3
NEW TECHNOLOGY AND INNOVATION IN THE U.S. BUILDING-RELATED INDUSTRIES20

As discussed in Chapter 2, government's interests and activities in regard to new building technology can be enhanced to be an even more positive force for innovation. However, the value of government action in this area depends on the overall responsiveness of the U.S. building-related industries to new technology. If these industries are as laggard and resistant to change as some observers have asserted, then efforts to foster new domestic building technology may be unlikely to yield benefits in proportion to their costs. The committee believes that evidence shows otherwise, that investment in the search for new building technology is warranted, and that this search will motivate positive industrial response and broader benefits.

BACKGROUND

As previously noted, new construction (which includes major alterations and renovations of existing facilities) in the United States today is a more than $400 billion per year industry that employs some 6.7 million people. If spending on

20  

A thorough review of the status of U.S. building-related technology and innovation is beyond the scope and resources of this study. Appendix D presents a brief review of recent history, which provided a background for the committee's findings and recommendations.



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The Role of Public Agencies in Fostering New Technology and Innovation in Building 3 NEW TECHNOLOGY AND INNOVATION IN THE U.S. BUILDING-RELATED INDUSTRIES20 As discussed in Chapter 2, government's interests and activities in regard to new building technology can be enhanced to be an even more positive force for innovation. However, the value of government action in this area depends on the overall responsiveness of the U.S. building-related industries to new technology. If these industries are as laggard and resistant to change as some observers have asserted, then efforts to foster new domestic building technology may be unlikely to yield benefits in proportion to their costs. The committee believes that evidence shows otherwise, that investment in the search for new building technology is warranted, and that this search will motivate positive industrial response and broader benefits. BACKGROUND As previously noted, new construction (which includes major alterations and renovations of existing facilities) in the United States today is a more than $400 billion per year industry that employs some 6.7 million people. If spending on 20   A thorough review of the status of U.S. building-related technology and innovation is beyond the scope and resources of this study. Appendix D presents a brief review of recent history, which provided a background for the committee's findings and recommendations.

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The Role of Public Agencies in Fostering New Technology and Innovation in Building facility maintenance and operation, as well as materials manufacturing and transport related to construction, is taken into account the building industries as a whole represent a significant percentage of the nation's economy. Construction alone accounts for approximately 7 to 9 percent of gross domestic product (GDP). Building Research Board (BRB) staff estimates that the construction industries combined account for more than 12 percent of GDP. Construction by government at all levels each year typically accounts for less than 20 percent of this total activity. However, if government action to foster innovation in the building industries could increase overall productivity by as little as I percent, the likely payoff nationwide could exceed $5 billion annually. Federal programs alone could reap annual benefits of $200 million. In comparison to the rapid strides being made in electronics, medicine, or biotechnology, some observers feel that innovation in buildings and construction—in the United States, at least—is lagging. The typical user of buildings and construction finds that many of the materials and procedures employed are superficially similar to those of past decades and even past centuries. Some people argue that increasing concerns for environmental and public health implications of building materials and design elements, and progressively diminishing time horizons of decisionmakers focused on immediate financial results, were not conducive to sustained innovation in the U.S. building industries in the 1970s and 1980s. The highly variable and cyclical demand for construction also has made it difficult for builders and suppliers to maintain even medium-term commitments to investment for innovation. In addition, some observers note that the construction-related industries are dominated, more so than most other industries in the United States, by a male professional and crafts work force. Evidence in other fields suggests that a more balanced and diverse labor force may yield greater numbers of new ideas and different priorities in the pursuit of these new ideas. This raises many questions about labor force recruitment, education, and training that are beyond the scope of the present study. The committee knows of no research that demonstrates gender-specific aspects of innovation. Nevertheless, the committee observed that the U.S. building and construction industries do work to achieve technological progress, and there are results (see box). Digital controls for heating and cooling systems, power hand tools using lightweight batteries, computer-aided design systems that allow designers and builders to simulate construction of large buildings, roller-compacted concrete, advanced structural design methods, and drywall mounting adhesives are a few recent innovations (see Appendix E). Some of these innovations originated as inventions emerging from the research laboratory to find widespread application. Fabric and plastic structures, "virtual reality" computer simulations for facilities planning and design, and information management methods that facilitate collection and analysis of facility condition data are new ideas, now being developed, that may become true innovations.

