Every day, around the world, 180,000 people move to a city. It’s an unstoppable process that began over 200 years ago with the industrial revolution, and it shows no sign of abating.
Catering to this demand are the massive futuristic smart cities like Songdo in South Korea, and Kochi in Kerrala India, where technology is integrated into the underlying infrastructure.
In fact the $3.17 trillion annually spent on infrastructure is increasingly focussed on sustainable and technologically advanced development according to the Organisation for Economic Co-operation and Development.
With much of this growth happening in our region, there are significant opportunities for Australian companies capable of delivering high-tech, sustainable urban services and infrastructure.
India’s top ten cities will have to triple in size over the next 15 years if the country is to keep up with the increased demand for urban housing and infrastructure.
Counting up the opportunities
China currently accounts for more than 50 percent of the building being carried out globally. Due to the Chinese Green Building Assessment system established in 2006, all new buildings need to demonstrate 50-65 percent energy savings based on 1980s standards.
In addition to this, the Chinese government recently launched a project to renovate existing buildings to make them more energy-efficient, and capable of offering residents access technology such as high-speed internet connections. This project involves up to 25 percent of the buildings in medium-sized cities, and 10 percent of those in small cities.
The success of Australian architectural firms in China is already well established. Constructions such as the Beijing Olympic Swimming Centre, designed by Australian architects PTW, paved the way for the current raft of huge building projects including a tranche of retail projects from Sydney-based architects, The Buchan Group.
China’s 12th Five-Year Plan, which has been operating since December 2010, has created enormous opportunities for engineering, building and construction companies with a focus on sustainability. It indicated significant and ongoing investment in the construction of airports, sewerage systems, utilities and affordable housing featuring sustainable technology.
Meanwhile, a recent Austrade report into demand for housing in India suggests urbanisation in India is being driven by a mass migration which will see city populations swell by 700 million by 2050. The report also estimates that 75 percent of the buildings that will exist in India by 2030 have not yet been built.
To put it in perspective, India’s top ten cities will have to triple in size over the next 15 years if the country is to keep up with the increased demand for urban housing and infrastructure.
In July this year the Indian government announced its intention to support the building of 100 new Smart Cites – featuring high-tech communication systems, and energy efficient construction methods. This means that a significant proportion of the infrastructure created will be focussed on delivering access to technology as well as sustainable design.
There are also significant opportunities for high-tech, sustainable development due to similar urbanisation trends in the Philippines, Turkey, Vietnam, Malaysia and India, according to Austrade.
According to a UN report into global responses to urbanisation, the trend is driving demand for more sustainable high-tech housing largely because traditional construction techniques simply won’t scale to meet to explosion in demand. As a result, the focus on green construction in China will ultimately pave the way for similar construction projects all over the world.
Austrade research suggests there are significant opportunities for Australian specialists in everything from design theory to energy efficient building materials, and co-generation technologies like solar power and bio-fuels.
As such, there are significant opportunities for sustainable building and construction companies capable of navigating Asian business culture. According to a PWC whitepaper, the most important tactic is to have experienced staff who understand the Asian market, before attempting to do business in China, or any other Asian country.
The whitepaper, Australia in the Asian Century, outlined four steps Australian businesses need to take before embarking on a foray into Asia. These include a full assessment of the market potential to determine real growth opportunities, a complete financial analysis and understanding of regulatory frameworks, a clear understanding of the value proposition and a complete resource capability audit.
And although expansion into such new markets can appear complex, the demand is such that the resulting business will be worth the effort.
- Rapid urbanisation is leading to a massive increase in demand for sustainable building, construction and engineering services.
- The focus is on sustainable building techniques, as traditional construction techniques won’t scale to meet the massive spike in demand.
- Over 50 percent of the building currently being carried out around the world is taking place in China.
- Staff with experience with Asian culture and business are an essential component of expansion into the region.
- Experience in sustainable building practices in China will feed into demand for sustainable building practices elsewhere.