Technology transfer - challenges in use of new technology and materials in real estate

Using personal anecdotes and insights, Sunil Agarwal FRICS writes about challenges in new technology adoption.

21 January 2016

Expert Talk


“Technology Transfer is effective where it helps the industry to more effectively use its human, physical, and capital resources”

A majority of Indian real estate industry still uses conventional methods for construction. These methods are outdated and make project execution cumbersome, time consuming and often the finishes are of lower quality. This is surprising for a market where exists such a large shortage of housing (20 to 30 million as previous estimates) and where there is a need to deliver housing at a much faster pace. In my previous role as a developer, my team tried to incorporate some modern methods and materials in the construction projects which were being executed by my company so that the projects could be delivered faster and better, but the initiative took some beating due to practical challenges at the ground level. I will be sharing some of my experience in this article, but before that I want to narrate a small incident that happened in a village of Moradabad, where I was executing ‘Diversified Agricultural Support Project’ for the World Bank in the early stage of my career.

In large Mango belt of Moradabad region, one of the biggest challenges is to protect the ripened fruits from parrots. Almost 20% or more crops were getting spoiled. Conventionally farmers employed labourers to make noise using an instrument “Gandhak    Patas” for scaring parrots and driving them away. A team of scientists had researched for years and produced a chemical which when applied on the fruits, the parrots would not eat it. We organized a small meeting of the orchard owners with this team of scientists so that this new chemical could be used and the wastage of fruits would be controlled. In the meeting when the scientists showed the magic chemical and its effect on the parrot discarding the fruit, one old farmer started to laugh and told the team that this chemical is bound to fail as it is impossible to apply chemical to all the fruits hanging on the trees. Anyone attempting to do so would break his bones and it would be difficult to keep a count of all the fruits, as new fruits would grow on the trees throughout the season. This magic chemical has not hit the market till date as there is no method that can take care of the problems of the end user.

Most of the times ‘Technology Transfer’ and application has to be thought through and that may be a bigger challenge than the Technology itself, as is clear from the above example. In real estate one challenge we faced using the new technology was changing the mind-set of buyers to adapt to the Gyp-Crete partition walls. These were pre-cast, environment friendly and light in weight and gave equal strength and insulation as they were hollow. Use of these walls would mean saving time, better quality, better finish and lighter structure which would save cost as well. Most of the buyers however did not prefer this as the walls made sound when they were knocked at. It was difficult to change the position of switches and plumbing points, and almost impossible to break and alter the layout. Though the chances of an occupier making these changes were rare, the buyer still wanted flexibility.  No matter how much stronger the walls were, it was the sound that made the buyers uncomfortable. We had to revert to the use of conventional ‘brick’ walls. The only place these walls could be used for construction were the boundary walls and some structures such as guard rooms etc.

In another project, we were exploring a shuttering format that would make the execution faster. In this technology a variety of cement boards were used in place of shuttering and it wouldn’t be necessary then to remove the same as these boards would act as plaster requiring very little finishing. The time for execution would be reduced to half. While in this technology, the walls did not make sound; there was another problem that was difficult to tackle. Most of our buyers were mentally prepared to live with 30 months of construction and did not want to pay earlier, i.e., 12 to 15 months. Also this technology was only marginally cost effective to the traditional method of construction.

Besides the buyer related issues, there were other issues in the use of the above technologies, i.e., there were no readily trained work force to execute the projects and use of these technologies would also mean training of the manpower leading to increase in cost. Also architects would be required to make working drawings according to the new technology and structural engineers would have to do design calculations based on the new technology.

Though this was a small challenge, the larger challenge would come when sanctions were to be given and completion certificates were to be applied for. Local government bodies do not have the capacity to evaluate such projects. Another reason as to why the use of MIVAN technology is not popular is that in this technology, same shuttering has to go through multiple cycles so as to recover the cost. So, the design had to be similar for a number of flats. In a real world, designs need to change with the market need and in India the complex ‘Super Area’ calculations make it next to impossible to replicate the design in different geographies. So only a large or premium project can use such a technology.

For the past decades, new technologies have been facing hurdles and barriers at various stages of their development and commercialization. These hurdles and barriers can potentially cripple a technology’s ability to enter and/or succeed in the marketplace. I am not proposing that we should not use technology and should continue with the conventional methods, but any technology should be adopted, only if there is focus on ‘Technology Transfer’ and the use will become effective when such technologies are first implemented with large projects, where the scale of projects will justify the Technology Transfer costs, i.e., training of manpower or for that matter giving scale to the vendors so that their production scale is achieved. Small employers will always have a tendency to avoid new technologies that require large capital investments, and express a strong resistance to interventions that may decrease worker productivity, reduce job quality, require frequent and/or costly maintenance, introduce new health and safety hazards, or change the nature of a job so dramatically that it requires much more added supervision.

Technology Transfer is effective where it helps the industry to more effectively use its human, physical, and capital resources by providing knowledge, information, or assistance, which leads to improvements in its facilities, equipment, manufacturing methods, and management or marketing methods. The technologies that are likely to experience the highest rates of adoption are those that are ‘inexpensive, which are low budgeted, easily maintained, compatible with one’s need for creativity, and are relatively easy to learn.’ There is a need for increased effectiveness evaluation research, as well as cost-benefit and return-on-investment analysis to highlight productivity and financial gains that may be achieved by implementing seemingly cost-prohibitive interventions or specific kind of innovative finance is made available. There is also a gap in research about government’s non-regulatory interventions (e.g. subsidies, tax breaks, etc.) to incentivize new technology adoption in the construction industry. In order to better facilitate successful technology transfer and diffusion in the construction industry, it is important to gain a greater understanding of the most effective non-regulatory government tools for incentivizing the development and commercialization of worker safety and health-related technologies.

Thus, it can be concluded that, there needs to be a greater focus on the ‘Technology Transfer’ than what is being done today, and government and industry must make joint efforts so that new technologies do not remain in the text books and labs alone.

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