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The Role of Public Agencies in Fostering New Technology and Innovation in Building AWARDS FOR INNOVATION Members of the construction community and their clients recognize that technological innovation often lies at the heart of productivity improvement. The Construction Innovation Forum, a 1987 outgrowth of the Business Roundtable's Construction Industry Cost Effectiveness Project, seeks to foster more innovation through its annual Nova Awards. These awards are given to projects that demonstrate outstanding contributions to quality improvement and cost reduction in the industry. The first awards, in 1989, recognized the U.S. Postal Service's Kit of Parts, a modular design and construction system for postal facilities, for its improvement of post office function, construction cost, and quality over traditional custom design and construction methods. The engineering firm PBQD's Mount Macdonald Tunnel Ventilation System and the Edward W. Face Company's Face Floor Profile Numbering System (developed to provide designers with an improved means for ensuring that construction measurements are repeatable and accurate) also received awards. In 1991, Morley Construction Company and the subcontractor, Adams and Smith, were recognized for their development of a means to install seismic isolation devices in the columns of the already constructed Rockwell International Information Systems Center in California. Each column was gripped with friction yokes that supported the building loads during installation, and techniques for sawing through the columns. BE&K Construction Company was recognized for its development of a portable child care center—building and staff—that assures its own and subcontractors' construction workers that their children's care and instruction will be reliable and stable. The center has encouraged employment of women workers and helped to overcome labor shortages. These cases demonstrate that innovation and new technology can be introduced at many points in the building process and can take varied forms. In addition, besides solving immediate problems and enhancing the industry, these innovations serve broader national goals. Other groups have begun awards programs as well. For example, the Society of American Military Engineers in 1991 awarded its first Technology Advancement Medal. However, there are no clear measures or adequate data bases to assess the extent and quality of innovation in the building-related industries. The committee depended primarily on its knowledge of these industries and analyses of innovation in other fields to judge whether the building industries are unique—and underachieving—in their pursuit of new technology and rates of innovation.

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The Role of Public Agencies in Fostering New Technology and Innovation in Building LACK OF DATA The lack of data about the construction-related industries posed particular problems for the committee's work. In the past 10 years, the U.S. Department of Commerce has discontinued or substantially reduced the reporting of some two dozen specific statistical series, such as industry reports on asphalt roofing, clay products, value of state and local construction starts, and economic outlooks for wood products, brick, and sheet metal work.21 While other data series have been improved, the overall result has been a reduced quality of data on construction-related industries. In addition, the accuracy of reported data is also in question. For example, reported 1986 spending for improvements to nonresidential buildings was $25.7 billion. A 1986 special Department of Commerce survey (to gather more detailed data) indicated that actual spending may have been $49.4 billion. This major discrepancy, $23.7 billion, represents more than 5 percent of the nation's total reported construction activity and suggests that the uncertainties in overall industry statistics may be substantial. ATTITUDES TOWARD NEW BUILDING TECHNOLOGIES A purported special resistance of U.S. building and construction industries to innovation and new technology has long been subject to discussion. A 1970 Department of Commerce report on housing technology described the obstacles to technological change in terms almost identical to another report a decade earlier (Nelkin, 1971). The director of the Department of Housing and Urban Development's notorious Operation Breakthrough program cited the construction industry's structure and general unwillingness to permit research outside of that structure as factors in the failure of federal R&D to achieve substantial payoffs (Finger, 1969). Studies of innovation in the building industries have, for the most part, been narrowly focused on individual segments of the market (e.g., housing) or specific technologies (e.g., uses of robots), and on the processes of design and construction. Despite the claims that building-related industries are technologically backward, such studies have provided little solid evidence of the problem, and some have shown the opposite result. 21   Reported to the committee by Department of Commerce staff. Also, informal communication with Mr. Kermit Baker, Director of Economics, Cahners Economics.

