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The Global Construction Industry and R&D: June 2014

This document discusses research on the global construction industry and R&D. It provides definitions of construction from the United Nations and notes there is no globally agreed upon statistical classification. Construction is traditionally seen as low-tech but certain subsectors are more innovative. Productivity and sustainability are key issues across many countries. Common research themes include reducing resource use and emissions through green technology. Information technology is also widely researched to improve productivity and reduce inefficiencies in areas like building information modeling and facilities management. However, many countries report insufficient funding directed specifically toward construction industry research.

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0% found this document useful (0 votes)
177 views17 pages

The Global Construction Industry and R&D: June 2014

This document discusses research on the global construction industry and R&D. It provides definitions of construction from the United Nations and notes there is no globally agreed upon statistical classification. Construction is traditionally seen as low-tech but certain subsectors are more innovative. Productivity and sustainability are key issues across many countries. Common research themes include reducing resource use and emissions through green technology. Information technology is also widely researched to improve productivity and reduce inefficiencies in areas like building information modeling and facilities management. However, many countries report insufficient funding directed specifically toward construction industry research.

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The Global Construction Industry and
R&D
Keith D. Hampson1, Judy A. Kraatz2 and Adriana X. Sanchez1
1
Sustainable Built Environment National Research Centre
2
Queensland University of Technology

Introduction
The built environment provides the setting for modern human activity, ranging from buildings to
neighbourhoods to cities, and includes supporting infrastructure such as transport, water supply,
telecommunications and energy networks. It is typically the greatest asset of a nation. It is where a
nation’s population lives and, in industrial societies, where up to 95 per cent of the population works
and approximately 80 per cent of national gross domestic product (GDP) is generated. The built
environment also encompasses the spaces, namely homes, offices, shopping centres, health facilities
and entertainment venues, where the population spends on average 97 per cent of its time.
Increasing urbanisation is now a dominant global trend. The planning, construction and
management of sustainable urban settlement is possibly the greatest global challenge of the twenty-
first century, especially when coupled with adaptation to the impacts of climate change and
resource constraints. Constructing our built environment is truly a cornerstone activity of our society
(Newton, et al., 2009).

Defining Construction
The United Nations categorises construction activities for buildings and civil engineering works into
general and specialised, where:
General construction is the construction of entire dwellings, office buildings, stores and other
public and utility buildings, farm buildings etc., or the construction of civil engineering works
such as motorways, streets, bridges, tunnels, railways, airfields, harbours and other water
projects, irrigation systems, sewerage systems, industrial facilities, pipelines and electric lines,
sports facilities etc.
Specialised construction is the construction of parts of buildings and civil engineering works
without responsibility for the entire project. These activities are usually specialised in one
aspect common to different structures, requiring specialised skills or equipment, such as pile
driving, foundation work, carcass work, concrete work, brick laying, stone setting, scaffolding,
roof covering, etc. Specialised construction activities are mostly carried out under subcontract,
but especially in repair construction it is done directly for the owner of the property. These
activities include new work, repair, additions and alterations, the erection of prefabricated
buildings or structures on the site, repair of buildings and engineering works, and also
construction of a temporary nature.
UNSD (2008)
There is however, no globally accepted statistical classification that defines the construction
industry. Some countries use narrow definitions of the construction industry, while others choose to
Chapter 2 – Page 1
include support elements in their definitions, making it difficult to directly compare cross-country
statistics (Lewis, 2009). For example, to compare France and Australia, the French Statistics Bureau
uses NACE Rev 2, the statistical classification of economic activities in the European Community,
which includes construction of buildings, civil engineering, and special construction activities
(Eurostat, 2008). The Australian Bureau of Statistics (ABS) uses the Australian and New Zealand
Standard Industrial Classification (ANZSIC) which includes building construction, heavy and civil
engineering construction and construction services (Trewin and Pink, 2006). NACE classifies service
to buildings and landscape activities under administrative and support service activities, while
ANZSIC classifies these services under construction.
Regardless of its classification boundaries, the industry is traditionally considered as being low-tech.
Tunzelmann (2006) defines low-tech industries as mature industries, where technologies and market
conditions may change slowly. Miles (2006) adds that many services are arguably labouring under a
heritage derived from past periods where few generic technologies found ready application in their
activities. This low-tech definition is based on the industry’s low R&D intensity and small numbers of
people employed directly in R&D. Notably however certain subsectors within the industry, such as
building product manufacturers and equipment suppliers, break from this generalisation. Beyond
such statistical understanding however, this low-tech nature has an important impact on its
operation, productivity and ability to engage in R&D. The Australian Expert Group on Industry
Studies (Marceau, et al., 1999) identifies activities in the construction arena as a product system, as
opposed to a cluster, complex or sector, due to: (i) its reach into both services and manufacturing;
and (ii) the manner in which innovation in this system impacts across products, processes and
services including: elements of goods-producing industries; goods related service industries;
knowledge-based services; in-person services and government and defence activities. Figure 2.1
shows a map of this product system adapted from Marceau, et al. (1999).

