Engineering Growth: three important issues

Nelson Ogunshakin
19 February 2015

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Nelson Ogunshakin previews the ACE National Conference and highlights finance, SMEs and industry’s response to devolution as critical to successful development of economic infrastructure.

The 2015 ACE National Conference is on 4 March and it comes at a critical juncture in the political calendar. With the general election in just a few weeks, the theme for this year’s conference is Engineering Growth. Invariably the industry faces numerous challenges, many of which will be debated at length during the conference, and some I will comment on below.

But first, you might well be wondering, what is the key to engineering growth? Well the answer is simple – infrastructure investment. Without investment, you have limited opportunity for growth.

If we are to increase our GDP then engineering is crucial. Investment creates employment, employment creates revenue, and revenue generates income and tax, ultimately steering the economy in the right direction.

"It is absolutely imperative that large companies partner with SMEs because they are specialised firms with resources worth tapping into."

The demand for getting from A to B is increasing and much depends on whether you have the social and economic infrastructure in place, so it is vital we engineer growth to make this work.

At the conference, experts will sit in on conference sessions discussing everything from the role of SMEs to how devolution will impact the industry. But there are three topics open to debate that have piqued my interest…

Financing Infrastructure

When it comes to alternative methods of financing infrastructure, investment doesn’t strictly have to come from either the public or private sector. Indeed, it could well be a collaboration formed at different stages in the development process.

Essentially the onus falls on government to create an enabling environment, one which allows both the public and private sector, either in collaboration or separately, to go ahead with projects where the cost of construction is effective, is delivered and offloaded at a price that is reasonable, and can either be paid for in one go or received over a period of time. But it is important that government sets a target where financiers are likely to see a return on investment.

The ACE National Conference takes place in London on 4 March. All ACE member companies have two free tickets to the event. Don’t miss out: visit www.acenet.co.uk or click here to book your place.

Involvement of SMEs on large-scale projects

It seems appropriate at this point to talk about SMEs and their role in the industry. When I look at the London Olympics, to my mind, the preparatory work behind the event was a classic example of a proper procurement process being implemented.

The same model adopted for the Olympics was also used for Crossrail. There the procurement process encouraged SMEs to bid for projects. And how did it do that? It used a tiering process where large firms with large turnovers were involved in projects at various points in the process, but were conditioned to employ SMEs.

It is absolutely imperative that large companies partner with SMEs because they are specialised firms with resources worth tapping into. The opportunity for SMEs is great, but a lot boils down to the government adopting an effective procurement process.

Regions’ response to devolution

All the talk recently has been about what impact devolution will have on the industry. When the next government comes into power, we cannot assume that devolution will automatically happen. But assuming it does, how can the industry take advantage of it?

One major criticism levelled at government by the industry is that everything is London centric, and you only have to look at the property market in the capital to notice that it is quickly becoming unsustainable. If government redistributes the wealth, it is important the industry follows its lead.

Most of the companies in the industry have regional branches, and those branches will benefit from devolution because of the increased pipeline and workload. But I would say that those regional branches have to be on their toes and be ready for the challenges that lie in wait.

Ultimately what I want those in attendance to take away from the National Conference is to understand the political landscape that we are operating in. We need to seize the opportunities it presents and the challenges that go with it. Let us us be aware, prepare and deliver on the expectations that have been set.

Nelson Ogunshakin is chief executive of the Association for Consultancy and Engineering.