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The Role of Public Agencies in Fostering New Technology and Innovation in Building A recent study of innovation in housing, for example, takes a broader view and suggests that the full extent of innovation has been underrepresented in most previous studies. Further, "a newly constructed residential dwelling is very different from one constructed even fifty years ago, not only in terms of the building components used but also in the techniques employed and the overall performance of the completed structure" (Slaughter, 1991). A survey of literature and interviews with producers identified specific innovations—permanently installed in houses, commercialized in the period 1945 to 1990—that, though only a partial listing, contained 117 specific items. About 80 percent of these items were commercially provided by manufacturers, while the balance were innovations by builders and craftsmen on the job site. In this experience, residential construction exhibits similarities to the global automobile industry. In this industry, most innovations over the past two decades have involved integrating components and subsystems (e.g., electronic ignitions, digital sensors, and engine control) that reflect innovations in other fields. The resulting automobile of the 1990s is a high-technology product, even though its overall configuration is little changed. A similar evolution is occurring in housing. Particular needs are a primary motivator for innovation in all fields, and in building this is especially true. Solving problems on specific projects, rather than continuing programs of more generic research, may account for substantial (and largely unrecorded) efforts to develop and adopt new ideas. In addition, the building industry (and particularly residential construction) operates as an assembler of parts and components premanufactured by other companies. These companies operate in areas classified as other industries, and sales to the construction industry often comprise a small percentage of their total markets. Nevertheless, many of these other industries are significant investors in research and development (e.g., chemical manufacturers), and the building and construction industries (and users) reap benefits in new technologies produced as spin-offs of this larger investment. Most studies of the industry as a whole in the past two decades have been concerned with the decline in productivity observed in macroeconomic statistics, a decline that some people have attributed to failure to maintain a steady rate of innovation.22 However, little evidence from the construction industry itself is offered to support this attribution, and microeconomic studies have tended to highlight management issues as a primary source of lost productivity on the job site (e.g., Leonard et al., 1988; Smith, 1987; St. Germain, 1985). One major 22   Recent studies (Allen, 1985; Pieper and Allen, 1989) suggest that at least half, and perhaps much more, of the decline is attributable to a shift in the proportions of construction product output—from commercial to residential—and the procedures economists have used to account for inflation.

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The Role of Public Agencies in Fostering New Technology and Innovation in Building study characterized U.S. engineering and construction firms as "content to adopt construction technologies pioneered elsewhere," but blamed the design-bid-build strategy typical of U.S. practice—separating responsibilities for design and construction—for weakening incentives to adopt new technologies (Office of Technology Assessment, 1987). On balance then, the experience of the past several decades fails to demonstrate that the rates of technological advance and innovation in the building industries have been particularly low. The committee concluded that commonly used norms for assessing innovation rates based on other industries (e.g., aerospace, general manufacturing) are not necessarily an appropriate basis for judging the building industries, and new measures are needed. However, this conclusion begs the essential question: Are the rates of technologic advance and innovation in the U.S. building industries lower than they could or should be? The committee considered more circumstantial arguments. ENTRY POINTS FOR BUILDING INNOVATION The opportunities for adoption of new building technology (i.e., innovation in planning, design, construction, management, or maintenance of facilities) can occur at many points in the process of facility development, through the actions of any of the large numbers of people and organizations involved in that development. The owner, designer, and builder comprise the major participants in that process, but each of these three is in fact a complex group of individuals and organizations that must work together to accomplish the aim of a completed project. Appendix G presents a more detailed portrayal of this complex system. The key consequence of this complexity, with regard to innovation, is that new ideas and products may enter the process at many different points and will move, in principle, from the lowest levels in the process (i.e., vendors of products, specialist subcontractors, and individual crafts) upward to appear in the final product, the finished facility. These innovations spring primarily from new products, tools, and procedures offered by vendors and from new procedures and relationships initiated by labor, craftsmen, designers, managers, and others working on the project. Central to the process is the facility owner, who must state his or her needs and employ appropriate resources to meet those needs. The owner's relationship to the facility is, in principle, long term. The facility, viewed as a project, is really not "completed" until the owner replaces, sells and vacates, or otherwise breaks this relationship. When the owner is or represents a large organization, both administration (i.e., related to the organization) and operations (i.e., related to the facility and its occupants) will be considered and will influence what

