College of Leadership & Management

College of Leadership and Management Shaping Australia’s future: economy, society and place What the experts said.

Engineers Australia | College of Leadership & Management

Event overview Engineers Australia’s College of Leadership and Management held three highly popular and engaging breakfast forums in Sydney (June 2015), Melbourne (November 2015) and Perth (February 2016) - Shaping Australia’s future: economy, society and place.

Each event explored and debated the challenge of planning and building productive and liveable cities supported by modern efficient infrastructure.

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Engineers Australia | College of Leadership & Management

Engineers contribute to an important debate

By David Singleton, Chairman, College of Leadership and Management The Grattan Institute report ‘Mapping Australia’s economy’ found that city centres are the new drivers of Australian prosperity… yet there are many challenges which are preventing our cities from fulfilling their economic potential.

EA’s College of Leadership and Management ‘Shaping Australia’s future: economy, society and place’ series generated some thought provoking discussions around this topic, and also presented some tangible actions that we - as engineers - could and should be considering.

With over 400 guests attending across the three events, the diverse range of speakers gave a comprehensive view of the future of Australian cities and some of the strategies for achieving effective and attractive future development. The importance of and opportunities for planning for people was emphasised.

The event illustrated the contribution that the engineering profession – operating in a holistic environment – can make to this important debate.

As a profession, we must provide opportunities for engineers to participate in these conversations. We must encourage engineers to make informed contributions that support the debate with thoughts and ideas which go beyond a technical contribution alone.

EA’s College of Leadership and Management provides one opportunity to frame such debates. The college’s focus on engineering leadership supports this ambition and provides the opportunity for engineers to develop their skills beyond technology alone.

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Engineers Australia | College of Leadership & Management

A mix of engineers, planners, financiers and policy makers - all with an interest in Australia’s urban future - attended the events and were treated to thought provoking discussions from a group of panelists that reads like a who’s who of the built environment.

Their collective knowledge and ideas for the future of this country, serve as the basis for this event e-zine: Our cities Romilly Madew CEO, Green Building Council of Australia

Reinventing neighbourhoods – people and place Lucinda Hartley Co-Founder and CEO, Codesign Studio

Amanda Steele Head of Sustainability, CBRE

Jenelle Provost General Manager of Elizabeth Quay, Metropolitan Development, WA Smart Cities Alison Rowe Global Executive Director Sustainability, Fujitsu Group

Jurgen Schneider Head of Market Development for Pacific Siemens Ltd, Australia

How will we build our future?

Andrew T. Harris Director, Engineering Excellence Group, Laing O’Rourke

Peter Bowtell Principal, Arup Australasia

Our infrastructure – how will we finance it?

Jim Miller Head of Infrastructure, Utilities & Renewables, Australia & NZ – Macquarie Capital

John Pickhaver Executive Director, Co-Head of Infrastructure, Utilities & Renewables, ANZ, Macquarie Capital

The political context Joanne Gray Editor, Boss Magazine, Australian Financial Review

Patrick Durkin Bureau Chief and Boss Deputy Editor, Australian Financial review Melbourne

Engineers Australia | College of Leadership & Management

How this report can help you This e-zine on the ‘Shaping Australia’s future: economy, society and place’ series, provides a valuable insight into what the experts said over the course of the three events - where they see Australia’s future and most importantly, how they believe we can get there.

The event explored the themes and the trends of the future built environment in our cities, and also looked at trends from an infrastructure finance point of view and what role governments should play in the longterm infrastructure planning.

Contents Where are we now? The context for this event series .....................................................................................p6 Key issues and ideas for action...............................................................................................................................p7-10 • Reinventing neighbourhoods – people & place............................................................................................p7 • Smart cities and the role of technology..........................................................................................................p8 • How we will build our future.............................................................................................................................p9 • How can we finance it?.......................................................................................................................................p10 What’s next? By David Singleton, Engineers Australia Chairman of College of Leadership and Management and founder of the series..........................................................p11

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Engineers Australia | College of Leadership & Management

Where are we now?

Planning effectively for our future is an issue we must come to grips with.

The future prosperity of Australia is inextricably tied to how we plan for our biggest cities to absorb six million extra people by 2031 and also how we plan to achieve and sustain a modern, dynamic 21st century economy.

