There has been a plethora of debate recently about stimulating innovation in the construction industry, but it seems to me that all discussions have missed the fundamental point:

“There is no incentive for construction industry players to innovate.”

Innovation is expensive so there needs to be adequate reward for investment in innovation. In manufacturing, innovation is rewarded by lower production costs or higher product sales, which when multiplied by thousands or millions of products adds up to a considerable incentive.

In construction, a team is assembled to deliver a single product. They may never have worked together before and may never work together again. Some of them may be competitors. The main beneficiary of any innovation is certainly not going to be any of the design team; it is most likely to be the end user who may not even be known at the time of design. How then is the team incentivised to innovate?

Innovation may be in the interests of the developer if this means that buildings are more attractive to customers, but our dysfunctional property market means that the premium for location outweighs that for building performance by such a margin that innovation becomes irrelevant. Further, the developer has the counter incentive to pay the lowest design and construction cost possible to maximise his return in the market.

The reality is that the construction industry won’t innovate unless there is a strong reason for doing so, but that can’t happen with the present property market. Government could lead the way by procuring public sector construction in a way that directly rewards innovators, rather than persisting in least first cost procurement, but that would require joined up thinking which has never been their strength. However that would be a much more productive approach than continuing to lambaste an industry for something beyond its control.