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The Role of Public Agencies in Fostering New Technology and Innovation in Building resources are appropriate and how they are employed. Operational aspects are further complicated because the owner often differs from the user. In government facilities, agencies such as the General Services Administration and the U.S. Army Corps of Engineers develop facilities for other governmental units. Although innovation can start at any point in the facility development process, each of the parties to the process may have particular and differing points of view on the costs and benefits of a proposed new technology (e.g., materials, products, procedures). For example, an improved material may lead to substitution of that material for another, leading in turn to loss of sales for some vendors and loss of work for those who deal with the replaced material. Some participants in the process may oppose new technologies that other participants favor, because the costs and benefits are (or appear to be) distributed disproportionately or simply because the new idea has been proposed by someone else. New products and processes may then face a tortuous path on the road to becoming innovations. The owner may have great difficulty in determining the ultimate value of the potential innovation and may not even have the opportunity to make that judgment. A sophisticated owner may be able to maintain good information on new developments in each of the fields that represent opportunities for innovation, but most owners must generally depend on designers and builders for information and guidance. STATUS OF BUILDING RESEARCH As noted in previous chapters, some observers have expressed concern that the declining position of U.S. construction industries in global markets is due, at least in part, to a declining commitment to research and development in building-related industries. Aggregate spending by industry and government on research and development in these industries—at about 0.4 percent of annual construction output—is well below levels that the industries' aggregate size and importance in the nation's economy warrant (BRB, 1988). In comparison to other mature industries such as appliances (at 1.4 percent), automobiles (1.7 percent), or textiles (0.8 percent), this spending rate is low. Compared to the construction industry in other countries, the spending is low as well. Estimates assembled in 1983 by the Conseil International du Batiment pour la Recherche l'Etude et la Documentation showed the U.S. rate of building R&D spending at much less than half the rate in Japan, and slightly more than 20 percent of the spending rates in Sweden and Denmark, the nations seemingly most committed to building research (Sebestyen, 1983). Among the leading

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The Role of Public Agencies in Fostering New Technology and Innovation in Building industrialized nations, only Germany seems to spend at a lower rate, relative to the size of its industry, for building research.23 Despite new U.S. programs started since these statistics were assembled (e.g., the Construction Industry Institute, the Civil Engineering Research Foundation, the Corps of Engineers' Construction Productivity Advancement Research program), BRB staff estimates suggest that the current situation is little changed. According to the National Science Foundation, total annual nondefense R&D expenditures in the United States have stayed nearly level at about 1.8 percent of gross national product since 1981 (Jankowski, 1990). In West Germany and Japan the 1988 spending rates were approximately 2.6 and 2.9 percent, respectively, up some 30 to 40 percent over the past decade. As has already been noted, research does not necessarily lead to innovation but is more likely to do so when close ties exist between R&D and the potential users of the resulting new technology. The committee is unaware of any comprehensive analysis or data source that would enable analysis of the strength of this relationship and the factors that influence it in the building-related industries. Nevertheless, there is evidence that supports its importance. A 1990 evaluation of Japan's construction industry, sponsored by the National Science Foundation, found that aggressive and highly productive research spending by industry and government have placed that nation at the forefront of construction technology. Despite substantial dependence on ideas initially developed in the United States and other countries, Japanese industry leads the United States in many areas and is gaining rapidly in virtually all areas examined. The quality of new facilities in Japan equals and often exceeds that of new construction in the United States, and Japanese industry's efforts may lead to "new breakthrough technologies' (Tucker et al., 1991). A subsequent reconnaissance of major Japanese construction R&D facilities, sponsored by the Civil Engineering Research Foundation (1991), attributed much of Japan's apparently substantial ability to move research results into practice to the very close ties between researchers and design and construction professionals. Major construction companies (which in Japan are frequently responsible for design as well) maintain their own well-funded research facilities and research programs that extend beyond these facilities to the project site. Many of these companies rotate professional staff or otherwise ensure that researchers experience field conditions and that field professionals participate in research. Government research facilities may be used jointly by government and private sector researchers, and government uses specific projects to ensure a "market" 23   However, such data on the building industries in most countries are difficult to assemble and notably less reliable than manufacturing industry statistics (Brochner and Grandinson, 1991).

