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    Architecture’s economic contribution undervalued by $1 billion per year: UTS report

    Nathan Johnson

    A recent research report prepared by the University of Technology Sydney for the NSW Architects Registration Board suggests the value of architectural services to the economy is structurally underreported by around $1 billion per year.

    Prepared by members of the UTS School of Business and School of Architecture, Measuring Up Innovation and the Value Add of Architecture explores ways to measure the contribution of architectural services to the broader economy outside of its role in the construction industry.

    Drawing on research, case study analysis and industry expertise, the report highlights four key areas of innovation in architecture that typically remain unaccounted for in estimations of economic contribution by architects.

    These areas include:

    1. new technology produced and promoted through innovative architectural design and practice;
    2. new businesses, business models and business practices spurred by innovative thinking in design practice;
    3. cultural products (both hard and soft) that derive from architectural practices, as well as the follow-on economic benefits gained from events, exhibitions and tourism;
    4. architectural education as a market sub-sector and the additional benefits (economic and otherwise) of academic research

    TECHNOLOGY AND BUSINESS MODELS FOR EVERYONE

    In terms of value add via technology, the report turned to two Sydney buildings as case studies to demonstrate ways in which the design and implementation of new technologies by architects has stimulated unreported growth in intersecting industries, including manufacturing, construction and real estate.

    Renzo Piano’s innovative louvre system for his Aurora Place project at 88 Phillip Street, Sydney and Frank Gehry’s novel brick design for the new Dr. Chau Chak Wing Building at UTS were used to demonstrate how architects are important consumers and producers of new technology, and to emphasise how these exchanges and transfers must be captured in assessments of architecture’s economic contribution.

    It then moves on to other case studies to demonstrate the ways in which some in the profession are innovating in their business systems and models to meet increasing competition from new major engineering and project management companies and how these developments are leading to spin off businesses and being adopted in other industries.

    The highly sophisticated software programs developed by Gehry Technologies that are now being used in the aerospace, automotive and navigation industries, and the innovative practice structure adopted by New York’s SHOP Architects (which has also spun off three companies) were used to demonstrate the significant impact architect entrepreneurialism has had on the economy across industries.

    WHAT'S ARCHITECTURE REALLY WORTH?

    Arguably the most significant assertion arising from the report however is its estimation of the value architectural tourism brings to Australia, which came in at $827 million annually. The report suggests that while estimating the tourism contribution of significant buildings is an expensive and time consuming process, it should be considered as a way to inform budgets, return on investment, time frames and the contributions governments at all levels are willing to make on the design component of buildings which have the potential to “pull” visitors to an area.

    Using Frank Gehry’s Dr. Chau Chak Wing Building as an example, the report highlights how sophisticated valuing of significant architecture can enable stakeholders to better understand the economic benefits of design driven development. This can translate into estimate the value of investing further in the development of specific buildings and precincts as well as encouraging collaboration across industry sectors in order to better realise direct and indirect benefits.

    It estimated the future yearly value of the Dr. Chau Chak Wing Building to tourism to be in the vicinity of $46 million.

    BROADENING THE SCOPE

    Key to the report is the belief that architecture as a practice is too narrowly defined within the architectural services profile offered by reports linking the profession to the construction industry. The implication, says the report, is that the measure of architectures contribution to the economy is structurally under-reported.

    It suggests that linking the performance of architecture to the construction industry alone ignores the substantial contribution of architecture to the economy through a variety of broader services and contributions.

    “The breadth of these activities is substantial, including connections to information graphics, media, industrial design, manufacturing, hard and soft technology development, human environmental health factors, environmental, cultural and economic sustainability, information architecture, publishing and other forms of cultural production, as well as contributions to the fields of planning, landscape architecture etc.”

    So instead, the authors have generated a broader picture and framework of the value add of architecture that moves beyond the value of single projects and takes an industry-wide perspective of innovation in the architectural profession.

    The report can be downloaded here:

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