Table 43: Percentage of enterprises that do product/process innovation by broad sector Product innovation Process innovation Scotland UK Scotland UK Manufacturing 30.90% 31.60% 19.70% 21.60% Mining and Quarrying 24.90% 13.10% 16.60% 11.60% Hotels and Restaurants 23.40% 13.80% 11.90% 6.50% Other Services 21.90% 21.50% 14.70% 14.90% Electricity, Gas and Water Supply 18.90% 14.50% 45.20% 19.60% Wholesale Trade and Retail 13.70% 16.00% 8.80% 10.80% Transportation and Storage 13.60% 12.40% 5.00% 9.40% Construction 9% 13.20% 7.90% 8.70% Total 19.80% 19.20% 12.50% 12.80% Source: Scottish Government – UK Innovation Survey 2015 Scottish Results Knowledge Transfer Partnerships In order to identify some examples of innovation activity amongst Scottish businesses and universities we conducted an online search of the current and completed Knowledge Transfer Partnerships, a UK wide programme delivered by Innovate UK. The list below (Table 44) contains all the projects involving Scottish based construction firms. Table 44: Current and completed KTPs involving Scottish construction firms since 2008 Company Name Sub Sector Project Partner Project timescale B H C Limited General construction of buildings and civil engineering works To apply latest design process techniques to steel-frame building design and construction to design and implement integrated software solutions. University of Strathclyde Booth Welsh Automation Limited Installation of electrical wiring and fittings To establish and develop wireless control system technology as supplementary to core technology to anticipate future customer requirements. Glasgow Caledonian University Barr Limited General construction of buildings and civil engineering works To embed planning systems and expertise which deliver improved capabilities and control in order fulfilment and management decision making. University of Strathclyde Action Scaffolding Contracts Limited Other building completion To embed engineering expertise to support the specification of safe scaffolding structures for complex applications through the development of CAD software. Edinburgh Napier University Tayside Contracts Construction of motorways, roads, railways, airfields and sports facilities To implement and embed lean tools, methodologies and practices to realise the potential to add value to construction operations by reducing costs and increasing performance. University of Dundee
Architectural Glazing Systems Limited Other building installation To implement an electronic order tracking and fulfilment system which complements existing business processes. University of Strathclyde Mechanex (UK) Limited Other building installation To develop a procurement system that meets client needs in the private and public sector. City of Glasgow College Kerr & Smith (Cumnock) Limited Insulation work activities To develop and implement a modern business structure and infrastructure using up to date Organisation Development/HR theory and best practice. University of the West of Scotland Powerwall Space Frame Systems Limited Other building installation To develop a novel system of embedding intelligence in modular components assembled to create 'intelligent buildings' optimising performance and occupant comfort in a sustainable manner. To develop novel detailing design to gain structural robustness in modular buildings. The University of Edinburgh Barr Limited General construction of buildings and civil engineering works To identify energy usage and develop monitoring system for optimum use, implementing an energy and carbon reduction strategy in line with the sustainability agenda. University of Strathclyde Campbell & Kennedy Limited Other construction work involving special trades To utilise progressive management techniques to automate business processes to support a strategy to enter markets while increasing operating efficiencies. University of Strathclyde Capital Steel Limited Erection of roof covering and frames To implement an automated stressed skin design process for a cold-formed steel portal frame resulting in lighter frames and/or larger spans for global markets. Queen's University Belfast Richard Irvin Sustainable Energy Limited Other building installation To determine the technical issues in making an e-house 95% energy self-sufficient using demand reduction, onsite generation, and energy storage in an integrated system. The Robert Gordon University Capital Steel Limited Erection of roof covering and frames To embed finite element analysis (FEA) capability, integrating this with existing ProjeX design tools and delivering a full Design by Analysis capability. University of Strathclyde QTS Group Limited Construction of civil engineering constructions To develop a cost-efficient and effective design method for rock catch fences through field testing and advanced numerical simulations. University of Glasgow Source: Innovate UK KTP Online website
Construction employment levels According to OECD data, the construction sector accounts for 6.8% of the UK workforce (Figure 73). This is marginally higher than the average for the EU28 and other major countries such as the United States (6.6%), France (6.5%), Italy (6.3%) and Germany (5.6%). Figure 73: Construction employment levels in OECD countries Source: SQW analysis of OECD data International benchmarking In a recent report, McKinsey estimated the current value of the global construction industry to be around US$10 trillion, which accounts for around 13% of global GDP. McKinsey expect that the sector will grow to US$14 trillion by 2025. The McKinsey research highlights a long-standing issue of poor productivity growth in the construction industry. It states that construction sector labour-productivity growth averaged on per cent a year over the past two decades, compared with 2.8 per cent for the total world economy and 3.6 per cent for manufacturing. It is argued that if construction labour productivity could catch up with the progress made by other sectors over the past 20 years or with the total economy, this could increase the construction industry’s value added by $1.6 trillion a year. The bubble diagram below (Figure 74) summarises the performance of different construction markets, with the size of bubble indicating the total output of the sector (showing China and the US to be the largest markets). On the two axes, it also shows productivity growth in each country (again showing China experiencing high annual growth) and actual output per hour worked. The UK appears to be performing relatively well in terms of growth, output per worker and size of total output. It appears in the top quadrant of ‘outperformers’ along with Belgium, Netherlands, Canada, Germany and Australia.