Construction’s big debates: AI, industrialisation and the search for viable delivery

The built environment has no shortage of familiar challenges, but the tone of recent industry conversations at UKREiiF suggests something is shifting. Across discussions about housing delivery, local authority budgets, AI, industrialisation and infrastructure investment, one theme stood out: a growing recognition that the sector must change how it delivers.

That recognition matters because the pressures facing the industry are becoming harder to absorb through business as usual. Productivity remains stubbornly low, budgets are under strain and the gap between ambition and delivery is still too wide.

The most useful debates are now less about whether change is needed and more about what will make it practical: better use of data, more industrialised approaches to delivery, and a broader understanding of value that can help projects move forward.

A sector preparing for AI – but not yet ready

Unsurprisingly, AI was one of the dominant topics of conversation. What struck me, however, was how quickly the debate has shifted. Twelve months ago, many people were still asking whether AI would have a meaningful impact on construction and real estate. This year, the conversation was much more focused on implementation.

The challenge is that our industry is not yet built to take full advantage of it. Construction remains highly fragmented, with data spread across different organisations, systems and supply chains. We talk a lot about AI, but far less about the quality and accessibility of the data that sits underneath it. Until we address that issue, AI risks remaining more promise than reality. Those organisations that can connect, structure and use their data effectively will be far better placed to improve productivity, reduce risk and make better decisions, giving them a significant competitive advantage.

Industrialisation moves into the mainstream

Industrialisation was another major theme, and one that feels increasingly mainstream. In fact, I came away more convinced than ever that the debate has fundamentally changed. A few years ago, industrialised construction was still viewed by some as an alternative approach. Today, it is increasingly being discussed as a necessary response to challenges the industry has struggled with for decades.

Industrialisation is not a silver bullet, but it offers one of the few credible routes to improving productivity, quality and certainty at the same time

Productivity remains stubbornly low. Skills shortages continue to affect delivery. Cost pressures are persistent. Against that backdrop, I struggle to see how business as usual remains a viable option. Industrialisation is not a silver bullet, but it offers one of the few credible routes to improving productivity, quality and certainty at the same time.

The government’s £37bn New Hospital Programme is helping accelerate that shift. By adopting an industrialised approach at scale, it is demonstrating what can be achieved when clients create the conditions for innovation rather than simply talking about it.

Could social value unlock stalled projects?

Alongside these longer-term themes sat a more immediate concern: viability. It is difficult to think of a conversation I had during the week that did not touch on the challenge of getting projects to stack up financially. Interest rates, inflation, construction costs, planning delays and policy uncertainty continue to place pressure on schemes across the country. For many organisations, moving projects from ambition to delivery remains incredibly difficult.

What I found particularly interesting was how viability discussions now increasingly overlapped with conversations about social value. For too long, social value has often been treated as something that sits alongside a project rather than forming part of its core proposition. At UKREiiF, I saw clear signs that this is beginning to change. More clients, investors and public bodies are looking beyond traditional financial metrics and asking broader questions about economic and social impact.

At Reds10, we see this through initiatives such as Prisoners Building Homes, which creates pathways into employment for prison leavers, as well as through our work with SMEs and young people in the communities where we operate to boost skills, training and employability. These are not simply worthy add-ons. Increasingly, they form part of the overall value a project creates and, in some cases, can strengthen the rationale for investment and procurement decisions. In a tight market, a broader definition of value may ultimately be what enables projects to move forward.

From identifying problems to driving change

This points to a wider issue across the industry. Too often, we focus on the things we cannot control: policy decisions, market conditions or planning constraints. These challenges are real, but spending too much time discussing them rarely moves us forward.

What encouraged me at UKREiiF was seeing examples of organisations taking a different approach. The NHP is building momentum around industrialisation. The Defence Infrastructure Organisation is championing alliancing models and more collaborative ways of working. In both cases, major public-sector clients are using their influence to drive better outcomes and challenge established ways of working.

That, ultimately, is where I think the opportunity lies. The industry does not lack ideas. We know industrialisation can improve productivity. We know better use of data can improve decision-making. We know social value can create benefits that extend well beyond the balance sheet. What remains uncertain is whether we are willing to embrace them at the scale and pace required.

That was my biggest takeaway from Leeds this year. The challenges facing the industry are familiar. What feels different is that the excuses for not addressing them are becoming harder to justify.

Paul Ruddick is Reds10 chairman and founder