The Sunday Times of last weekend (30th July, 2023) carried an article that posed the question of ‘Why is Britain so Poor?’
With pictures of coins, primarily one penny coins to emphasise the point, the article looks at the country through an economic lens with accompanying statistics that portrays a nation that is falling behind its competitors. For example, the opening paragraph points out that in 1991 Poles were poorer citizens than Britons but that by the end of the current decade Poles will earn more than Britons as their gross domestic product per capita rapidly grows whilst Slovenia, another close British neighbour, is set to overtake us as early as next year.
The article does not waste time in coming to the issue of productivity pointing out that over the last 15 years since 2008 productivity in Britain has increased overall by 5% or a rate of 0.3% a year where 2% is considered to be normal – an overall growth of 20% over this period and some 15% more than Britain has achieved.
It also points out that:
- Wages are only 3 times higher than in 1992 but in the same period, house prices in London have risen to be 7 times higher.
- We are building too few homes at around an average of 150,000 a year with the Centre for Cities Think Tank believing that we have built 4m too few relative to our population. Across the channel, France builds around 400,000 each year with housing being cheaper (France has a population of 64.7 million whilst the UK has a population of 67.7 million).
- It has become more difficult to build infrastructure in the UK with the article citing Lower Thames Crossing as an example having held 5 consultations since 2017 with some £ 250 million to date having been spent on the planning application.
It has become more difficult to build infrastructure in the UK with the article citing Lower Thames Crossing as an example having held 5 consultations since 2017 with some £ 250 million to date having been spent on the planning application.
The article poses, as do so many, more questions than answers, particularly through the data it cites. The title itself proffers an intriguing linguistic deletion, for if we add two more words we get a far more specific question: ‘Why is Britain so Poor at Construction?’
The Office for National Statistics (ONS) has in the past reported that ‘productivity in the construction sector has changed little over the past 50 years’ and in their research carried out in 2021 reported that: ‘Productivity in the construction industry dragged down both the level and growth of UK productivity for many years prior to the 2008 financial crisis. Since then, labour productivity has grown slightly faster in the construction industry than in the economy as a whole. However, the level of productivity in construction remains below the UK average.’(1)
Poor productivity is clearly a long-term major construction sector issue that needs addressing given that this lies behind the low house building numbers, the consequent rising of house prices and failing planning applications.
The major business consultancy, McKinsey, in 2017 in an article, ‘Improving Construction Productivity’ (2) proposed solutions through a ‘7 levers approach to improvement’ that included: transparency and openness; behavioural upskilling; improved procurement and supply chain management; and better on-site execution – all key features of collaborative working, something that the construction sector has been shy to recognise, understand and deploy as a strategy for improved productivity.
As many organisations across other business sectors have discovered collaboration and collaborative working through an interdependent network of entities such as clients, suppliers, partners and people through shared processes, data, and resources is not a soft way of working but an extremely powerful intentional business strategy with the potential to achieve some or all of the following:
- Improved Quality
- Reduced project/contract delivery time
- Decreased costs
- Heightened productivity
- Joint problem-solving
- Reduced error
- Eradication of disputes
- Speedier decision-making
- Shared learning
- Elimination of error and waste (NVA)
- Mitigation and sharing of risk
- Relationship simplicity
- Co-creativity and Innovation
- Building trust and long-term relationships
- Heightened competitive edge
- Widened margin and potentially greater profitability
To find out more about the Construction Industry Collaborative Initiative – CICI – and how it can help your business click link or contact info@leadersmeets.com
References
- Productivity in the construction industry, UK: 2021: An investigation into productivity growth and its drivers for the UK construction industry. www.ons.gov.uk/economy/economicoutputandproductivity/productivitymeasures/articles/productivityintheconstructionindustryuk2021/2021-10-19
- McKinsey & Co, ‘Improving Construction Productivity’ (2017) 17th July, 2017. www.mckinsey.com/capabilities/operations/our-insights/improving-construction-productivity