On the political front, in December 2015, Prime Minister Malcolm Turnbull called for an ‘ideas boom’ as he unveiled $1billion vision for Australia’s future.

A key focus of the much anticipated ‘innovation agenda’ revolves around strengthening ties between the business community, universities and scientific institutions.

This, combined with the appointment of a Minister for Cities, and the April 2016 unveiling of the Smart Cities Plan, show some promising and optimistic moves … but time will tell if it these actions and policies will provide the stimulus and resilience for Australia to withstand the current global economic headwinds.

While innovation may lie at the heart of a strong economy, to create innovative, liveable, vibrant, and productive cities, we first need to solve the challenge of infrastructure provision.

It’s estimated that globally $57 trillion of new infrastructure will be needed by 2030 as populations shift to urban areas. This need is no less acute in Australia where decades of political dysfunction have resulted in an infrastructure shortfall. Australia ranks 18th in world infrastructure competitiveness, behind New Zealand, Ireland, Germany, Canada and the US, according to the IMD’s scorecard.

“What will our cities look like in 50 or 100 years’ time? Will they be high tech hubs of innovation and ideas, centres of culture and the arts, places overflowing with parks, playgrounds and potential? Or will they be dystopias crippled with crime and pollution?”

-Romilly Madew CEO, Green Building Council of Australia.

“The decisions made now will have impact for decades to come. We need cities that are living hotbeds of innovation – the engineering profession will be integral in achieving high quality outcomes and enabling our cities to become the new drivers of Australian prosperity.”

-David Singleton Chair of EA College of Leadership and Management.

Engineers Australia College of Leadership and Management’s ‘Shaping Australia’s future: economy, society and place’ series explored how clever solutions and transformational engineering - in collaboration with health practitioners, scientists and all manner of other professionals - can reinvent neighbourhoods and create smart cities that are globally competitive and which maintain a high standard of living for our burgeoning population.

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Engineers Australia | College of Leadership & Management

Key Issues Reinventing neighbourhoods – people & place (Amanda Steele, Lucinda Hartley and Jenelle Provost) Amanda Steele (Head of Sustainability, CBRE): “Engineers will be crucial to achieving cities that are walkable, rich in biodiversity and that can generate food. Cities that are truly innovative with distributed energy solutions, renewable power sources, recycled water and waste bio-digesters.

“It comes back to the idea of place making … creating a place and thinking about development beyond the buildings … We’re pretty unprepared for that I think and we don’t see many great examples of it. It’s not just how you build a block, it’s how that block connects to the community around.

“It’s not just about the vision, it’s about involving people in the story and how they will contribute to the future that will get the millennials and other generations backing big infrastructure shifts that we need for the future.”

Lucinda Hartley (Co-Founder, CoDesign Studio)): “People have ideas for improving their neighbourhood, but getting things done is really hard. In Australia we have an epidemic of social isolation which is linked to the built environment, we don’t design for human behaviour – we get more options to personalise our cars or our coffee than we do our apartment.

“When it comes to understanding behaviour, urban designers make a lot of assumptions and borrow ideas, the risk is places start to look the same … how do we create more resilient places?

We need to better connect people to place and this can be achieved through more collaborative processes for shaping neighbourhoods.

“New opportunities are emerging ... we are still building large format office buildings for jobs that likely won’t exist in 20 years ... we need to create flexible spaces and well connected local environments (for example with high-speed internet) that will support that growth and change.”

Jenelle Provost (General Manager of Elizabeth Quay, WA): “We put one million people as our visitor target for Elizabeth Quay in the first year and after 16 days we had 720,000 people through the place... we built the garden before we built the house and its success so far is largely down to it’s accessibility, and the creation of opportunities for people to do a variety of activities - to use the public realm, enjoy themselves and understand the value of coming together as a collective, as a community, feeling secure and feeling connected.

“This level of interest tells us about the appetite of the general population for infrastructure, and also what is missing in the intersection between technology and people ... it gives people an opportunity to go out, have a great time and it’s that intangible benefit that is difficult to measure… the social return on investment is difficult to quantify…but over time, Elizabeth Quay will be part of life because we put people at the center of every decision we made.