FIGURE 2.1 NEAR HERE

Country-based Differentiation
This book provides a unique consolidation of current conditions and drivers affecting R&D
investment across 14 nations, with representation from countries across the spectrum of global
economic development.
For example, as will be explained in further chapters, productivity is a major issue affecting the
construction industry in Australia, Brazil, Canada, India, Netherlands, New Zealand, Sweden, and
USA. The USA and Canada chapters report decreasing relative productivity levels in their
construction industries. The USA has then identified five key areas to improve efficiency and
productivity including: deployment of interoperable IT applications across the industry; improved
interfacing of people, processes, materials, equipment, and information on projects; greater
adoption of prefabrication; widespread demonstrations
to diffuse knowledge; and targeted
performance benchmarking. In Australia, national key performance indicators (KPIs) have been
identified: safety; productivity and competitiveness; economic security; workplace capability; and
environmental sustainability/eco-efficiency (Furneaux, et al., 2010).

Chapter 2 – Page 2
A common theme for research and innovation across participant countries is to reduce resource
consumption and CO2 emissions by creating a more environmentally sustainable built environment
using eco-friendly technology and construction processes. The German Government challenged
researchers and prefabrication companies to create model homes that generate surplus energy,
which can be transferred to, for example, electric motor vehicles. Norway has a similar programme
where the environmental protection organisation, ZERO, challenged the construction industry to
design and build energy producing buildings. Finland, Germany and Norway report active research
beyond individual buildings towards the development of more sustainable communities.
Information and communication technology (ICT) has been adopted to improve productivity and
reduce inefficiencies by Australia, Brazil, Canada, Finland, Hong Kong (China) and USA. In Australia,
public sector construction projects have provided an opportunity to develop building information
modelling (BIM) and integrated project delivery (IPD) and associated national guidelines to better
integrate the supply chain. In the USA, widespread deployment and use of interoperable IT within
the facilities management sector has been identified as having the potential to cut costs by reducing
supply chain inefficiencies. In Canada, research into the field of fuzzy hybrid modelling is improving
construction project performance to enhance industry competitiveness.
Despite a developing industry culture for research and innovation, many countries (including
Australia, Canada, Finland, France, New Zealand, Netherlands, and USA) report insufficient research
funding directed to the construction industry. In Australia however, there has been a significant
recorded increase in private funding while the public sector’s contribution has been declining. This
underinvestment is counter to the position of the construction industry as a major contributor to
national employment and economic growth, and as being central to a rising standard of living and
improved community sustainability (Hampson, et al., 2013).
The Organisation for Economic Cooperation and Development (OECD) STAN Database for Structural
Development provides a valuable source of cross-country analysis of R&D funding. Figure 2.2
presents data relating to R&D investment in the construction industry by country as a proportion of
the 16 OECD nations combined: Australia, Belgium, Canada, Denmark, Finland, France, Germany,
Italy, Japan, Netherlands, Norway, Spain, Sweden, Turkey, UK and the US.

