Formative scenario analysis of the factors influencing the adoption of industrialised construction in countries with high housing demand – the cases of Ethiopia, Kenya, and South Africa

Figures & data

Figure 1. Methodological steps in the Formative Scenario Analysis (FSA). Adapted from (Scholz and Tietje 2002).

The seven main steps taken in this study are listed on the left and associated with their respective sub-steps with arrows. On the right, the outputs from this study are listed and associated with the steps with arrows.

Table 1. List of experts that participated in the study.

Interviews	Expertise	Stakeholder group	Country
1	CEO	IC company	Ethiopia
2	Product engineer	IC company	Ethiopia
3	Deputy manager	IC company	Ethiopia
4	CEO	Architect	Ethiopia
5	Architect and project lead	Real estate developer	Ethiopia
6	Office engineer	Real estate developer	Ethiopia
7	Construction engineer	Real estate developer	Ethiopia
8	Block manufacturer	Supplier	Ethiopia
9	Construction engineer	Real estate developer	Ethiopia
10	Engineer and design	Consultant	Ethiopia
11	Alternative building technology expert	Consultant	Ethiopia
12	Policies and building codes expert	Government housing agency	Ethiopia
13	Project manager	Real estate developer	Kenya
14	Architecture and construction	Academic	Kenya
15	Architecture and affordable housing	Academic	Kenya
16	Construction economics and management	Academic	Kenya
17	Land and construction policy and economics	Academic	Kenya
18	Quantity survey	Academic	Kenya
19	Engineering and design consultant	Consultant	Kenya
20	Sales administrator	IC company	Kenya
21	Technical representative	IC company	Kenya
22	Engineer	IC company	Kenya
23	Engineer	IC company	Kenya
24	Technical representative	IC company	Kenya
25	Structural engineer	IC company	Kenya
26	Sustainability in construction	Consultant	South Africa
27	Engineering and design	Consultant	South Africa
28	Director	Real estate developer	South Africa
29	Affordable housing	Architect	South Africa
30	Construction engineering and management	Academic	South Africa
31	Manager	IC company	South Africa
32	Technical manager	IC company	South Africa
33	CEO	IC company	South Africa
34	CEO	IC company	South Africa
35	Quality control expert	IC company	South Africa
36	Project management	Government housing agency	South Africa

Table 2. Consistency ratings $c(d_i^l,d_j^l).$

Consistency rating of two future values of factors	Definition
-1 (Inconsistent)	The occurrence of one future level would make the occurrence of the other impossible.
0 (Co-existent)	The occurrence of one future level would not affect the occurrence of the other.
1 (Supporting)	The occurrence of one future level would support the occurrence of the other.
2 (Conditional)	The occurrence of one future level would require or cause the occurrence of the other.

Figure 2. The scenario selection process.

The scenario selection process is shown as a chain of events with two main boxes. The first box is titled the bottom-up approach and shows three main steps taken to filter scenarios. The second box is titled the top-down approach and shows one major step taken to select the three scenarios.

Table 3. The decisive set of industrialised construction adoption factors identified.

