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GBlist: comments on housing costs (Mathis, Kadulski)




Mathis comments that > 1% R&D would be desired for construction industry. 

I have seen numbers like 0.045% as the R&D investment rate which is very
paltry.  Considering other sectors of the economy like drugs, which
invest heavily in R&D.  Pfizer and Bristol-Meyers Squib both exceed 3%
annually according to reports.  Lilly and J&J have had R&D budgets as
high as 5%/yr. according to Wall St. Journal -- or 100 TIMES AS HIGH !!

Another problem has been historical failure to translate and effectively
transfer results to users.  Tech transfer often is the last and easily
dispatched item in the budget for R&D -- at least that done with any
federal funding.  Better tech transfer can not occur with regurgitating
resaerch papers; it needs demonstration, application, training, monitoring
and a whole host of support from both private and public sources.

Why?
Because the construction industry is very fragmented and diffuse, and
therefore there is a preverse incentive to cloister results, and to
"go with the flow."  I have observed builders are mainly followers, and
since they are risk averse, the diffusion of innovation is slowed.

So the risk takers however few, need to carefully align their interests
with professional groups that do not want to hinder progress, and that
do not fear change.  One way to spread risk would be to establish a
"Building Innovations Risk Bond Fund" that would encourage investment
in new technology by providing an "insurance" pool to help remediate failures 
that innevitably come with the "learning curve" of innovation.  
Such a program could be operated as a not-for-profit foundation.

How about it?  This could be a helpful policy, and even fundable...

---------------
On Thu, 28 Aug 1997, RCMathis1@aol.com wrote:
>Richard Kadulski wrote:
>
><< I think we also have to recognize that there is a reason why the 
> construction industry is so conservative: namely, the implications of a 
> screw-up are horrendous, and not many people can afford to cover up their 
> mistakes or research.  Unlike other industrial activities, where generally 
> there is a full scale research program, so when a product is launched, it 
> will have been tested in many different ways, it doesn't happen in housing. 
> Each building, in effect, is a prototype.>>
>
>The building industry has long suffered from an absence of RESEARCH (beyond
>the old "we've always done it this way and it has worked" justification for a
>particular habit or system.)  As smart as we are, we are still learning BASIC
>PHYSICS about house systems.... moisture migration, pressure regimes,
>structural systems, thermal envelope interactions, orientation dynamics, etc.
> We could take a few lessons from Microsoft, Intel and even the auto industry
>by encouraging significant (>1%) annual R&D "investment" into building
>science research and education.  The building inductry spends dramatically
>less than that each year on its future... no wonder we have wet basements and
>leaky roofs and cracked drywall and.... 
> 
> <<If a builder uses a new product or system, if it doesn't work out, he's
>the 
> one that gets an angry call in the middle of the night to fix it 
> immediately, and then may be saddled with a law suit to boot! The supplier 
> is not always there to help him out either. The innovators don't get the 
> full respect. That's why the tendency is to do what's been done in the past 
> and by everyone in the industry, even if that means repeating past mistakes 
> - but at least he can say that it's "the industry standard".>>
>
>"Industry Standard" can strike fear into the hearts of the bravest
>innovator...  We must move to "standards" that are appropriate for the
>building, system, climate and occupants.... not just what the "industry" has
>always produced or what is in vogue today...   Industry is full of innovators
>and companies looking for product and market differentiation.... if we ask
>for it, with appropriate STANDARDS, odds are that it will be delivered by
>someone...
>
>Too optimistic?
>Chris Mathis
>MCSquared

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