March 8, 2004—The commonly accepted notion of “best practice” is a myth according to an UK academic report comparing the construction and aerospace industries.
The study, by the Innovative Construction Research Centre at the University of Reading, claims that universal models of best practice can discourage adaptation to changing circumstances.
‘Learning Across Business Sectors: Knowledge Sharing Between Aerospace and Construction’ is the result of a two-year research project funded by the Engineering and Physical Sciences Research Council (EPSRC) as part of a wider initiative to promote learning across business sectors.
The research was a collaborative project between The University of Reading and seven industrial partners: BAE SYSTEMS, Forticrete, INBIS, Mowlem Building, Mowlem Aqumen Property Services, N.G. Bailey & Co and Scott Brownrigg.
It is particularly relevant at the moment, according to lead author Professor Stuart Green, because of a trend in both sectors towards ‘output-based’ contracting such as the Private Finance Initiative: “The trend means that construction companies must think more strategically while aerospace companies need to be more flexible as both include support and service packages with their traditional products.
“Comparisons between the aerospace and construction sectors are especially useful because they are so different,” says Prof. Green. “The two sectors differ hugely in terms of their structure and technological intensity. The aerospace sector has experienced extensive consolidation and is dominated by a small number of global companies. Aerospace companies operate within complex networks of global interdependency such that collaborative working is a commercial imperative.
“In contrast, the construction sector remains highly fragmented and is characterized by a continued reliance on small firms. The vast majority of construction firms compete within localized markets that are too often characterized by opportunistic behavior.”
The report makes detailed comparisons between the two sectors and provides guidance for introducing knowledge-sharing strategies within and across organizations. In aerospace, the dominant model of competitiveness means that firms have little choice other than to invest in continuous innovation, despite difficult trading conditions. Research and development (R&D) expenditure in aerospace continues to rise as a percentage of turnover.
In the construction sector, the report argues, emergence of the ‘hollowed-out’ firm has undermined the industrys capacity for innovation. Integrated procurement models, such as prime contracting, potentially provide a more supportive climate for innovation but a shift in thinking is required, not only amongst construction contractors, but also amongst the industrys major clients.
Competitiveness in the construction sector too often rests on efficiency in managing contracts, with a particular emphasis on the allocation of risk. Innovation in construction tends to be problem-driven and is rarely shared from project to project, the report concludes.
—Richard Byatt
Reprinted with permission; copyright 2004 i-FM
