GLOBALIZATION OF THE ENGINEERING AND CONSTRUCTION INDUSTRY SESSION 4: “20/20 VISION FOR THE FUTURE OF THE AEC FIELD” 1. Introduction 2. Our vision Significant changes in the past 20 years Likely changes over the next 20 years Implications for the Built Environment Possible actions we might take 3. The decline of the nation state 4. Research needs Definitions of R+D Introducing R+D Innovation Measuring Productivity 5. Life cycle strategies 6. Class Discussions – please read: ENR’s “Greatest Construction Projects Over the Past 125 Years” o Pick your favorite projects o Decide which might be the next 20 years’ greatest projects? ● “Measuring Productivity and Evaluating Innovation in the U.S. Construction Industry” The Rise of Anti-global Forces Outside Reading ○ The Lexus and the Olive Tree by Thomas Friedman – Chapters 1-7, pgs. 3-1372 SESSION 4: “A 20/20 VISION FOR THE FUTURE OF THE AEC FIELD” In 1899, Charles Duell of the U.S. Patent Office claimed: “Everything that can be invented, has been invented…” In 1994, President Clinton said, “Tomorrow’s infrastructure must not be built using today’s technologies…” Now, according to Henry Michel, “When companies downsize, they get rid of R&D. . .” So what can we look forward to? It’s difficult enough to forecast the past, let alone the future. Remember some past highly publicized visions. Hudson Institute claimed Japan’s economy would pass the U.S., and France would have the largest European economy; the recent prophets of the "new economy," MIT and David Halberstrom’s forecast of the demise of Ford and rise of Nissan*; Tom Friedman’s forecast in 1999 in the first edition of “The Lexus and the Olive Tree” of the rise of Compaq and decline of IBM† and Popular Mechanics Magazine, forecast in 1949 that “computers in the future may weigh less than a ton and a half.” Everyone aspires to 20/20 vision, even if it needs a bit of correction to achieve. Let’s see what our 20/20 vision for the Built Environment by the year 2020 might look like. What changes are occurring? How will they impact the Built Environment, our society and your likely careers? 2. Our Vision To identify the possible changes that we might see confronting our field between now and the year 2030, we need to look at the Built Environment from several perspectives: first, the significant changes that have impacted the Built Environment over the past 20 years; second, changes that may impact the Built Environment over the next 20 years; third, the implications of these changes on our future; and fourth, the possible actions we might want to take, * He may be right yet, though Nissan is now controlled by Renault. † Subsequently revised in the second edition we are using.3 or must take, over the coming 20 years to try to influence, shape and benefit from these anticipated changes. But, whatever we do, we must be ready for a major restructuring of the Built Environment – one that is already underway and could prove revolutionary rather than evolutionary. First, some significant changes in the past 20 years, in your lifetime, that influenced the AEC field. Technology 1. The application of computer and chip technology, in particular, CADD (Computer-Aided Drafting and Design), GPS (Global Positioning Systems), and the use of satellites as highly accurate surveying tools. Those tools, for example, transformed the design profession from a labor-intensive to a capital-intensive field and, when combined with the internet, reduced the importance of work place/office location and encouraged outsourcing (offshore design offices), as well as distributed planning, design and even construction supervision (e.g., remote cameras, sensors, etc.). 2. The shrinking of the globe due to improved communications and information technologies. 3. Changes in the packaging, financing, and delivery of projects, as we will discuss in more detail in Sessions 3, 6, and 9 - design/construct, turnkey, BOT, program and construction management, multi-disciplinary teams, new forms of partnering, etc. 4. Improved and more efficient global supply chains. 5. Introduction of new, stronger and often lighter, materials - plastics, composites, fiber optics, etc. 6. Increased utilization of preassembled components 7. Movement from industrial (low value/high volume) to higher value/lower volume products accompanied by an increase in the percentage of soft costs in manufactures and plant construction and changes in transportation patterns (containers, air freight, overnight parcels, etc.) 8. Rising importance of non-engineering disciplines in the built environment (e.g., law, environmental, sociology, finance, risk management, etc.) and a gradual decline in construction costs as a percentage of total project costs.4 9. Failure to keep up with more dynamic sectors such as telecom, electronics, consumer appliances, aviation and the need to adopt CADD, IT, materials, robotics and other maturing technologies,‡ etc., (technological migration and crossover) from these more dynamic sectors to improve productivity. Class, any others? Socio/Political 1. The end of the cold war and rise in local communal and civil conflicts and terrorism 2. The rise in importance of the Pacific Perimeter, decline of the command economies, and emergence of the “Global Economy” and global competitors. Tom Friedman’s claim that we went from friends and enemies during the “Cold War,” to competitors in the “Global” 3. The rise in global financial interconnectivity and systemic risk 4. The growing concern for depletion of the world’s natural resources and the need to encourage sustainable development and the emergence of environmental concerns and constraints encouraging the rise of the “regulatory engineer” as discussed in Session 1 5. The rise of antigrowth sentiments, the consumer movement and the growth of a more litigious and adversarial climate in a number of countries especially the U.S. 6. The rise of public activism