Last Thursday night Helix celebrated innovation in the construction industry at our ‘Construction Disruptors of 2023’ event.
There is no doubt that some amazing industry innovations are happening and the people responsible for these should be celebrated.
However, I believe the industry needs to and is capable of innovating much more.
In this thought-provoking piece, I explore the fictional scenario of a global construction giant, AIXI, dominating the Australian and Asian markets with an after-tax profit of $1 trillion.
This is the third time I’ve published this article, (initially in August 2018) with an aim to spark conversations about the future of the construction industry.
Key points of the fictional scenario
The Rise of AIXI
AIXI’s success is attributed to its strategic entry into the Australian market, capitalising on the inefficiencies of local construction companies. The company’s founders, hailing from diverse industries, saw the untapped potential in Australia and Asia, particularly considering Brexit.
The Australian construction industry has been plagued by inefficiencies, including high on-site construction costs and low workforce utilisation. These inefficiencies make the industry ripe for disruption, as demonstrated by AIXI’s fictional success. These inefficiencies are outlined below:
On reading this fictitious article of mine titled ‘Global Construction giant AIXI posts after tax profit of $1 trillion for 2038 FY‘, 5 years after I initially published it, it is worth reviewing the basis for establishing AIXI:
- AIXI started from a small factory in Cairns in 2018 and in 20 years has grown exponentially.
- AIXI now operates from a massive technology and manufacturing hub between Port Douglas and Cairns.
- They’ve employed 300,000 well-trained staff working round the clock.
- Their primary focus is cutting-edge off-site prefab manufacturing and 3D printing for residential living options.
- AIXI also committed to reinvesting 10% of their after-tax earnings into R&D.
- Their strategic choice of location near the Port of Cairns and a wind farm for reliable and affordable electricity, combined with anticipation of the 5G mobile network’s rollout, has played a crucial role in their success.
- Notably, AIXI’s strong commitment to R&D, including the establishment of AIXI University for industry R&D and workforce development, has been a key driver of their remarkable growth and profitability.
This investment in the front end of their business has created a thriving business ecosystem with substantial benefits in the back end.
With the benefit of hindsight
In this fictional scenario, with the benefit of hindsight and greater knowledge, the only thing I would change is the location of AIXI inland from Townsville.
The Queensland Government with its Power North Queensland Plan is investing $386 million to improve and diversify North Queensland’s energy supply.
Furthermore, the Port of Townsville is Northern Australia’s largest container and automotive port.
I have been deliberately provocative in this article.
Out of the four industry inefficiencies that created the opportunity for AIXI to successfully disrupt the construction industry (remember all of this is a work of fiction), maybe we will now start to see more Government funding and R&D support for the industry.
In great news, the Australian Government has provided a $28 million grant to Building 4.0 CRC. This grant is an industry-led research initiative co-funded by the Australian Government.
The grant will leverage a combined $103 million from industry, government, and research partners, bringing the combined research budget to $131 million over seven years. The partners include Monash University, Lendlease, the University of Melbourne, Donovan Group, BlueScope, Sumitomo Forestry, and CSR, along with 23 other partners.
The partners have committed over $100 million in cash and in-kind contributions to the initiative.
The Building 4.0 CRC aims to transform the construction industry by developing an internationally competitive, dynamic, and thriving Australian advanced manufacturing sector. The aim is to deliver better buildings at lower cost and increase the human capacity to lead the future industry.
This development is hugely significant in terms of driving innovation in the industry.
Let’s support innovators!
Let’s look at the characteristics of an innovator. Below is a summary of what I found:
- Creativity: Innovators can think outside the box and come up with original solutions to problems or challenges. Creativity is the foundation of innovation.
- Curiosity: Innovators have a hungry mind and a thirst for knowledge. Curiosity fuels innovation by expanding one’s horizons.
- Openness: Innovators are open to new experiences, ideas, and people. Openness fosters innovation by facilitating collaboration and cross-fertilisation.
- Resilience: Innovators are resilient and adaptable. Resilience enables innovation by overcoming obstacles and persevering.
- Opportunism: Innovators are opportunistic and proactive. They can create value by meeting unmet or latent demands.
Helix innovation event
Last Thursday we came together with our valued clients, friends, and industry leaders to celebrate the spirit of innovation that has driven our industry throughout the year.
Not intended as legal advice. Read full disclaimer.