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The Role of Public Agencies in Fostering New Technology and Innovation in Building (i.e., a means for recovering research investment costs) for research in high-priority areas. The importance of the market linkage is demonstrated in the United States as well. For example, Du Pont and other chemical companies have in recent years used their research to develop a number of polymeric solid interior surface materials for countertops and other work surfaces. These materials, with such brand names as Corian, Avonite, and Nevamar, offer easy workability, high durability, and a wide range of colors and visual textures that have led to their increasingly widespread use in hospitals, restaurants, and residential kitchen and bath applications. DETERRENTS TO TRANSFER OF NEW TECHNOLOGY As such cases illustrate, once new ideas are produced—in the research laboratory, on the job site, or elsewhere—they must be transferred into general practice to become innovations. The structure of the building industries, (in which many smaller firms operate in narrow geographic areas and lack vertical integration), a complex regulatory framework with many locally administered building codes, concentrated attention on reducing the initial cost of facilities (often at the expense of higher operating and maintenance costs), and exposure to litigation that increases te business risks of new products and processes—all are among the factors that have deterred the spread of new ideas. Materials and equipment manufacturers and their sales representatives play a role as sources of new technology and innovation, but this role has generally been underestimated in studies of innovation in the building-related industries. An earlier study by the BRB (1988) attempted to include this source and concluded that roughly two-thirds of the annual spending for U.S. building-related research comes from manufacturers, primarily for new product development and marketing support activities. Solid surface materials (which require little or no postfabrication finishing) are only one of many innovations that have entered the building-related industries from this source (refer to Appendix E). Of the remaining annual R&D spending, BRB staff estimate that roughly two-thirds of the balance (i.e., about 22 percent of total spending overall) supports activities in university research facilities. The separation of researchers from the construction contractors and facilities managers who comprise the potential users of research results (in direct contrast to the Japanese situation described previously) deters transfer of new ideas into practice. Owners may choose among a variety of forms for the contractual relationships with designers and builders, and some of these relationships are more congenial to innovation. Award of contracts based on a lowest-bid

