On October 29, 2009, FMI hosted a one-day workshop in Chicago, attended by more than 60 industry leaders, to present the research results from several months of discussions and interviews with an advisory panel of A/E/C industry leaders concerning the possible future of the A/E/C industry. According to a subsequent report from our findings, “Discussions were framed around the idea that “the dialogue is just beginning … an effective industrywide strategy can only succeed with the input of all stakeholders. FMI anticipates repeated workshops in a similar format to continue into the future.”
Our purposes in this long-range study and workshop were to:
- *Look ahead at the possible futures of the industry beyond the normal one to five-year planning horizon.
- *Learn how leaders of the industry were looking at their futures
- *Introduce clients and prospective clients to the benefits of scenario planning, especially in an uncertain political and economic climate.
Four future scenarios resulting from this collaborative effort represent plausible futures for the U.S. A/E/C industry in 2020, and are shaped by worldwide trends.
- Perfect Worldview is the story of an idealized tomorrow, where firms enjoy the luxury of ethical decision-making, mandated environmental standards and a surge in innovation.
- Struggle for Stability is a tomorrow much like today, where A/E/C firms strive to transcend a financial and competitive limbo, with scarce private investment and limited natural resources.
- Building Walls is an isolationist future in which infrastructure is severely lacking, and a low-bid culture dominates. Geopolitical barriers to trade prevent exchange of ideas and talent, and the battle for survival takes place on spreadsheets and in underhanded dealings.
- Controlled Environment results from the germ of nationalization we see today: pillar industries are appropriated by the government and strict mandates brand everyone a contractor or subcontractor to public projects.
In discussions about the scenarios, most agreed that the “Struggle for Stability” was the most likely to fit the future over the next five years. Three years later, that scenario still seems solid. We fear the “Controlled Environment” scenario as socialism, communism or just too much government control and debt, yet it remains a possibility. On the other hand, how long can we remain in a future of the struggle for stability without falling into an isolationist future of building walls where everyone is acting in their own self-interest in the most fearful and greedy sense of that idea? The “Perfect Worldview” has been noted as being too utopian, and thus will not happen, to which I have responded that it certainly won’t unless we work toward it. Overly optimistic? Naïve? Agreed.
In the latest results of FMI’s “Nonresidential Construction Index” report (NRCI Q3 2012), we cautioned readers to “beware the upturn” after receiving a number of responses from NRCI panelists in response to questions about profit margins and contractor failure rates. We found that the recovery we have all been waiting for could be the downfall of more marginally surviving contractors.” Panelists raised their concerns that too many contractors have been taking on too much low-bid work just to keep their backlogs full, and now it is beginning to show up as businesses become unable to finance ongoing losses. This potential outcome was predictable, and many panelists note they have been surprised it has not happened sooner. (NRCI Q3 2012) Sounds like our “Building Walls” scenario could be just around the corner, doesn’t it?
None of the above discussion solves any problems in the construction industry. After all, the construction industry is just a reflection of the broader economic situation, right? Yes and no. The construction industry is a foundation industry, both figuratively and actually, that serves a key role in the economy, both from providing jobs for workers and in designing, building shaping our environment in myriad ways. Should it speak with one voice? Act on one long-range plan? Or just react to the multiple evolutionary forces in its socio-political and economic surroundings? It is easy to ask some tough questions, and likely impossible to find one right answer.
At the end of the inaugural A/E/C Futures workshop, we said we expected to have similar workshops and discussions in the future. The Recession and survival seems to have sidelined that discussion on a broader scale, although we discuss such things in strategy sessions with clients frequently. Now, I am asking readers for their ideas. What should or could the future of construction, especially infrastructure construction, look like in America? And who can really do anything about it anyway?