The built environment is often seen as a challenging sector for innovation due to its complexity, regulations, and the sheer scale of its projects. However, companies are demonstrating how to overcome these barriers by adopting the right mindset, engaging with stakeholders, and experimenting in new ways.
At the International Built Environment Week (IBEW) 2024 held from September 4-6, Luke Wu, Managing Director at The GEAR, took on the role of moderator for an insightful panel discussion on "Overcoming Barriers to Innovation in the Built Environment." The panel featured industry leaders including Dr. Thomas Hyde, Chief Transformation & Innovation Officer at Beca; Aylwin Tan, Chief Customer Solutions Officer at Capitaland Investment; Hajime Onojima, Executive Officer at Obayashi Corporation; and Marie Cheong, Founding Partner at Wavemaker Impact, who shared their expertise and perspectives on driving innovation in the sector.
Below are key insights and lessons from the session:
1. On Biggest Barriers to Innovation
The built environment faces numerous barriers that hinder innovation:
Time and Regulatory Inefficiency: Slow-moving regulations and lengthy project timelines make it difficult for new technologies to be adopted quickly.
Stuck in the “Innovation Trap”: Companies often enter startup challenges or adopt surface-level innovations without creating a sustainable growth path.
Budget and Stakeholder Management: Innovations require funding and alignment among multiple stakeholders, which can be difficult to manage.
Mindset and Culture: The need for a mindset shift at the management level is crucial. There is a prevalent notion that “everyone wants innovation, but no one wants to pay for it.” Without a change in culture and business models, innovation efforts often stall.
2. How to Overcome These Barriers
These barriers can be overcome with the right strategies:
Changing Mindsets and Building Partnerships: Success starts with changing the mindset and fostering a culture that supports innovation. Collaborations with partners like the Building and Construction Authority (BCA) have been pivotal in aligning innovation with commercial outcomes.
Focus on Customer Pain Points: Addressing real customer needs is essential. For instance, solar startup Helios made it easier for homeowners to adopt solar power by connecting their innovation to cheaper loans—solving a pain point people actually care about.
Involvement of Multiple Stakeholders: Innovation requires buy-in from a wide range of stakeholders to ensure new technologies are both safe and commercially viable. In construction, for example, robots are being utilised for faster, more efficient builds with better quality control.
Empowering Experimentation: “Here’s a hammer, what nails can we hit with it?” Providing teams with the tools and space to experiment is key to driving innovation.
3. Experimenting in Low-Risk Environments (Sandboxing)
To reduce risk while fostering innovation, companies are increasingly experimenting in controlled, low-risk environments known as “sandboxes.” Key approaches include:
Starting Small: Begin by assessing if existing tools can solve the problem before moving on to new solutions.
Creating Internal and External Sandboxes: Companies should focus on creating internal sandboxes to allow employees to innovate in day-to-day operations, while also exploring external opportunities that allow testing of broader industry applications (e.g., water savings, energy efficiency).
Finding Quick Wins: It's essential to focus on innovations that offer immediate commercial outcomes. By partnering with stakeholders who can make fast decisions, companies can avoid getting stuck in a "time loop" where projects take too long to yield results.
4. Pushing Innovation Without Budget Constraints
It’s not always about money. Shifting mindsets and developing capabilities are often the most critical factors. If budget is not an issue, companies should prioritise the following:
Domain Knowledge and Data: Having access to the right data and ensuring that teams possess the necessary domain knowledge is crucial to successful innovation.
Alignment: Ensuring that all stakeholders are aligned in terms of objectives and desired outcomes is essential. Without this, even the most well-funded projects may fail to gain traction.
Fast Innovation Cycles are Vital: Slow adoption kills innovation.
5. Innovation as a Competitive Edge
One of the challenges in the built environment is that innovations at one company often become competitive advantages that they hesitate to share. To address this:
Identify Common Solutions: While certain innovations may give individual companies an edge, many solutions are applicable across the industry. Sharing and scaling these common innovations can lead to broader improvements.
Recognising Maturity: Not all innovations are scalable, and end users may have different perspectives. The ability to identify which innovations can be shared and which should remain proprietary is a matter of market maturity and industry coordination.
6. Tips for Startups
For startups entering the built environment, the key to success lies in:
Product-Market Fit: A strong indicator of product-market fit is having more than three client logos.
Solving Real Problems: Focus on solving actual pain points that are felt across the industry.
Leverage Networks and Find the “Crazy” Person with a Purse: Successful innovation often starts with finding someone willing to take a bet on a new idea. Utilise advisors and established networks to gain traction and access to resources.
Commercial Focus: Always be ruthlessly focused on achieving commercial outcomes to ensure long-term success.
In conclusion, overcoming barriers to innovation in the built environment is not just about money—it’s about shifting mindsets, adopting new approaches, and creating opportunities for experimentation. Leaders must be curious, courageous, and willing to take the first steps, no matter how small. For startups, it’s about finding the right backers who believe in your idea, even if they seem a bit “crazy.”
There is immense opportunity in the built environment, and companies like The GEAR are leading the way by experimenting and sharing knowledge across regions. The future of the sector lies in a willingness to innovate, collaborate, and push boundaries.
This article was written by Joey Jiahui Ong, Innovation Manager at Kajima Development.