FIGURE 2.2 NEAR HERE

Table 2.1 presents seven key indicators that are referred to throughout this book to build a better
understanding of the construction industry and the impacts of R&D in the diverse nations
participating in this publication.

TABLE 2.1 NEAR HERE

Chapter 2 – Page 3
Characteristics of the Construction Industry

Characteristics and Challenges


Construction projects are complex undertakings. Several reasons exist for this complexity including
the need to coordinate numerous participants often comprising small and medium-sized enterprises
(SME), being a largely site-based industry and the level of specialist knowledge required. Yet as also
highlighted by Dubois and Gadde (2002), the industry has failed to fully integrate technologies and
processes from other sectors that can contribute to an improvement in performance and
productivity such as: just-in-time delivery; partnering with suppliers; supply chain management; off-
site manufacturing; and most recently advances in digital information and communication
technologies.
Despite its size and importance to the economy, the construction industry has not kept pace with
other large industries in productivity improvement. Haskell’s (2004) study suggests that this has
been less than half that of other industries from 1966-2003 (Jonassen, 2010).
Characteristics of the industry that reflect the need for a change, as defined by Jonassen (2010),
include:
 Segmentation into silos of interests
 Little alignment of objectives among the silos with each optimised for its own interests
 Poor and discontinuous information flow between parties
 Significant duplication of effort, inefficiency, and waste with estimates varying between 30
and 60 per cent
 Current business models and contracts reinforcing barriers to collaboration and integration.
Miozzo and Dewick (2004) regard the industry as an archetypal network system where a coalition of
firms and institutions come together on a temporary basis to undertake a project, thus often
creating performance problems due to inadequate inter-organisational cooperation.
Additional challenges include intense competition; limited investment in R&D, partially due to the
project-based nature of the industry; limited advantage taken of the potentials of digital modelling
and electronic transactions; and increased community expectations regarding environmental and
social performance (Newton, et al., 2009).
Such challenges demand both technical and process innovation within the firm and across the supply
chain. Transformational change is required in some areas in order to meet the productivity
improvements demanded by clients and owners in countries contributing to this publication:
whether it is in the way the USA is addressing challenges of climate change and infrastructure
security, or India is addressing the need to provide housing and transport infrastructure for a
growing population.
Another key challenge around the globe is the predominance of micro, small and medium-sized
firms in the construction industry. Micro and small-sized firms especially have difficulties committing
time and resources to the uptake of new technologies and associated practices limiting the benefits
of R&D (Chapter 8). Another consequence of firm size, and in Brazil limited entry barriers, is low skill
levels, prevalent in countries including Brazil, India and New Zealand.