Factors	Definition
Product performance
1. Quality of products	The quality of industrialised products compared to conventional products during the use and maintenance phases of a building. Improvements in industrialised products’ quality can benefit the adoption of IC through an increase in positive perception of customers and government agencies.
2. Time of construction	The time required to plan, produce and install industrialised products on-site compared to conventional methods. The timely delivery of industrialised products benefits IC adoption as demand for housing is very high.
3. Product price	The price of industrialised products compared with conventional products. Achieving a suitable price point is crucial for the adoption of IC in developing economies.
4. Product design flexibility	The degree of customisation a client has with industrialised products. Increased design flexibility in industrialised products increases the interest of the customer.
5. Material efficiency	The lifecycle savings of primary and supporting materials such as using less formwork through industrialised methods. Increasing material efficiency helps decrease unintentional price and environmental impact increases in products.
State of industry
6. Manufacturing capability	The capability to transform materials into new products using machines and human capital often through factory facilities. IC is generally categorised under manufacturing when the majority of trades are done off-site (ISIC 2008). Hence increased manufacturing capability in a country benefits the adoption of IC.
7. Market share of industrialised products	The proportion of products executed using industrialised methods compared with conventional ones. An increase in the amount of products delivered through industrialised methods benefits the adoption of IC through economies of scale.
8. Skilled craft supply	The availability of skilled craft labour such as carpenters and masonry workers. The availability of skilled craft supply facilitates the increase in the quality of industrialised products.
9. Safety	The safety of construction workers throughout the construction process. Increased safety of workers through industrialised methods promotes the adoption of IC.
State of country
10. Condition of infrastructure	The availability of functioning infrastructure such as quality roads, water supply networks, and electricity networks. How well such infrastructure works is a crucial factor to set up and run IC companies.
11. Housing demand	The demand for housing expresses the gap between the amount of housing needed by users and the amount of housing supplied. High levels of housing demand in developing economies can expedite the adoption of IC.
12. Trends of densification	The pattern of building dense mid- or high-rise residential buildings. Industrialised methods compete better in mid- or high-rise residential building projects. Activities such as hoisting materials and elements in these projects are well-matched with industrialised methods than conventional methods.
State of market/economy
13. Unemployment rate	The number of people seeking work in the country. Industrialised methods can be perceived as taking away jobs in developing economies where there are high unemployment rate numbers.
14. Initial cost to set up an industrialised construction company	The cost of establishing an IC company, including expenditures on employee training. In developing economies, high initial costs to set up an IC company can be a hindering factor to adopt IC.
15. Skilled knowledge workers supply	The supply of workers with technical and professional skills to work with complex systems and technology. The availability of skilled knowledge workers increases the use of digital design and construction tools in delivering housing products through industrialised methods.
16. Investment	The investment from public or private sources going towards infrastructures such as roads, water, and energy. Increased investment increases the conditions of infrastructure and manufacturing capacity. This will promote the adoption of IC.
Policies and regulations
17. Incentives from the government for industrialised products	The commitment of government agencies to promote and incentivize the use of industrialised products. Incentives can be monetary or quotas that require the use of industrialised products in housing projects.
18. Availability of building codes for industrialised products	The availability and specificity of local building codes for industrialised products. The availability of sufficient and performance-based building codes can simplify the process of putting industrialised products on the market.
Society
19. Perception of industrialised products by the end consumer	The opinion of end-users on the quality and desirability of industrialised products in the market. This is especially important in developing economies where industrialised products are novel and need to have a good first impression.

Figure 3. System graph of factors.

The relationship between the 19 factors is shown using two types of lines. The first type of line represents a strong relationship, and the second a lighter relationship between the factors. Each of the 19 factors is listed twice to show the impact other factors have on it and its impact on others.

Figure 4. System grid of factors.

The 19 factors are plotted in a grid format. There are four sections in the grid labelled active, passive, buffering, and ambivalent. The 19 factors are shown in the quadrant they belong.

Table 4. Current and future values of factors.

