CESC White paper - Construction Leaders Summit

Collaboration.. Leading the way for a bright future for construction Dr Anas Bataw

Director, Centre of Excellence in Smart Construction (CESC) Heriot-Watt University, Dubai, UAE a.bataw@hw.ac.uk

The global construction industry needs strong partnerships, impactful leadership, and a culture of disruption to regain its footing on the path for growth and sustainable development. Against this backdrop, construction leaders and senior government representatives gathered at the inaugural The Big 5 2021 Global Construction Leaders’ Summit to discuss support for future industry growth, collaboration and partnerships, the workforce of the future, and the impact of digitalisation, inspiring efficiency and advancing sustainable development.

‘On behalf of dmg events, we are extremely proud to have hosted The Big 5’s inaugural Global Construction Leaders’ Summit, 12 September 2021, Dubai World Trade Centre. With the evolutionary times faced by the construction community, the pandemic has not only forced players to re-evaluate approaches - but has provided a unique opportunity to re-imagine the future. Truly capturing this moment and putting the global construction industry back on the path of growth requires more than a global recovery; it requires strong partnerships, impactful leadership and fostering a culture of disruption. Through our partnership with the Centre of Excellence in Smart Construction, Heriot-Watt University, we are honoured to present the Summit findings through this White Paper and look forward to seeing the industry again at The Big 5 from 5-8 December 2022 at the Dubai World Trade Centre.’

Josine Heijmans, Vice President-Construction, dmg events

The future of the construction industry and opportunities for the region According to H.E. Sami Al Qamzi, Director-General, Department of Economic Development – Government of Dubai the construction sector in the recent years has regained momentum with the announcement of Expo 2020 and other infrastructure projects.

With the new Dubai Building Code and the Dubai 2040 Urban Masterplan to enhance future city living in Dubai, the construction sector will lead the way in achieving a Circular Economy by employing the innovative approaches.

The construction sector has played a pivotal role in the region’s economic development. Across the region, numerous measures that specifically relate to the construction sector have been introduced following the pandemic. Before the pandemic, the construction sector accounted for around 7.7% of global employment, with projections for 2020 indicating that it would contribute to 13.4% of global GDP. The pandemic and the challenges it brought forth have led to the sector’s contraction in most markets.

1

Collaboration: Leading the way for a bright future for construction

During the COVID-19 lockdown period, the construction sector was deemed a ‘vital sector’ and accordingly exempted from government restrictions. Construction sites were permitted to remain operational, provided they followed precautionary measures.

While there are plenty of opportunities for growth in the postpandemic era, there are also several challenges, uncertainties and risks that come from the need for the construction sector to evolve. The world is changing rapidly, and with that, investors are naturally cautious with their investments. As the construction sector needs certainty, navigating this can be a big challenge for the industry.

The road to Sustainability and Technology The construction sector is renowned for being one of the largest consumers of natural resources. It primarily uses 60 percent of the world’s natural resources directly or indirectly as construction materials for developing buildings and infrastructure. As the world turns an eye toward sustainability, construction must follow suit.

Rising awareness of sustainability and climate change has already led to increased energy-efficient and environmentally friendly building projects globally. Homes, offices, and malls will have to reimagine their vision of space and make flexibility and sustainability their top priorities in the next phase and lead to minimum waste and establish a truly sustainable and environmentally friendly building process and outcomes.

The sudden changes brought on by the COVID-19 pandemic have significantly influenced the sustainable agenda, bringing sustainability into the spotlight. Overall, sustainability has become the very foundation with which people want to go forward. There is the need for things to be ‘not business as usual’ as businesses can no longer operate in the same way they have in the past.

Today, sustainable cities are not just something that looks greener. Instead, there are fundamental principles and practices that need to exist in these cities, such as the food, energy, and water nexus and how we are dealing with our resources.

These circular principles need to be built into the principles and practices of a sustainable city. As a society and as an industry, we need to go from reaction to a place of growth. We need to have a clear strategy on how we create resilience and how we deal with change. Also, there are opportunities to pivot in moments of change, so how do we come together to change the status quo?

The public sector in this region, particularly in the UAE, has shown that Sustainability and Technology in Construction are high on its agenda. The UAE Government is incentivising sustainable development by applying new standards, practices, and approaches to embed circular principles into everything. To mention a few; The Expo 2020, being held under the theme ‘Connecting Minds, Creating the Future, is about forging new connections and partnerships across sectors and geographies to inspire solutions that will shape the future. Delivering the most sustainable Expo 2020 is a pledge that Dubai made during the world bid. Accordingly, sustainability has been integrated across the planning, design, construction, and operational processes for Expo 2020 and beyond for District 2020.

The New Dubai Building Code, approved in October 2020, has introduced a unified set of standards and rules that will promote sustainable construction and development in the city, encourage innovation in building design, and achieve alignment with global green construction city standards. This initiative will help boost Dubai’s investment attractiveness globally, diversify projects, reduce construction costs, and enhance the city’s overall liveability.