Contribution to Economy and Productivity

Chapter 2 – Page 4
The construction industry makes a significant contribution to GDP, capital formation and
employment (Hillebrandt, 2000). In addition to the development of new built environment assets,
the industry maintains and repairs these assets and produces the building materials that are used to
construct them. The industry’s significance is not only due to the fact that it provides the buildings
and infrastructure on which virtually every other sector depends, but to the fact that it is such a
sizeable sector in its own right (OECD, 2008).
Globally, the construction industry is responsible for between 3 to 10 per cent of GDP if only the raw
site-based construction activity is considered, but importantly between 10 to 30 per cent of a
country’s GDP if the broader construction supply network definition is used. Typically, employment
is also represented by a similar proportion (DIISR, 1999; Klakegg, et al., 2013). Hillebrandt (2000)
explains that the gross output of the construction industry is the value of all the buildings and works
produced by the industry. The net output of construction is
the same as value added, that is, it is the value of the contribution of the construction
industry itself to the production of buildings and works and excludes the inputs of other
industries, such as materials and equipment… whatever the measure is used, an industry
which produces such a large component of GDP is of great significance for any economy.
Hillebrandt (2000)
The ABS reinforces the critical nature of construction with their estimates showing that from an
initial AUD1 million of extra output in construction, a possible AUD2.9 million in additional output
would be generated in the economy as a whole. This additional output would create nine jobs in the
construction industry and 37 jobs in the economy as a whole (ACIF, 2002). A similar leveraging
relationship has also been determined in New Zealand, where every dollar spent on construction
translates into three dollars of economic activity across the economy (Kane, 2012). An improvement
in the performance of this industry can therefore have a significant impact on national GDP and a
country’s economic health. By way of example, the Built Environment Industry Innovation Council
(BEIIC) in Australia calculated that the
accelerated widespread adoption of BIM could boost Australia’s economic output (GDP) by
0.2 basis points in 2011. As the difference in adoption of BIM increases over time, impacts on
productivity also become larger. This flows on to higher GDP over time. In 2025 GDP is
estimated to be 5 basis points higher, when compared with a ‘Business as Usual’ (BAU)
scenario.
Allen Consulting (2010)
Economic modelling shows that this economic stimulation through construction process
improvement is at least double that of any other industry sector.
Accordingly, this comparative global evaluation of R&D investment and impact in construction is of
critical importance in enhancing our understanding of how public and private sector policy and
practice can better leverage R&D investments. Given the importance of the link between
construction activity and GDP growth government policy-making, the industry is being used as a
driver of growth, and as a catalyst for other industries to develop (Ruddock and Ruddock, 2009).
The extensive network of players in this industry’s supply chain spans across primary, secondary and
tertiary sectors. The weight of each part of the chain will vary across countries, according to their

Chapter 2 – Page 5
level of economic development, with a higher concentration of primary and secondary sector firms
in developing countries and more tertiary firms in developed countries (Ruddock and Ruddock,
2009). These differences in part contribute to the distinctions which will become apparent in the
following chapters of this book.
Issues related to poor productivity growth are a focus of attention in a number of the following
chapters. Challenges highlighted include: deeply embedded local laws, regulations and institutions
(Chapter 12); lag in developing labour saving ideas and in finding ways to substitute equipment for
labour (Chapter 16); and research to improve construction labour productivity and efficiency through
the development of strategic solutions and real-time decision support systems that reduce project
execution risks for owners and contractors (Chapter 5). It remains difficult to draw precise
comparisons of productivity across countries, given the variations in locale, weather, labour skills,
regulations, building complexity, degree of mechanisation, supply chain structures, and purchasing
power parities for example.

Small and Medium-sized Enterprises (SMEs)


SMEs are a key source of growth, employment and innovation in modern economies due to their
dynamic and flexible nature and the increasing importance of the ICT sector populated by SMEs
(Parker, 2007). Efforts to compile data on the size of the SME sector across countries have been
challenged by problems of comparability and consistency. Different countries adopt different criteria
- such as employment, sales or investment - for defining small and medium enterprises. Hence
different sources of information on SMEs use different criteria in compiling statistics (Ayyagari, et al.,
2005).
Table 2.2 shows employee numbers as a crucial initial criterion for determining in which category a
firm falls across the countries represented in this book.

TABLE 2.2 NEAR HERE

Additionally, many countries have set limits for maximum annual turnover (Denmark, Finland,
France, Germany, Netherlands and Sweden), maximum annual balance sheet (Denmark, Finland,
France and Sweden), revenue from exporting services (USA) and annual revenue (Canada). India
classifies SMEs in the service sector only in terms of their investment on equipment, without
considering the number of employees: micro-enterprises up to INR1 million (USD18,737); [ii] small-
enterprises up to INR20 million (USD374,742); and medium-enterprises up to INR50 million
(USD936,855) (Government of India, 2006). Other criteria used include: distinction between
manufacturing and service firms (Hong Kong (China) and India) (So, 2012; Government of India,
2006); and exporters versus non-exporters (USA) (USITC, 2010).
More broadly, SMEs form a large proportion of each country’s construction firms. For example, in
New Zealand 90 per cent of all companies employ five or fewer employees (Kane, 2012); in Norway
99 per cent of all firms are classified as SMEs (Norwegian Ministry of Trade and Industry, 2013); in
Hong Kong 98 per cent of all firms were SMEs and most had less than ten employees (So, 2012); and
in Brazil 92 per cent of all firms were considered micro-firms (IBGE, 2006). This representation is
similarly reflected in the construction industry in most countries. In Germany, 92 per cent of all