No. factors	Measurements and current value (2019–2021)	Potential future values (2030)
		d	Values
1. Quality of products (−1 to 1)	Measured using expert opinion in comparison to similar conventional products. The current quality of industrialised products is rated 0.83 (industrialised products provide better quality than conventional construction products).^a	$d_i^l(l=1)$	0.94 (much better)^a
		$d_i^l(l=2)$	0.2 (worse)
		$d_i^l(l=3)$	0.6 (slightly better)
2.Time of construction (−1 to 1)	Measured using expert opinion in comparison to conventional construction. The current time performance of IC is rated 0.78 (industrialised products require less time than conventional construction).^a	$d_i^l(l=1)$	0.9 (much less time needed)^a
		$d_i^l(l=2)$	0.2 (more time needed)
		$d_i^l(l=3)$	0.6 (slightly less time needed)
3.Product price (−1 to 1)	Measured using expert opinion in comparison to conventional product price. Current value for product price is rated 0.34 (industrialised products are slightly more expensive than conventional construction products).^a	$d_i^l(l=1)$	0.78 (cheaper)^a
		$d_i^l(l=2)$	0.2 (more expensive)
		$d_i^l(l=3)$	1 (much cheaper)
4. Design flexibility (−1 to 1)	Measured using expert opinion in comparison to design flexibility in conventional construction. The current design flexibility of industrialised products is rated 0.4 (industrialised products offer slightly less design flexibility than conventional construction).^a	$d_i^l(l=1)$	0.72 (more flexibility)^a
		$d_i^l(l=2)$	0.2 (less flexibility)
		$d_i^l(l=3)$	1 (much more flexibility)
5. Manufacturing capability (Dollar output/year)	Measured by the annual manufacturing output in dollars. In 2020 the average manufacturing value-added in the three countries was $ 47 billion.^b	$d_i^l(l=1)$	$ 71 billion (1.5x more)
		$d_i^l(l=2)$	$ 190 billion (4x more)
		$d_i^l(l=3)$	$ 60 billion (improves slightly)
6. Market share of industrialised products (0–1)	Measured using expert opinion on a qualitative scale. Experts rate the current market share of industrialised products to be at 0.21 (The overall market share of industrialised products is very low).^a	$d_i^l(l=1)$	0.34 (less than in comparable places)^a
		$d_i^l(l=2)$	0.60 (good enough)
		$d_i^l(l=3)$	0.80 (more than in comparable places)
7. Skilled labour supply (0–1)	Measured by the Human Capital Index (HCI). The HCI is defined as “the productivity as a future worker of a child born today relative to the benchmark of full health and complete education”. The HCI score ranges from zero to one. The current HCI for the three countries is 0.45.^c	$d_i^l(l=1)$	HCI 0.59 (equivalent to East Asia and Pacific)^c
		$d_i^l(l=2)$	HCI 0.5 (slight increase)
		$d_i^l(l=3)$	HCI 0.69 (equivalent to Europe and Central Asia)^d
8. Condition of infrastructure (%)	Measured through three separate indicators: Road quality (RQ) (%)^d Access to electricity (AE) (% of population)^e Access to water (AW) (% of population)^f The current condition of infrastructure in these three countries is quantified to be at RQ 55.14^d, AE 68^e, and AW 71.^f	$d_i^l(l=1)$	RQ 60, AE 85, AW 85 (improves significantly)
		$d_i^l(l=2)$	RQ 55.14, AE 68, AW 71(remains the same)^def
		$d_i^l(l=3)$	RQ 64.4, AE 100, AW 99.8 (Europe level)^def
9. Housing demand (housing units)	Measured as the amount of housing backlog. This only accounts for houses that are not delivered to end-users. The average housing backlog in the three countries is estimated at 1.8 million housing units.^g	$d_i^l(l=1)$	1.8 million (remains the same)
		$d_i^l(l=2)$	450,000 (4x less)
		$d_i^l(l=3)$	900,000 (2x less)
10. Unemployment rate (% population)	Measured by the share (%) of the labour force that is without work but available for and seeking employment. The average unemployment rate in the three countries is at 11.7%.^h	$d_i^l(l=1)$	11.7 (remains the same)^h
		$d_i^l(l=2)$	9.1(lowest unemployment rate in 2008)^h
		$d_i^l(l=3)$	13.1 (highest unemployment rate in 2002)^h
11. Investment (Dollar/year)	Measured by the yearly infrastructure investment. The unit of measurement is USD/year. The current value in these countries is 32 billion USD.^i	$d_i^l(l=1)$	$ 52.4 billion^i
		$d_i^l(l=2)$	$ 38.8 billion^i
		$d_i^l(l=3)$	$ 80 billion^i
12. Incentives from the government for industrialised products (0–1)	Measured using expert opinion as the amount of incentives going towards industrialised products. Current incentive presence in the studied countries is rated at 0.14 (very few incentives given).^a	$d_i^l(l=1)$	0.58 (good enough)^a
		$d_i^l(l=2)$	0.40 (less than in comparable places)
		$d_i^l(l=3)$	1 (much more than comparable places)