The Dubai 2040 Urban Master Plan was launched in March 2021 to map out a comprehensive plan for sustainable urban development in Dubai to enhance the future of city living. It focuses on enhancing people’s happiness and quality of life and reinforcing Dubai as a global destination for citizens, residents, and visitors over the next 20 years. The plan has a strategic structural layout, integrating all urban development master plans in the emirate and aligning it with Dubai’s strategic economic priorities and future needs.

The UAE Ministry of Energy and Infrastructure, also announce the “National Smart Construction Guidelines” in March 2020 with the aim to develop drivers of policies, flexible elements and targets that stimulate the development of the construction sector in a way that meets the aspirations of the UAE government. The guide contains key elements for smart construction, which are essential for all parties to improve the construction process, drive sustainability and employ technologies to improve the overall results of the construction industry.

On the technology front, the construction sector can lead the way in achieving a Circular Economy by successfully employing the new digital enabled approaches. The recently launched digital automated checking system by Dubai Municipality encourages the sector in adopting technologies such as BIM and GIS. This digital transition in Dubai also positions the city to engage in city-scale digital twin to boost energy efficiency and living quality across real estate.

Also, earlier in April 2016, His Highness Sheikh Mohammed bin Rashid Al Maktoum unveiled the Dubai 3D Printing Strategy to promote the UAE and Dubai as a leading hub of 3D printing technology. The Strategy seeks to ensure that 25 per cent of buildings in Dubai are based on 3D printing technology by 2030.

With all the developments and initiatives launched by the Government, the UAE real estate and construction market is expected to move to the next level of its innovative and vibrant development trajectory. For the private sector, the question is how to capitalise on that as a player in the market and create long-term value.

The pandemic has shown us how interconnected we are and that both the public and private sectors need to focus on Digitalising and decarbonising their businesses. As change requires investment, this new direction needs to be a partnership between governments and the private sector working towards a clear target plan so that everyone benefits.

Collaboration: Leading the way for a bright future for construction

2

Collaboration: Working together to deliver national visions During the summit it was clear that collaboration is a key success factor to address the challenges we face in the construction sector and realise value from the sustainability and digitaisation initiatives mentioned above. Where the private and public sectors can develop new partnership structures to ensure best in class delivery of the region’s mega-projects and therefore changing mindsets to create an effective ecosystem for all stakeholders to succeed.

For an industry worth $11 trillion globally, up to 80% of projects do not finish on budget. Although this is a global problem, we are sitting on an excellent opportunity to find ways to fix it.

Clients and key project stakeholders need to figure out better working models where everyone succeeds.

Approaches such as Public-Private Partnerships (PPP) can offer a solid solution for wastage in the industry. Entering a PPP means that there is money and liquidity in the project. As the PPP model has matured in the Middle East, there is a fair reward for all involved, and we will be seeing more PPPs across the mega and Giga projects across the region.

To improve collaboration among the key project stakeholders – the developers, contractors, consultants, and suppliers – need a mindset shift that begins with building a culture of trust and results in a win-win situation for everyone. This way, we ensure that we produce a synergy that results in the creation of additional value.

The client holds the key to creating a healthy ecosystem within the industry where everything is in balance and everyone adds maximum value. The clients must accept responsibility for their projects and have the maturity to set them up for success.

However, every partnership comes down to trust and trust is built over time. The project should be at the centre of what everyone involved is trying to achieve. All the key members should have the capacity to collaborate – to look after the project interests where everyone succeeds.

Meanwhile, the talent drain, both at a company and individual levels is a significant challenge that the industry will face.

Failing to invest in people, research and development will stagnate growth and development. In order to succeed through collaboration, public and private sectors must also collaborate to improve regulation and create labour reforms to ease the mobility of talent to drive fundamental changes and navigate towards innovations for a more digital and sustainable industry

‘Collaboration is the greatest opportunity, if we can figure out how to work way better together, to align the objectives all of the stakeholders to deliver on time and to budget, -it’s important that especially clients understand the value that can be delivered through collaborative models and it’s important that we all embrace collaboration.’

Kez Taylor, CEO, ALEC ‘Despite the challenges arising from the pandemic and global change, pioneering projects are taking place in the Gulf Cooperation Council (GCC) region, leading the charge for change, bringing in new technologies, driving sustainability, and overcoming some of the traditional shortcomings of the construction industry. As the pace of change evolves, we need to quickly adopt a more collaborative approach.’

Anas Bataw, Director, CESC

3

Collaboration: Leading the way for a bright future for construction

Acknowledgements The Centre of Excellence in Smart Construction and The Big 5 would like to acknowledge all who participated in the Global Construction Leaders Summit and contributed to the delivery of the white paper.

Collaboration: Leading the way for a bright future for construction

4