A person working on a Finnish construction site is roughly equivalent in productivity to three people working in Singapore, when comparing the annual value of construction to the number of people working on construction sites. Still, it is worth taking a model from Singapore on how to increase productivity.
Productivity cuts through the key drivers of change at the moment, from the climate crisis to the destruction of nature and from urbanization to the change in the age structure of the population. When productivity improves, we are able to produce the same or better quality end product with fewer resources, i.e. labor, materials, energy and emissions.
In a global comparison, there are not many countries where improving productivity has been understood as such an important contributor to well-being as Singapore. In 2010, the government of Singapore set a goal that construction productivity should improve by 40 percent by 2030. The measure is the surface area that one employee "completes" per day, i.e. the total surface area of the project is divided by the total number of working days.
The biggest driver of the goal is to reduce dependence on foreign labor, as almost all builders in Singapore are from neighboring countries. The employees' professionalism and occupational safety culture are weak compared to Finland.
In Singapore, increasing the degree of pre-manufacturing and utilizing robotics and other new technologies were mentioned as the most important means of improving productivity. This has led to the fact that government developers and property owners have established their own innovation hubs.
The Hubs regularly organize challenge competitions, where companies from all over the world present their solutions and the best get to the Hub to test their own POC (proof-of-concept) innovations. The most potential of these, on the other hand, get to pilot on real construction sites or properties. Between 2022 and 2026, the government of Singapore will spend as much as 18 billion US dollars on these various RDI projects.
In Singapore, increasing the degree of pre-manufacturing and utilizing robotics and other new technologies were identified as the most important means of improving productivity.
In Singapore's public housing production, the improvement in labor productivity is now about a quarter. Of course, Singapore is highly regulated, and in practice the state manages all land use and most construction. But would a similar innovation ecosystem be possible in Finland as well?
We already have the KIRA Growth Program, which is building an operating model for built environment challenge competitions. We have KIRAHub, an accelerator of digitization of the built environment, which could serve as a first-stage test environment for new innovations. We have national and non-profit developers as well as building and infrastructure owners, such as Senaatti, Väylä, A-Kruunu, HOAS, HYK and HEKA. These could act as a pilot environment for the most potential innovations and invest in the renewal of the industry more boldly than at present. The government needs support for RDI funding and risk sharing.
On the other hand, large private players in the construction industry are in the Building 2030 consortium led by Aalto University, creating and sharing best practices for productivity development. In addition, Rakennusteollisuus RT is starting, together with Aalto, to develop a new method with which we could measure labor productivity throughout the entire value chain. Measurability would also give an additional boost to the goals.
The text has been published in Rakennuslehti's Näkökulma column on February 29.1.2024, XNUMX.
Antti Aaltonen
Director, Construction Development
antti.aaltonen@rt.fi + 358 40 514 3626Confederation of Finnish Construction Industries (CFCI)
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