Professor Kerry London, CEO of Global Scientia, explains how intermediaries can catalyse collaboration between construction industry market leaders and research-intensive universities to transform multinationals, and create the future workforce for sustainable development, regional economic growth and healthy communities
Infrastructure development can be beneficial to economic growth and prosperity. The industry has wide and deep supply chains that extend from producing raw and manufactured building materials and components, providing professional services such as design, engineering, planning and project management, to executing the physical work on site.
The demand for various types of infrastructure is generated from outside the sector; it is the level of investment from clients that impacts the demand for construction industry products and services. Urban development and economic growth are in a complex relationship that differs across locations.
The health of the construction industry is important for the industry as well as local, regional and national economies. The industry contributes to national, regional and local economies through significant intersectoral linkages. Construction activity can play an important role in stimulating local areas, often referred to as the multiplier effect.
Innovation diffusion
Innovation can strongly influence construction activities. The construction industry is experiencing the potential for a remarkable transformation, fuelled by the rapid introduction of cutting-edge construction technologies, human-centred robotics, artificial intelligence and machine learning, digital twins, extended reality (Virtual reality/ Augmented Reality and Mixed Reality), ever-evolving Building Information Modelling, Sensor data, off-site manufacturing and nanomaterials.
Surprisingly, the industry is renowned for slow adoption of innovative technologies. Keeping pace with contemporary entrepreneurial companies is important for regional innovation clusters. It is widely acknowledged that the construction industry needs to improve.
Innovation diffusion is a broad concept that encompasses both the process by which ideas underpinning product and business process innovations spread (innovation knowledge diffusion), and the adoption of such products or business processes by other firms (innovation output diffusion).
To understand the bottlenecks for innovation diffusion in different regions, there are three factors:
- The local and national framework conditions, which affect firms’ incentives and capacities to adopt innovations.
- The functioning of the innovation diffusion channels through which knowledge and its uptake flow.
- The presence and functioning of a variety of intermediaries that help companies build the capacity for innovation adoption, identify external resources, and share knowledge.
Innovation diffusion can be different within large multinationals across different localities due to region-specific supply chain networks.
Global value and supply chains
Prof London has been analysing construction supply chains and adoption of innovations for decades. Early modelling was documented in her book “Construction Supply Chain Economics”, commissioned by world-renowned publisher Taylor and Francis. The text provided the first extensive analysis of construction supply chain economics for 13 supply chain networks and over 1,500 firm-to-firm procurement relationships. Her research demonstrated that industrial organisational structural and firm behavioural characteristics influence business cluster collaboration and industry performance with respect to productivity and innovation. The local and national framework conditions, she explained, were contrary to the current rhetoric at the time that the industry was fragmented, unpredictable and high risk; her work provided evidence that many long-term relationships are embedded within the short-term temporary project environments. These inter-organisational relationships in many cases were the catalyst and experimental ground for innovators and early adopters of novel technology.
A major source of innovation opportunities is inter-organisational collaboration, as further research indicated. The outcome of a nationally funded study led by Prof London was a collaborative practice model for integrated supply chains. Through extensive empirical testing with industry innovators, a collaborative practice model was developed which included nine key elements: Leadership, Goals and Norms, Expertise, Change, Resource Investment, Shared Space, Problem Solving, Organising Mechanisms and Technical Standards. A training package for collaborative practice was developed. The Collaborative Practice Training Framework was designed to be delivered through a Virtual Building Leadership Simulation Centre and included: The Collaborative Practice Model, Collaborative Practice Actions (CPA), Position Competency Matrix, a CPA Index, Indicator Descriptors, Training Scenarios and Resources.
As COVID clearly showed, supply chains were a particularly vulnerable risk factor for the industry. Global value chains (GVCs) remain highly globalised in the post-COVID-19 era but are being reconfigured in more complex ways. New OECD evidence shows that, in real terms, the use of imported goods and services in world production is near its historical peak in 2024.
An OECD report highlighted that “…a changing bilateral dynamics among major economies and the growing role of connector economies”. Global value chains (GVCs) account for about 70% of international trade, as services, raw materials, parts, and components cross borders – often multiple times. As the trend toward cross-border supply chains continues to increase, new challenges are emerging around sustainability, efficiency, and resilience. This growing complexity calls for government policies that take a whole-of-chain approach to supply chain management and global trade.
Forward-thinking construction multinationals are looking to ensure resilient supply chains for productivity and innovation diffusion.
Agility, adaptability and alignment for resilient supply chains
Resilience is managing supply chain risk, not eliminating it. The most effective supply chains are those that are agile – able to respond quickly; adaptable – able to evolve over time; and aligned – with shared interests among firms, governments and stakeholders. These qualities are critical for navigating disruptions without retreating from global trade. The OECD Supply Chain Resilience Review provides cross-country comparisons for barriers to trade in global value chains. Spain is a high performer in terms of the level of restrictiveness and outperforms Germany, the USA, the UK and Australia.
Navigating risk builds resilience in supply chains
Resilient supply chains are essential for economic stability, especially in the face of potential risks like extreme weather, geopolitical tensions, cyber threats, and regulatory uncertainty. Resilience is better achieved through smarter policy frameworks that strengthen overall supply chain performance. Policymakers, capital works clients, captains of industry and leading researchers need to establish frameworks to facilitate trade, develop digital readiness, and strengthen international cooperation, rather than isolation. Such engagement shall create the playground for experimentation, creativity and innovation throughout the supply chain in all areas of materials, processes, technologies, systems, augmented reality, robotics, and digitisation; thus fostering a healthy construction ecosystem and regional economy.
Mobilising transformative change through intermediaries
Intermediaries can play a crucial role in triggering analysis and solutions. For decades, we have been trying to mobilise and improve the industry through academic-industry collaborations, and yet we still face the same barriers and challenges. Multinationals have reach, resources, practical knowledge and expertise, and opportunities for prototyping. Universities have knowledge, curiosity and experimental environments. Both arenas have bureaucratic and internal political challenges that bring fragmentation and silos that hinder change.
Intermediaries are needed to bridge this gap. Intermediaries are the ‘conduits’ who identify opportunities and work across disciplines and professions to connect and draw out extant knowledge and act to transform this knowledge into solutions, including adopting existing or creating new successful products, services, or processes. They also provide independence and objective critique to support highly innovative clusters of agenda-driven academics and practitioners. The future of construction does not lie in the technology – we can locate the technology – it is mobilising the technology and then looking to what’s next. The time is right to bring frontier leaders together to be curious about what global construction futures look like, and it hinges on integration of supply chains. Global Scientia is one such intermediary.
References
London, K. Construction Supply Chain Economics (2007) Spon Research Series, Routledge Taylor & Francis Group, London. ISBN: 9780203962480, DOI: http://dx.doi.org/10.4324/9780203962480. p480
London, K. Collaborative Practice Model for Adoption of Innovation, Various Resources: https://www.torrens.edu.au/research/featured-research/collaborative-ways-to-address-housing-crisis
OECD (2025), OECD Supply Chain Resilience Review: Navigating Risks, OECD Publishing, Paris, https://doi.org/10.1787/94e3a8ea-en.
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