Building firms must innovate to fuel growth
Construction companies that invest in innovation are more successful in export markets. That's borne out by Enterprise Ireland research, which shows that businesses which invest in research, development and innovation (RD&I) grow exports by two thirds more than those who don't.
The international success enjoyed by Irish companies in the construction of data centres is an excellent example of the direct connection between innovation and exports.
Please log in or register with Independent.ie for free access to this article.
Irish companies have invested heavily in their capability in these high-tech projects, and developed their expertise to the point where they have become preferred contractors internationally.
They have proven their ability to deliver these exacting projects to world-class standards, and that is translating into export success.
In fact, a significant portion of the construction sector's export growth in 2018 was due to that success. Last year was a phenomenal period for the sector as a whole, with exports climbing by 22pc to €1.97bn.
Very encouragingly, our dependence on the UK market continues to decline, with Irish construction sector companies decreasing their reliance on our nearest neighbour from 64pc to 60pc of export sales, as a result of their diversification strategies.
The eurozone now accounts for 20pc of construction exports, while northern Europe is responsible for 12pc. That latter figure has been boosted by data centre construction in the Nordics, whereas the same activity has seen the Netherlands increase by 20pc.
Data centres are just part of the picture, of course. Irish construction companies have a proven world-class capability in delivering large-scale projects across all sectors.
The industry has a long history of looking outwards for new opportunities to grow, and has been an early adopter of new technologies, processes and methods.
Nowhere is that track record better evidenced than in the industry's success in working with Ireland's large cohort of multinational companies. Irish businesses have delivered some of the world's most advanced pharmaceuticals and microelectronics manufacturing facilities, on time and on budget. They have been able to use that experience as a reference when pitching for projects in the UK, Europe and further afield.
The investments in RD&I fall into two categories: process innovation, and product research
and development. In process innovation, Irish companies have successfully adopted the latest building information modelling (BIM) techniques, which are revolutionising construction.
BIM brings the design, delivery and lifetime management of a building together on a shared digital platform. This results in much more efficient construction processes on-site, and far lower maintenance and operation costs over the full lifecycle of a building. It is increasingly demanded as a minimum requirement by clients around the world.
The Irish industry also meets the very highest Leadership in Energy and Environmental Design standards when it comes to delivering green buildings. Again, this is a minimum requirement for many international clients.
Another area of innovation is offsite construction. Demand for new buildings across all sectors continues to increase, at the same time as the skillsets required are in short supply. One solution to this issue is the offsite construction of building elements, such as individual rooms or even entire office suites or apartment units. This requires high-precision construction systems, coupled with just-in-time delivery processes. Irish contractors have proven adept at both.
Construction product innovation is also driving export success. Companies like Kingspan are working on the development of next-generation insulation products and materials, and bringing them to global markets. Energy-efficient curtain walls and facades are being manufactured in Ireland and exported to clients in North America, who are seeking to catch up on the rest of the world when it comes to energy-efficient buildings.
The Irish construction sector has proven it can innovate and succeed in global markets. What is needed now is increased investment in RD&I, in order to meet the challenges which will undoubtedly arise following the UK's departure from the EU, as well as to avail of the opportunities presented in Europe and other key markets around the world.
- Stephen Creaner is the executive director for food, industrial, life sciences and innovation at Enterprise Ireland
Sunday Indo Business