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Engineers Australia | College of Leadership & Management

Key Issues Smart cities and the role of technology (Alison Rowe and Jürgen Schneider) Alison Rowe (Former Global Executive Director Sustainability, Fujitsu Limited): “There is a massive movement driving people towards cities, which presents major challenges… high cost of living, increased pollution, increased need for energy, water and oil, increased crime rates, potential cultural clashes, increased need for infrastructure - USD$10 trillion by 2025, increased data… the list goes on.

“In 2020, 50 billion devices will be connected via the internet, so this movement of people towards cities also presents major opportunities for Information and Communication Technologies (ICT)…. We could see: 20% drop in global emissions, 30% increase in crop yields, a 300 trillion litre decrease of water consumption, decrease of 25 billion barrels of oil… ICT opportunities could generate $11 trillion in revenue.”

Jurgen Schneider (Head of Market Development for Pacific Siemens Ltd, Australia) “Australia just reached a population of 24 million, 17 years ahead of time… 89% live in cities … if you look at what’s happening in cities, we used to just ‘build stuff, then we moved into some cleverness, building automation, gradually linking things together, linking infrastructure outside of the building together and now heading into the next stage where everything is linked together.

There are some 23 billion internet connected devices which are all starting to talk to each other.. traffic talking to a building, interconnection of road, rail utilities etc, we are heading towards very intelligent, smart, interconnected infrastructure.

“We must work with cities to capture all the data relevant for cities… traffic, water, electricity, people movement information… we must collect and collate all of that to make decisions out of it, especially to inform policy decisions and set political agendas.

“Adelaide is the first global city with a carbon neutral declaration substantiated by facts and process… they are using a program that takes all that data and gives around 70 levers people can apply, varying from automated vehicles, double glazed windows, the contribution to carbon reduction and how many jobs it generates. If you go green you don’t kill jobs!

“There are cost benefits and social benefits ... it’s a new collaboration model, it’s not the linear sequential business plan, it’s a whole lot of interaction with a collaborative effort by lots of people.”

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Engineers Australia | College of Leadership & Management

Key Issues How we will build our future (Peter Bowtell and Andrew Harris) Andrew T. Harris (Director, Engineering Excellence Group, Laing O’Rourke): “The construction industry is the last great undisrupted sector, we are responsible for ~10% of GDP, ~20% of peak employment for 19-25 year olds, we still build buildings out of bricks, 5000 years after they were invented by the people who built the pyramids. We are ripe for disruption.”

“Taking a walk into the future, we will see the following as business as usual: digital modelling, applying different delivery methodologies, next generation manufacturing technology (e.g. 3D printing building components), intelligent assets.”

“How do you build the future? You need a big picture strategy of vision that people can buy into, you need an implementation plan that underpins that and then you’ve got to actually do it. And then you need to over communicate and there are multiple channels to do that.”

“What is it that needs to shift for the industry to leap into this space? It will be an external force that shifts our industry. We are an industry focused on killing risk … Risk is the natural enemy of innovation … the perpetual cycle that exists… this will manifest in the future we will be disrupted from outside the industry… people who are not inside the woods looking at the trees will see the larger opportunity and they will start to come in ... we are already seeing nibbles from all over the place.”

Peter Bowtell (Principal, Arup Australasia): “80% of the infrastructure Australia needs is already here, so how can we make it work better?

We need to invest in innovation, growing skills, education, growing capacity collectively as a community if we are to compete globally.”

“Australia needs to get outside of its geographical boundaries and be informed by technological, social and environmental inspiration happening all over the world… it’s only a matter of time before projects like these become the norm rather than the exception: • Energy harvesting road surface prototype (Buffalo NY): This surfacing mat contains a pressurised fluid surrounding mechanical levers; as vehicles drive over the mat, the levers are actuated by the moving fluid, generating electrical energy.

• Netherlands solar roadways (Krommenie, Netherlands): This pilot project covered a 70m bicycle path with durable, modular photovoltaic panels; the trial yielded impressive energy efficiency, paving the way for widespread adoption of the technology.”

“Digital disruption – designing in one digital model means data can be captured through the life cycle in one place ... the data cycle has to be preserved: Tokyo Water pipeline leak detection model (Tokyo, Japan): This leakage prevention and maintenance model has allowed Tokyo to more than halve its systemic water loss within 10 years, while reducing leakage rates from 20% to 3.6% since 1950.”