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The Role of Public Agencies in Fostering New Technology and Innovation in Building procurement strategy, for example, increases the bidder's risk in trying new ideas because the bidder must bear the costs while the owner may benefit over the longer term. Open bidding that encourages competition makes it more difficult to screen unqualified suppliers or give preference to those inclined toward innovative practices. Rigid budgeting and construction contracting practices that focus on low price often preclude higher spending to procure a facility that will cost less to maintain or will yield more reliable service in the future, although innovations that reduce initial cost may be encouraged. Preselection of bidders, design-build procurements, and other mechanisms can be used to encourage cooperation among the participants in the process and thereby ease the introduction of new technology (Lemer, 1991). Poor communication of advances in knowledge in general may be another important deterrent to the transfer of technology and subsequent innovation in the building-related industries. Testimony of agencies and researchers suggests that many potentially useful new ideas fail to reach a broad audience of potential users. While informal networks of communication among researchers and users are effective, dependence on the National Technical Information Service (NTIS)24 and inadequate programs for personnel exchange (particularly with overseas research institutions) have, in the building industries, failed to provide the information exchange needed for effective innovation. In addition, there is little transfer of researchers among building research and other fields, which limits the cross-fertilization that has been seen to occur at many leading industrial research laboratories. The Construction Industry Institute (CII), based at the University of Texas, was established to motivate a closer partnership among academic, government, and private sector members of the industry and thereby improve communication as well as commonality of direction in solving industry problems. The CII uses a portion of the funds provided by its member participants to sponsor researchers in studies of current problems. An emphasis in this research has been placed on management-related issues. The Civil Engineering Research Foundation (CERF) and the National Institute of Building Sciences (NIBS), both based in Washington, D.C., also conduct or sponsor research in similar topic areas. All of these organizations have encountered difficulties achieving broad dissemination and widespread adoption of their work. 25 Centralized organizations such as the CII, CERF, and NIBS are most accessible to larger firms but are less effective in reaching the many medium- 24   The NTIS distributes government publications and many other documents to the general public. 25   The BRB has encountered these problems as well. Inability to realize commercial advantage or otherwise recover costs is a serious deterrent to technology transfer activity.

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The Role of Public Agencies in Fostering New Technology and Innovation in Building and small-sized firms operating in the building-related industries. The very widely distributed nature of these industries inevitably slows the spread of new ideas.26 Some corporate and government owners have improved integration in the delivery process by forming design and development teams that bring together corporate staff and the construction contractor, along with the designers and sometimes major building subsystem suppliers. These teams come together in a variety of ways, and such examples as CIGNA Corporation's headquarters buildings, the operations of the major Japanese general contractors, and some design-build procurements are practical illustrations of team formation and management (Lemer, 1991). The committee concluded that the current structure of the building-related industries poses inherent problems for transfer of new ideas to practice. These problems probably make the building industries less susceptible than other sectors to applications of new technology. Efforts to provide a better integration of the process from the development of new ideas to their application in practice could enhance innovation rates in the building-related industries. LIMITED OPPORTUNITIES FOR INNOVATION Buildings and other constructed facilities typically have long service lifetimes of 30 to 40 years. Many structures survive much longer, sometimes valued more for their historic associations than their functional potential. Government buildings often have projected lifetimes of 100 years, although renovations may be required during this long life. Most owners and users of these facilities have a much shorter perspective and get only one or two chances over the course of a career or lifetime to participate actively in the building process. Thus the marketplace of users and owners, identified in most fields as a driving force for innovation, is severely constrained in the area of building. In many fields of manufacturing, product cycles of three to five years permit innovators to recover research and development costs at acceptably rapid rates. Computers are currently an extreme case: one leading maker of work-stations popular with the developers and users of computer-aided design has introduced eight new generations of computers in less than 10 years (Bulkeley, 26   In Sweden, with strong government support for the building industry and a much smaller set of participants, ideas spread more quickly. This situation sometimes causes problems when new ideas receive limited testing before widespread application (H. Westling, Royal Institute of Technology, Stockholm, personal communication with A. Lemer 1991).