Chapter 2 – Page 6
construction workers are employed by SMEs (Kless, 2008), and in Australia, construction businesses
with less than five employees accounted for 94 per cent of all businesses and over two-thirds of all
employees in this industry (de Valence, 2010).

Research and Development


R&D is viewed as a crucial investment for the long-term growth of economies. Increased productivity
in OECD countries has been a major determinant in economic growth. This productivity increase has
been linked strongly to increases in public and private R&D. R&D intensity of countries and their
growth in performance is correlated also with the share of research financed by the business sector.
In addition, R&D activities contribute to national competitiveness and generate valuable public
goods (OECD, 2010).
According to Statistics Canada (2011a) there are two fundamental issues in measuring R&D. The first
being defining the content and scope of R&D; and the second determining the point at which R&D
becomes an asset to the economy. Therefore, there have been competing visions of how R&D and
its sub-components should be defined in the national accounts. The most common starting points
for these discussions come from SNA93[iii] and the OECD Frascati Manual.
Most countries represented in this book use the OECD Frascati Manual definition:
Research and experimental development (R&D) comprises creative work undertaken on a
systematic basis in order to increase the stock of knowledge, including knowledge of man,
culture and society, and the use of this stock of knowledge to devise new applications. The
term R&D covers three activities: Basic research is experimental or theoretical work
undertaken primarily to acquire new knowledge of the underlying foundation of phenomena
and observable facts, without any particular application or use in view. Applied research is
also original investigation undertaken in order to acquire new knowledge. It is, however,
directed primarily towards a specific practical aim or objective. Experimental development is
systematic work, drawing on existing knowledge gained from research and/or practical
experience, which is directed to producing new materials, products or devices, to installing
new processes, systems and services, or to improving substantially those already produced
or installed. R&D covers both formal R&D in R&D units and informal or occasional R&D in
other units.
OECD (2002)
Some countries however have made some refinements to this definition. For example, Canada uses
the SNA and CSNA[iv] concepts which include a fourth activity innovation, which includes the costs
associated with marketing new products. It also states that when R&D is purchased either
domestically or from an international source, it is considered as a purchase of fixed capital formation
and not as an input (intermediate expense) for production (Statistics Canada, 2011b). In Norway,
R&D includes the acquisition, combination and use of existing knowledge and skills to prepare plans,
projects or proposed new, altered or improved products, services or production processes (The
Research Council of Norway, 2002).
Australia defines R&D core activities as solely experimental for tax purposes as follows:
 Whose outcome cannot be known or determined in advance on the basis of current
knowledge, information or experience, but can only be determined by applying a systematic

Chapter 2 – Page 7
progression of work that (i) is based on principles of established science; and (ii) proceeds
from hypothesis to experiment, observation and evaluation, and leads to logical conclusions
 That are conducted for the purpose of generating new knowledge (including new knowledge
in the form of new or improved materials, products, devices, processes or services).
Austlii (2011)
The OECD uses the Oslo Manual (2005) as the basis to define innovation as the implementation of a
new or significantly improved product (good or service), or process, a new marketing method, or a
new organizational method in business practices, workplace organization or external relations
(Canadian Science, Technology and Innovation Council, 2011).