“We must eliminate waste from construction: Self healing bacteriological concrete (Delft, Netherlands): This developmental material embeds capsules of calcium-producing bacteria within building concrete; as cracks develop, the bacteria produce calcite, sealing off cracked areas and preventing leakage • Our future labour force is being reimagined: Robotically 3D printed pedestrian bridge (Amsterdam, Netherlands): This functional, loadbearing pedestrian bridge will be 3D printed in place using six-axis industrial robots; the extruders will each start from separate riverbanks and meet in the middle.”

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Engineers Australia | College of Leadership & Management

Key Issues How can we finance it?

(John Pickhaver and Jim Miller) John Pickhaver (Executive Director, Co-Head of Infrastructure, Utilities & Renewables, ANZ, Macquarie Capital): “The financial focus is moving from mining to cities.

“Investors are looking to invest but the opportunities just aren’t there. Infrastructure construction activity is falling, the mining investment reduction has not been replaced with other infrastructure construction...

States’ balance sheets are challenged, but these challenges are being addressed… Many states are clearing the way for an increase in infrastructure by recycling capital from operating assets into new assets investment in infrastructure by recycling capital from operating assets into new assets.

“People want to work together - they want to collaborate and socialise in a city / urban environment and that is driving a lot of the demand and need for infrastructure in our cities ... it’s things like development of housing and commercial space around transport hubs … a theme we are seeing is not just governments saying ‘build me a road or an airport’, but what goes with that… we are seeing a lot of hybrid models where there is property, development, residential, social housing an private financing.

“From a private financing perspective, the mindset has changed… investors are happy to be measured on service delivery, outcomes, what people are using that infrastructure for and how they are using it.

“Where will the money come from? Australian superannuation has a strong growth of net inflows and is forecast to double in the next decade …

Superannuation has around $2 trillion and investing that into infrastructure has become attractive for super funds. Increasing allocation and capital available for infrastructure assets … and capital is available at historic low rates … Market conditions, liquidity and competition for assets driving cost of debt and equity capital.

“People are looking for more opportunities to invest and so the opportunity now for those who deliver projects is to take advantage of that. All projects where we might not have thought private investors would have been interested 5 or 10 years ago, are now absolutely in the mindset for people to invest in today.

“Given all the technological change and the need for building infrastructure in our cities, the availability of private capital to do that is at an all time high, and the cost of that capital is at an all time low.

“What will it take to unlock this capital and what is the role of government? When we think of city building projects (such as a new station at Waterloo, Sydney, to encourage residential housing and commercial development in that industrial part of the city), there is no reason why private capital can’t be the largest contributor to spending the money and investing into projects. The government should put the governance in place and the policy framework around it and delivery at the top level that provides the opportunity for that private capital to come to bare.”

Jim Miller (Head of Infrastructure, Utilities & Renewables,Australia & NZ – Macquarie Capital): “How can the value of a project be captured? The simple answer is to develop a planning envelope around the infrastructure. If you are building a railway station, the planning for contiguous development around the station should occur at the same time.

Let’s front end that and say, we think that you can have this kind of residential, this kind of commercial, put height restrictions, set back restrictions actually think through an envelope.

“The challenge is to make plans more relevant and more engaging and therefore more acceptable on the political side, making sure that those projects are actually coming through so that politicians are discouraged from making politically expedient choices.”

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Engineers Australia | College of Leadership & Management

What’s next?

By David Singleton Chairman, College of Leadership and Management This event showed how engineers and the engineering profession can contribute to this debate around Australia’s future. The College of Leadership and Management will continue to to play its part by providing opportunities for engineers to have their voice heard. We will prioritise ongoing engagement with divisional CLM branches and the design of pathways for membership of the college by technical groups.

Engineers Australia College of Leadership and Management is EA’s ninth professional College, and is a home for those engineers whose career has moved into leadership of businesses and key technical disciplines and management of major projects. The College provides for the professional development of members and recognise competence through the granting of grades of membership.

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Engineers Australia | College of Leadership & Management

Upcoming College of Leadership and Management events Engineers Australia’s National Conference, Brisbane, 23-25 November 2016 will bring together leaders from around the country to tackle the critical challenges and opportunities facing Australia, with conversations on leadership, transport, infrastructure, defence and energy. The College is a key contributor to the organisation of this conference.

Visit the College of Leadership and Management https://www.engineersaustralia.org.au/college-leadership-and-management

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