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The Role of Public Agencies in Fostering New Technology and Innovation in Building 1991). To the extent that the technology in question is used in applications with shorter service lives (e.g., microcomputers used by designers and facilities managers, telecommunications or HVAC27 controls fitted to modular networks, paints and other interior finishes, just-in-time delivery scheduling by contractors),28 higher rates of innovation can more reasonably be expected than in most aspects of buildings. Commercial developers, in particular, are poorly suited to drive many aspects of building innovation because they typically must seek to recover the costs of the project quickly, and tenants may be hesitant to pay higher rents (which in turn lead to higher capital value and sales price for the developer) for innovation that does not clearly yield direct benefits. Major corporations or other large institutions—or governments—that build for their own long-term use (and are thus able to reap the advantages of new technology that enhances a building's lifetime performance) are more likely to find value in the search for building innovation. Major constructors stand to benefit directly from improvements in construction speed, safety, and reliability, and thus may be prone to search for innovation in the construction process. Owners benefit as well, to the extent that savings are passed along or the resulting facility's quality is increased. Architects and engineers responsible for facilities planning and design may also seek innovation that improves their own work, and they are generally responsive to new products and processes that offer their clients improved performance at an affordable and competitive cost. However, buildings and other constructed facilities are subject to a large number of prescriptive controls placed on facility design, construction, and operation to ensure the safety and health of building occupants and neighbors. 29 These controls, embodied in standards and guide specifications, building codes, and procurement regulations, contribute to social well-being but inevitably constrain the individual ability to innovate, both by preventing precipitous introduction of untried products and procedures and by 27   Heating, Ventilating and Air Conditioning. 28   The ''lifetime'' of a typical building construction project is 18 to 36 months. 29   Performance specifications state the results required rather than specific materials and dimensions selected to deliver these results. Such specifications, now widely used for structural systems and slowly appearing in other aspects of facilities, are purported to reduce one obstacle to innovation. Designers and owners, particularly government agencies that must allow open, competitive bidding, are sometimes reluctant to adopt performance specifications, fearing that available forms for such specifications cannot adequately define the requirements.

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The Role of Public Agencies in Fostering New Technology and Innovation in Building imposing costs on those who seek to have these products and procedures accepted. Concern for consumer protection introduces similar problems in other areas, most notably the food and drug industries. The government's Food and Drug Administration must approve new drugs and food additives for human consumption and, by establishing the standard of judgment for safety, to some extent moderates the burden of risk assumed by private sector innovators in these industries. However, many observers agree the system is very costly. Examples representing less risk to human health and less cost include the Underwriters Laboratory, Inc. (UL), which tests and certifies a wide range of electrical products. Except in limited areas such as UL, the building-related industries have no comparable government-endorsed mechanism for approving new technology. The professional societies and model building code organizations that review new technology can recommend its acceptance, but it is then up to each government agency, state, or local government to accept new products or procedures on their projects or within their jurisdictions. Independent evaluations of demonstrations of new technologies in transportation facility construction30 have reportedly helped speed adoption of these technologies. Adapting practices currently used in Japan (CERF, 1991) and Europe, CERF has proposed that government and industry should join to establish one or more Innovation Test and Evaluation Centers (ITECs) to test, demonstrate, evaluate, and document innovative building technology (Bernstein, 1991). These ITECs would help reduce the perceived risk of applying new technology by assessing more thoroughly the likely actual risk. Such centers might then help the industries to deal with the seemingly progressive growth in the public's aversion to risk in general, particularly to the types of long-lasting risks to public health and safety that are commonly encountered in the building-related industries.31 Designers, owners, and managers are understandably reluctant to try new technology that may lead to expensive litigation if an accident occurs or the technology fails to perform adequately. Consider asbestos: Millions of dollars are being spent to remove this once popular fireproofing and insulating material that is now seen to pose an unacceptably high risk of cancer to building occupants. This example, admittedly extreme, nevertheless influences many people who might otherwise be inclined to bring to market a product or other innovation with an uncertain level of risk. 30   Funded by the U.S. Department of Transportation. 31   A more complete discussion of risk in and around buildings may be found in the BRB report Uses of Risk Analysis to Achieve Balanced Safety in Building Design and Operations (McDowell and Lemer, 1991).