^aExpert’s opinion in the three countries. For example, experts were asked to rank the quality performance of industrialised products compared to conventional ones. The range included: (−1) for much worse quality performance, (0.6) for better quality, and 1 for much better quality performance. More information available in the supplementary materials section.

^bManufacturing value-added in million Dollar/year, The World Bank.

^cHuman Capital Index, World Bank (2020).

^dQuality of roads, World Economic Forum (2019).

^eThe World Bank (2018).

^fWHO/UNICEF (2015).

^gHousing backlog in African countries (Bah et al. 2018).

^hThe World Bank (2018).

ⁱInfrastructure outlook (2021). $38.8 billion (current prediction) for 2030, $52.4 billion (required to supply infrastructure demand excluding Sustainable Development Goals in the three countries), and $80 billion (required to supply infrastructure demand including Sustainable Development Goals in the three countries).

Table 5. Selected scenarios and future values of factors.

Factors	Selected scenarios – 2030
	Public-private tandem	Slow adoption	Manufacturing-led
1. Quality of products (−1 to 1)	0.6 (slightly better)	0.6 (slightly better)	0.6 (slightly better)
2. Time of construction (−1 to 1)	0.9 (much less time needed)	0.6 (slightly less time needed)	0.6 (slightly less time needed)
3. Product price (−1 to 1)	0.78 (cheaper)	0.2 (more expensive)	0.78 (cheaper)
4. Design flexibility (−1 to 1)	0.72 (more flexibility)	0.2 (less flexibility)	0.72 (more flexibility)
5. Manufacturing capability (Dollar output/year)	$ 71 billion (1.5× more)	$ 60 billion (improves slightly)	$ 190 billion (4× more)
6. Market share of industrialised products (0–1)	0.8 (more than in comparable places)	0.34 (Less than in comparable places)	0.6 (good enough)
7. Skilled labour supply (0–1)	HCI 0.59 (East Asia and pacific)	HCI 0.5 (increases slightly)	HCI 0.69 (Europe and Central Asia)
8. Condition of infrastructure (%)	RQ 64.4, AE 100, AW 99.8 (Europe level)	RQ 55.14, AE 68, AW 71(remains the same)	RQ 60, AE 85, AW 85 (improves significantly)
9. Housing demand (housing units)	450,000 (4× less)	1.8 million (remains the same)	900,000 (2× less)
10. Unemployment rate (% of population)	9.1 (lowest in 2008)	11.7 (remains the same)	9.1 (lowest in 2008)
11. Investment (Dollar/year)	$ 80 billion (required to supply infrastructure demand including Sustainable Development Goals)	$ 38.8 billion (current prediction)	$ 52.4 billion (required to supply infrastructure demand excluding Sustainable Development Goals)
12. Incentives from the government for industrialised products (0–1)	1 (much more than comparable places)	0.40 (less than in comparable places)	0.58 (good enough)

Figure A1. relationship matrix of factors (0=no or very little direct impact, 1= medium direct impact, 2 = high direct impact.)

Factors are listed vertically and horizontally in a tabular form. The intersection point between any two factors is assigned a value indicating the strength of impact unless they are identical.

Figure A2. Consistency matrix of factors.

Factors are listed vertically and horizontally in a tabular form. The potential three future values are listed next to each factor. The intersection point between any two future values is assigned a consistency rating value unless they are identical.

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