUNTRY DEVELOPMENT VISION AND GOALS THE PRIORITY AREAS INCLUDE WATER ENERGY AGRICULTURE HOUSING AND INFRASTRUCTURES DEVELOPMENT GOALS THE KEY OBJECTIVE IS POVERTY REDUCTION THE MOST AFFECTED ARE RURAL COMMUNITIES APPROXIMATELY 75% OF THE POPULATION LIVE IN RURAL AREAS AS SUCH EFFORTS HAVE BEEN CONCENTRATED IN THAT AREAS

7 PROBLEMS WHAT SHOULD BE DONE? ONE OF THE MOST PRESSING PROBLEMS IS DECENT HOUSING INFRASTRUCTURES PROVISION IS ALSO A BIG CONCERN THE VAST MAJORITY OF PEOPLE CAN NOT AFFORD DECENT HOUSING INNOVATION IS KEY TO THE PROBLEM INNOVATION IN PRODUCTS, ORGANIZATION AND PROCESSES IS FUNDAMENTAL FEASIBLE AND SUSTAINABLE SOLUTONS CAN BE FOUND POTENTIAL IS THERE FOR SEVERAL REASONS IT IS VERY UNAFFORDABLE

8 CONSTRUCTION INDUSTRY INNOVATION WORLDWIDE CONSTRUCTION INDUSTRY INNOVATION WORLDWIDE IS PERCEIVED AS VERY LOW INDUSTRY SEEN AS CONSERVATIVE RESISTANT TO CHANGE MANUFACTURE IS SEEN AS LEADING IT SHOULD BE RECOGNIZED THAT SOME ADVANCES HAVE BEEN MADE IN THE LAST DECADE INNOVATIONS IN MATERIALS AND TECHNOLOGIES HAVE BEEN ACHIEVED ITS COMPLEXITY CAN BE A MAJOR HINDRANCE TO MORE RAPID CHANGES A LARGE PROPORTION OF INNOVATION HAS NOT BEEN RADICAL

9 CONSTRUCTION INDUSTRY INNOVATION WORLDWIDE WHAT SORT OF INNOVATION IS CRUCIAL IN MOZ? SOME FEW EXAMPLES OF IMPROVEMENTS ARE PROCUREMENT ROUTES PROCESSES REENGINEERING LOGISTICS PROJECT MANAGEMENT INNOVATION THAT ADDRESSES KEY DEVELOPMENT CONCERNS AS SUCH, THE MAIN PARTIES OF THE INNOVATION SYSTEM MUST WORK TOGETHER OTHERWISE PARTIES WILL ADDRESS OWN CONCERNS THE GOVERNMENT HAS A FUNDAMENTAL ROLE MOST OF GAPS AND NEEDS ALREADY IDENTIFIED

10 WHAT SORT OF INNOVATION IS CRUCIAL IN MOZ? IN PARTICULAR, THE PRIVATE SECTOR WORK UNDER SEVERE PRESSURE POSED BY COMPETITION GLOBALIZATION HAS INCREASED THIS PRESSURE COMPANIES TEND TO FOCUS ON THEIR SURVIVAL CONSTRUCTION INDUSTRY INNOVATION WHICH INNOVATION MODEL? THERE ARE SEVERAL INNOVATION MODELS DISTINCTON HAS BEEN MADE BASED ON THE DEGREE/EXTENT TO WHICH PRODUCTS AND SERVICES ARE CHANGED CONSTRUCTION INDUSTRY SPECIFICITY REQUIRES CAREFUL TREATMENT

11 THE FOLLOWING MODELS SEEM APPROPRIATE FOR THE INDUSTRY INCREMENTAL MODULAR ARCHITECTURAL SYSTEM RADICAL CONSRUCTION INNOVATION WHICH INNOVATION INTENSITY? THE DEGREE OF CHANGED REQUIRED SHOULD BE ABLE TO PROVIDE RESPONSES TO PROBLEMS ORGANIZACIONAL ISSUES MAY BE NEED INCREMENTAL CONSTRUCTION MATERIALS MAY REQUIRE SOME RADICAL INNOVATION WORK IS IN PROGRESS IN DIFFERENT AREAS LIKE MATERIALS