R&D and Innovation in Construction


The innovation performance of the construction industry has been the focus of significant attention
by industry practitioners, government analysts and policy makers, and researchers across the globe.
The answer to the industry’s continuing problems is said to lie in building a stronger innovation
culture to improve the rate and quality of innovation across the construction system, particularly
given increasing client demands for integrated services (Manley, et al., 2008). Nevertheless,
construction continues to underperform significantly compared to other industries in terms of
innovation activity. In addition to those broader industry challenges already highlighted, a history of
limited investment in R&D and new technologies needs to be addressed to raise the overall capacity
for R&D and its adoption in this industry.

R&D Investment in Construction


Inadequate R&D investment has been cited across the world as one of the weaknesses of the
construction industry (Forbes and Ahmed, 2011). In part this may be attributed to the applied nature
of R&D undertaken in the construction industry which has traditionally not been captured by
country-based statistics. This applied research basis, where the industry takes advantage of
knowledge spill-overs from other industries, enables benefit to be gained from research undertaken
by those more able to sustain a larger R&D investment. For example, some of the digital modelling
advances made in the construction industry in the past decade flow on from those made in the
aeronautics and manufacturing industries in the latter part of the last century. Additionally, most of
the improvement in construction productivity in the USA has been the result of R&D work in the
manufacturing industry related to construction machinery: Earthmoving equipment has become
larger and faster, and power saws have replaced handsaws (Forbes and Ahmed, 2011).
Public sector funding for R&D is provided through a variety of mechanisms including centrally-
funded research institutions, contestable funding schemes, and tax incentives such as concessions
and credits. These are addressed in the following chapters.
In Germany, a long history exists in publicly-funded research institutions. The main policy instrument
for construction R&D is direct government subsidies, with major funding coming through the Federal
Ministry of Transport, Building and Urban Development (BMVBS) (Chapter 9). Additional funding is
also provided through individual States and the European Union. In the USA nearly two-thirds of
research expenditures was funded by Federal agencies, while industry contributed 16 per cent,
academia 12 per cent, and other organisations 9 per cent (Chapter 16).

Chapter 2 – Page 8
Contested funding schemes enable applicants to seek funding for specific, often short-term projects
through contested rounds. In New Zealand such funding is available through TechNZ and New
Zealand Science Challenge (MBIE, 2013a; 2013b). In Australia, the Australian Research Council (ARC)
offers a range of schemes contested on an annual or bi-annual basis (ARC, 2011). In Canada, the
government provides funding through the Industrial Research Assistance Program (IRAP) and the
Construction Portfolio (NRCC, 2013), and in Hong Kong, the Theme-based Research Scheme focusses
on academic research efforts on themes of strategic importance to the long-term development of
Hong Kong (UGC, 2013).
Governments in different countries offer various mechanisms to encourage private firms to leverage
their R&D investments, ranging from direct grants to R&D tax concessions and incentives.
Temporary financial incentives are also used as a mechanism to encourage continued investment
during difficult economic times. The OECD (2010) reported that more than 20 OECD governments
provide fiscal incentives to sustain business R&D, up from 12 in 1995 and 18 in 2004. The 2010 OECD
report R&D Tax Incentives: Rationale, Design, Evaluation provides a useful outline of different
public mechanisms used in those countries. This report and the following chapters of this book
provide further detail:
 Australia: Collaborative grants for public/private sector collaborations; R&D tax incentives;
and encouragement for SME investment (OECD, 2010)
 Brazil: Sector-based funds to improve the technological capacity of companies; new
innovation laws enabling subsidies to R&D companies and more favourable tax regime with
incentives for R&D (Chapter 4)
 Canada: Indirect support mechanisms encouraging SME investment via higher tax
exemptions though the private sector contributes only a small portion of formal R&D (OECD,
2010)
 China: Generous tax reductions for R&D firms located in certain new technology zones or
investing in key areas such as biotech, ICT and other high-tech fields (OECD, 2010)
 Sweden: The Development Fund of the Swedish Construction Industry (SBUF) provides the
largest source of private sector grants with financing from around 5,000 contractors
contributing to the funding of many university-based research projects complementing
targeted government innovation funding (Chapter 15).
An important consequence of investment in construction R&D is to build the absorptive capacity of
both individual firms and the industry more broadly (Kraatz and Hampson, 2013) through improving
the capabilities of organisations to innovate and develop associated systems. A more holistic
approach to R&D investment, supported by government policy, can thus provide broad benefits to
the industry and consumers. For example, the Canadian Federal Government helps companies bring
innovative products to market, a process which has impacts across the supply chain, from
manufacturers and suppliers through to the end consumers (Chapter 5); and in Sweden,
construction firms are actively encouraged to trial new technologies and processes through
demonstration projects supported by industry and government funded initiatives (Chapter 15).

