Construction Industry Alliances are the Key to Transformation in Singapore

In a speech delivered to Parliament on March 04 2021, National Development Minister Desmond Lee expanded on the Growth and Transformation Scheme (GTS) aimed at the Built Environment sector. Minister Lee provided an important missing piece of the puzzle for BE watchers who were keen to learn more about how the Singapore Government plans to implement its ambitious GTS to transform the construction industry.

This missing puzzle piece turns out to be the creation of industry alliances between different parts of the industry value chain to coordinate transformation together and work closely with the government.

Here’s how it works: as part of the GTS, different members of the construction industry value chain–contractors, developers, and consultants–would form alliances of “progressive” entities willing and able to transform themselves to meet the challenges of the future. Once an alliance is formed, it will need to produce a minimum three-year business and transformation plan and then work towards those outcomes together.

Outcomes may include the adoption of digital tools and infrastructure such as Building Information Modelling (BIM) across all aspects of a project, the use of Design for Manufacturing and Assembly (DfMA) methods and prefabrications, and the growth of productivity that is technologically-driven rather than labour-intensive. Other outcomes could also include movement towards more sustainable building practices and greater domestic self-sufficiency for the industry, especially after the battering endured by the industry in the wake of the COVID-19 pandemic. Alliances will work together and with other parties to ensure collective effort and collective success in achieving goals linked to the GTS.

Minister Lee mentioned that such a unit of organisation is essential for the GTS to be applied to the industry since the industry in its current form suffers from “heavy inter-dependencies among different stakeholders along the value chain.” He added, “Given these inter-linkages, it is difficult for any one firm in the value chain to transform on its own. And this pandemic has shown that we are only as strong as the weakest link in the chain.”

Such alliances may also be a prelude to greater industrial consolidation in the sector, especially since Singaporean building and construction is a particularly fragmented industry. Firms best-placed to lead alliances or have offerings across more of the value chain than others may be able to synergise and meet GTS targets far more efficiently. While the initial piloting of the GTS will be with “a few” alliances, according to Minister Lee, it will be refined and rolled out for the rest of the industry ultimately. Therefore, it is vital that Built Environment firms find their alliances and invest time and resources into the great transition that is to come within the industry.

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