A panel of industry experts were on hand at the Association of Consulting Engineering Companies 2014 Leadership Summit in Winnipeg, Man for the "How Innovation is driving the Marketplace" session on June 19.
A panel of industry experts were on hand at the Association of Consulting Engineering Companies 2014 Leadership Summit in Winnipeg, Man. for the "How Innovation is driving the Marketplace" session on June 19.
The panelists were Reed Construction Data vice president and general manager Mark Casaletto, Carl Weatherell, the executive director and CEO of the Canada Mining Innovation Council, and Hilary Esmonde-White, the director of BBM, Sustainable Technologies, Infrastructure and Life Sciences, Foreign Affairs, Trade and Development Canada.
Casaletto began with a high level view of the short-term and long-term construction forecast.
“We are going through one of the most exciting periods in Canada’s construction history,” Casaletto said.
Historically Canada has been the ninth to eleventh place nation for construction activity, but as of 2005 Canada is the fifth most active country. At the time it was the resource sector driving the change, along with European decline.
Recently released data shows Canada has moved up to fourth place, Casaletto said, because of not only resources but also building and renewal of infrastructure.
Construction will outpace GDP over the next decade, he said, because Canada’s GDP is driven by resource exports, and construction is vital to those sectors.
Steady consistent growth in non-residential construction on the order of three to four per cent is likely for the next ten years.
Reed is tracking over 40 projects worth over $1 billion plus, and that is “historic,” Casaletto said.
Infrastructure for these projects is another driver, he said, making for reciprocal growth.
Canada is suffering from an infrastructure deficit, and there’s need not only to repair and upgrade current infrastructure but also create new infrastructure for mega-projects.
Reed is tracking not only resource projects but transportation, subways and water treatment facilities.
Infrastructure deficiencies make for a lack of competitiveness, and we are “not the envy of the world when it comes to infrastructure,” Casaletto said.
Canada also has an aging population, which means supplying labour for this new infrastructure demand becomes even more difficult.
Labour costs are rising, particularly in northern Alberta.
“Pay attention to unpredictable prices and labour shortages,” Casaletto said, as possible roadblocks to Canada’s continued construction expansion.
Weatherall said the word “innovation” has been so overused that it no longer has value. We equate innovation to research and development and that is not in any way innovative, he said.
Weatherall said “open innovation” is a new model that adapts the model in one sector and applies what works to other sectors.
Technology will come from other places like manufacturing, sensors and other areas, and all of it can be applied to mining, he said.
Open innovation is “faster, cheaper, and has less risk and more value,” he said. It is up to ten times cheaper and faster.
Business ecosystems are another approach companies can use, Weatherall said. Business ecosystems harness innovation across a large number of diverse organizations worldwide to co-create value.
Different business models come from different sectors. If there’s a problem with P3s as-is, talk to venture capitalists and game developers about their models.
“Talk to people you normally wouldn’t talk to,” he said.
Esmonde-White said the Department of Foreign Affairs, Trade and Development supports and promotes Canadian commercial interests abroad.
The current focus for the department is on a number of priority sectors, including infrastructure, and they are supported by a private-sector advisory board and a global practice lead.
One of the new initiatives the department is working on is a task force focused on private and public players in the United States who are looking to initiate P3 projects. The department then integrates Canadian players into those projects where possible.
The Canadian infrastructure market pales in comparison to what is available in the rest of the world and that will only become more prevalent in future. Canada’s domestic market is one-third of one percent of international infrastructure projects.
Brazil, Peru, the Gulf states, Eastern Europe and sub-saharan Africa are all growth areas for infrastructure.
But there are challenges, she said. Developing business in Fort McMurray is “a world away from business in India,” Esmonde-White said.
Other nations can have difficult regulatory environments, and strong local players. But those foreign firms can also partner with Canadian firms on Canadian projects.
Less money in government coffers sometimes means greater difficulty in getting paid in foreign environments, Esmonde-White said.
For Canadians, it is difficult to compete on price, so it is necessary to demonstrate that we can be innovative.
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