Collaboration, Diffusion and Impact


A recurring theme through the following country chapters is the importance of collaboration. This
focus is evident between industry, government and researchers in order to strengthen the
effectiveness and impact of R&D. This is evident in the broader industry also with a move from

Chapter 2 – Page 9
traditional adversarial approaches in procurement to a more relationship-based approach through
project alliancing and partnering.
This tri-partite (or triple-helix) approach to collaboration is considered a key to successful R&D and
innovation enabling more effective diffusion of research outcomes. The USA identifies public-private
partnerships fostered by federal funds as a key in creating roadmaps for more cost-effective
construction and a more productive workforce. Canada identifies more practical and tangible
benefits when such an approach is taken. Norway highlights the benefit of researchers and industry
mutually challenging and inspiring each other to improve and innovate. The Swedish Government
has recently brought together public sector and industry leaders to identify innovative projects for
R&D funding. Finland describes the need for collaboration between businesses across the value
chain and benefits to smaller companies working together and sharing data. Brazil and India cite
collaboration between government
and industry to develop more efficient and lower cost
technologies to help solve acute housing shortages. Denmark highlights the need for a systematic
effort towards improved knowledge dissemination between researchers, the local industry, and
international knowledge centres.
Measuring the impact which derives from R&D presents many practical policy challenges. Research
Councils UK (2012) describe academic impact as the demonstrable contribution that excellent
research makes to academic advances, across and within disciplines, including significant advances in
understanding, methods, theory and application; and economic and societal impacts as:
The demonstrable contribution that excellent research makes to society and the economy.
Economic and societal impacts embrace all the extremely diverse ways in which research-
related knowledge and skills benefit individuals, organisations and nations by:
• Fostering global economic performance, and specifically the economic competitiveness of
the United Kingdom,
• Increasing the effectiveness of public services and policy,
• Enhancing quality of life, health and creative output.
Research Councils UK (2012)
A diverse set of measures are thus required. Garnett, Roos and Pike (2008) report on a case study
carried out at Charles Darwin University with the intent of providing a reliable, repeatable and
comprehensive, transparent and agreeable assessment of a university’s research value as seen by the
stakeholders who sponsor research. The following chapters address these issues in their national
context.
Following on from more detailed accounts of these issues in the country chapters, Chapter 17 (What
Next: Future Directions for R&D Investment) then provides a further analysis to improve our
understanding of R&D in construction, in order to better match funding strategies to industry needs
for a stronger, more productive and more highly valued industry.

Endnotes
[i]
GDP contribution by industry was not available for Denmark; therefore Gross Value Added was
used instead.
[ii]
Average exchange rate 2012 from Federal Reserve System (2013) Foreign Exchange Rates - G.5A,
Available HTTP: <http://www.federalreserve.gov/releases/g5a/current/ (accessed 14 January 2013)

Chapter 2 – Page 10
[iii]
System of National Accounts 1993 (SNA93). Available HTTP:
<http://unstats.un.org/unsd/nationalaccount/sna1993.asp>.
[iv]
SNA Rev1 refers to the proposed treatment in the new international SNA guideline. CSNA refers to
the treatment in the Research and Development Satellite Account

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