[Translate to English:] Construction is a sector quite complicate to be analyzed, because it involves many competences and skills, both in industrial and service sectors, and materials, products and services (meaning both components and full buildings) are very diversified at geographical level, being influenced by climate condition and local cultural heritages.
For these reasons, the supply side of construction market (all along the value chain, including services, consultancy and material manufacturing and construction itself) is dispersed, often represented by micro and small enterprises, having a range of activity limited in terms of geographical coverage and, consequently, turnover and market impact capacities.
The cluster policies launched by EU aim to support the creation of organized chains of value at local level, in order to overcome the above mentioned lacks. Regarding the building sector, many Regions have launched initiatives to aggregate and consolidate competences of local enterprises, fostering the creation of synergies between different actors along the value chain, with the goal to ameliorate the quality of their interventions, to introduce an innovative approach with regards to products and services and to increase the competitiveness at EU level of these industrial actors.
Which are the barriers affecting the construction value chain? How are MARIE regional building value chains are positioned inside EU context?
Building sector: drivers, barriers and challenges
Building EU market evolution is driven by following major factors:
- Major structural change: there are global challenges able to guarantee a sustainable growth in the medium period, addressing principally to such issues as health and safety, energy efficiency, green building, good indoor climate, and renovation processes and materials, design to fit. If rightly addressed, these challenges could also open new market opportunities in developing countries for the sector.
- Demands for convenience: increasingly clients and users are demanding better performance of constructions. Users expect convenient solutions in the short, medium and long term from the construction sector. Key demands include low maintenance, automation, flexibility, health improving features, optimal environmental integration, etc.
- Regulatory environment: the sector is faced with an increasingly stricter regulatory environment. The challenges concern not only the definition of the regulations but also the effective implementation of these at national level.
- Facing these drivers, building sector weaknesses are both related to internal factors, characterizing the value and the supply chain, and others connected with external factors, more related to the market conditions and the demand.
At the end of the analysis is possible to identify the following categories of barriers:
- Fragmented structure of the supply side: the construction sector is highly fragmented at all levels, with only very few large construction companies. The participation of enterprises in trade organizations is very low in most Member States, making it difficult to spread good practices. Moreover, poor value chain integration has a negative impact on the potentials of spill over innovation effects from collaboration. This is reflected in large differences between Member States in the competitive performance of the sector.
- Regulation and compliance: lack of harmonization in standards and certifications across Member States. The lack of adherence of competitors to the regulatory environment provides threats as it may unbalance the EU and global playing field for investors, developers and suppliers of construction products and services
- Scale of renovation projects: policy makers and public owners could play an important role in the definition of renovation programs and interventions at a “neighbourhood” scale, encouraging experimentation of innovative energy efficient solutions at a larger scale than for individual buildings
- Poor innovation performance in the sector: there is a need to foster R&D participation, technology transfer as well as non-R&D based innovation through market and employee driven innovation, regrouping firms in networks and clusters to address issues of scale.
- Limited skills in large parts of the sector and poor application of innovative technologies may hinder it in becoming more competitive and in meeting new demands for high performance construction products and services in the market.
- Generic skills such as problem orientation, problem solving, communication, design and entrepreneurial skills - are critical for cross-occupational collaboration in work teams and for exploiting value added creation at the firm level.
- Short term point of view: market and employee driven innovation is poorly deployed due to primary focus on the cheapest price for product (in response to products coming from outside MED region) instead of the economically most advantageous proposal, but also because of poor productivity levels due to scarce deployment of enabling technologies and insufficient use of flexible work organization practices.
The sector is missing opportunities to add significant value to the economy.
- Access to finance and profitability: The financial crisis, delayed payments by clients, ineffective financial management and limited profitability of parts of the construction sector have put strains on the access to finance for the sector. The significant decreases in the value of buildings in Europe and elsewhere had an enormous influence on the access to finance and investors for new construction projects.
- Financing of energy refurbishment projects: ESCO energy refurbishment projects are often too small to guarantee the minimum profit margin necessary to implement interventions
- Lack in communication: suppliers mainly focus on energy efficiency and technical aspects, instead of considering the global context of the building in terms of comfort and communicate the added value of their products/materials in terms of general comfort for the final customers
- Refurbishment perception: final users and building designers perceive refurbishment works as intrusive, complex and “annoying”
- Use of refurbishes buildings: traditional and “as usual” way of living and inhabit buildings in MED area is poorly compatible with innovative refurbishment and building solutions, such as BACS (Building Automation and Control System) or other technologies aimed to improve building performance
- Reluctance for collaborative work: “Business as usual” culture and traditional building philosophy hardly matches with the born of new professions and the capacity of working SMEs to change practices in cooperation with professionals.
Those limits could be overcome through specific actions, promoted and supported also by local and EU programmes. According with the competitiveness challenges on the sector, by 2020 a sustainable and competitive European construction sector shall:
- Conceptualize, design, build, operate and transform constructions based on life cycle performance (cost/benefit) and high quality models;
- be an attractive sector to work within providing excellent opportunities for job quality, health and safety, remuneration and career development;
- offer constructions (buildings & infrastructure) tailored to the changing social and economic needs of people, businesses and societies (incl. relevant special needs segments of populations);
- supply new and innovative solutions that meet the demands associated with the global grand challenges (climate, security, etc.):
- be instrumental in the EU reaching its 2050 targets for energy efficiency in buildings;
- reach or go beyond the 70% target for waste recycling;
- meet requirements for quality of inner climate in buildings;
- be an attractive partner to clients in existing and emerging growth markets;
- deliver outstanding economic performance
Local Policies, via the use of the competencies of the clusters, can play a prominent role in the achievement of these goals supporting the competitiveness of the sector and improving quality and productivity with specific programmes aiming to support:
- Access to a qualified labour force;
- access to finance and to new financial models;
- closer customer and end user relations and process innovation;
- “professionalisation” of clients and customers ;
- access to applied R&D and tech trans such as new technologies, materials, smart
- and eco-efficient solutions and buildings;
- new service models to complement present construction, retrofitting and renovation activities;
- coordination across actors to achieve lean construction;
- orientation towards future growth markets outside the EU.
The following measures were identified to overcome the former identified barriers.