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The Role of Public Agencies in Fostering New Technology and Innovation in Building On the other hand, the system for dealing with tort liability is designed to protect valid public as well as private interests, and some committee members concluded that this system is generally effective—albeit costly—in responding to the occasional losses associated with the unavoidable risks of new technology (see Appendix F). Improvements in the efficiency of the tort liability system (i.e., the relationship of the costs of the system to the actual losses being addressed) are necessary to reduce the system's apparent deterrent effect on innovation. In addition, insurance has proved to be an effective means of distributing risk to better match the anticipated rewards of new technology. In government construction, agencies are, in principle, self-insuring. However, failure to budget for correcting losses associated with trying new ideas means that the government is, in effect, uninsured. The threat of financial loss and damage to professional careers therefore seriously limit opportunities for innovation. PLACE OF UNIVERSITIES AND OTHER EDUCATIONAL INSTITUTIONS Educational institutions play an important role in training the architects, engineers, and other building professionals who produce, perfect, or accept and apply much of the new building technology that enters practice. Budgetary pressures that threaten the levels of education and the production of academic researchers have been a subject of frequent concern among academics (e.g., National Research Council, 1985). Some practicing professionals argue that university courses in architecture and several areas of engineering are poorly tailored to fit the needs of professionals in the building industries. They assert that newly graduated architects and engineers have little understanding of the practical implications of theory and almost no familiarity with current practices in design and construction. These young professionals thus lack an essential ability to deal in practical terms with the cross-disciplinary judgments that are inherent to facilities design and construction. In addition, they typically have little exposure to social science, organizational, and management factors that influence implementation and long-term performance of facilities. Some educators counter this argument by observing that practitioners need a firm grounding in basic principles to enable them to keep pace with rapidly changing technology. These educators find it increasingly difficult to deliver what they would view as a well-trained professional graduate within the constraints of the four-year college program still typical for engineering. Graduate programs are already the predominant source of first professional degrees in architecture and landscape architecture, and the master's degree is

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The Role of Public Agencies in Fostering New Technology and Innovation in Building increasingly essential for engineers. Throughout the building-related industries, apprenticeship and other on-the-job training are recognized as essential elements of eduction. In general, education can create an intellectual environment more or less conducive to innovation. Committee members noted that levels of training and education among European craftsmen, design professionals, and construction companies appear to be generally higher than those in the United States and attribute higher European rates of new technology development, at least in part, to this factor. REFERENCES Allen, S. G. 1985. Why construction industry productivity is declining. Review of Economics and Statistics 67(4):661–669. Bernstein, H. M. 1991. Is innovative engineering becoming extinct in the U.S.? American Consulting Engineer 2(4):37–38. Brochner, J., and B. Grandinson. 1992. R&D cooperation by Swedish contractors. Journal of Construction Engineering and Management 118(Mar):3–16. Building Research Board (BRB). 1988. Building for Tomorrow: Global Enterprise and the U.S. Construction Industry . Washington, D.C.: National Academy Press. Bulkeley, W. M. 1991. Computers become a kind of commodity, to the dismay of makers. Wall Street Journal CCXVIII(47):A1. Civil Engineering Research Foundation and Japan International Research Task Force. 1991. Transferring Research into Practice: Lessons From Japan's Construction Industry. Washington, D.C. Finger, H. 1969. The goal of Operation Breakthrough. Journal of Housing (December):587. Jankowski, J. E. Jr., 1990. National Patterns of R&D Resources: 1990 Report number NSF 90-316. National Science Foundation, Washington, D.C. Lemer, A. 1991. Team-building and quality buildings. Design Management Journal 2(2):54–58. Leonard, C. A., P. Fazio, and O. Moselhi. 1988. Construction productivity: Major causes of impact. AACE Transactions D. 10.1-D. 10.7. McDowell, B., and A. Lemer, eds. 1991. Uses of Risk Analysis to Achieve Balanced Safety in Building Design and Operations. Building Research Board, National Research Council. Washington, D.C.: National Academy Press. National Research Council 1985. Engineering Graduate Education and Research, Washington, D.C.: National Academy Press.

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