12 OPPORTUNITIES THERE ARE MANY OPPORTUNITIES FOR INNOVATON IN CONSTRUCTION THE GAP BETWEEN DEMAND AND SUPPLLY OF INFRASTRUCTURE IS HUGE. THIS INCLUDES EDUCATION HEALTHCARE HOUSING COMMERCIAL OPPORTUNIES MOZAMBIQUE IS A KM2 COUNTRY WITH 21 MILLIONS INHABITANTS THE POPULATION IS GROWNG AT A 2,5% RATE PER YEAR MORE THAN 65% OF THE POPULATION IS JUVENILE APPROX 85% OF HOUSES ARE SUB-STANDARD AND ONLY 10% CONVENTIONAL

13 OPPOTUNITIES CONSRUCTION INNOVATION THE ADVENT OF SUSTAINABILITY PROVIDES ROOM FOR IMPROVEMENTS SUSTAINABLE CONSTRUCTION REQUIRES BALANCE TECHNICAL ECONOMIC SOCIAL ENVIRONMENTAL OPPORTUNIES AGAIN, INNOVATION IS REQUIRED IN ORDER TO TAKE THESE OPPORTUNITIES INNOVATION SHOULD ADDRESS THE ISSUES OF COST, QUALITY AND SUSTAINABILITY MATERIALS AND CONSTRUCTION TECHNOLOGIES ARE KEY FOR THIS PURPOSE INDEED UP TO 60% OF CONSTRUCTION COST IS ASSOCIATED WITH MATERIALS AND 25% ATTRIBUTED TO LABOUR

14 OPPORTUNIES CHALLENGES FOR INNOVATION THERE IS HUGE POTENTIAL FOR USE OF LOCAL, LOW COST MATERIALS, WHICH INCLUDE SOIL TIMBER ENGINEERED TIMBER STRAW RECICLED MATERIALS FURTHERMORE, CONSERVATIVE AND COSTLY CONSTRUCTION SOLUTIONS SHOULD BE CHANGED THESE INCLUDE MASSIVE USE OF CONCRETE AND STELL THERE ARE SEVERAL CHALLENGES FOR EFFECTIVE INNOVATION TO BE FRUITFUL. THESE INCLUDE ESTABLISHMENT OF AN EFFECTIVE SYSTEM WITH STRONG COMMITMENT FROM ALL PARTIES CULTURAL CHANGE WITHIN THE INDUSTRY LEGISLATION AND REGULATIONS SHOULD BE CONDUCIVE HUMAN RESOURCES TRAINING EDUCATION ALLOCATON OF FINANCIAL RESOURCES

15 WHAT IS BEING DONE? WORK IS UNDERWAY TO ESTABSLIH CONSTRUCTION INDUSTRY INNOVATIVE CLUSTERS VARIOUS PLAYERS ARE NOW ONBOARD CIVIL ENGINEERING EDUCATION WHAT IS BEING DONE? RESEARCH ON ALTERNATIVE SUSTAINABLE CONSTRUCTION MATERIALS AND TECHNOLOGIES IS VERY ACTIVE THERE IS MUCH WORK AHEAD AND LOTS OF EFFORTS SHOULD BE MADE FOR THE SUCCESS OF THE PROGRAMME THE CONSTRUCTION VALUE CHAIN WILL WORK TOGETHER TO ADDRESS COMMON PROBLEMS

16 WHAT IS BEING DONE? A FIVE YEAR PROGRAMME ON STI HAS JUST STARTED - STIFIMO THE PROGRAMME IS SUPPORTED BY THE FINNISH GOVERMENT THANK YOU END MAIN AIM IS TO ESTABLISH AND DEVELOP AN INNOVATION SYSTEM AUGUST,

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