Intelligence Report: Globalization

August 10, 2006 · by DesignIntelligence

The following is an overall summary of current and future trends in international marketplace based on the experiences of these top grossing firms.

DesignIntelligence conducted a survey of the top-performing US-based multinational design firms. In addition to statistical information, the editorial staff compiled a survey of the findings as established through the course of the surveys. The following is an overall summary of current and future trends in international marketplace based on the experiences of these top grossing firms.

Domestic Difficulties

For the most part, multinational firms find the experience of working outside the US favorable. But, the maintenance of overseas project is not, as one can imagine, without its problems. Many firms partner with local firms to better gauge the local means, customs, methods, and laws associated with the industry. Respondents noted frustration or acknowledged the challenges associated with construction documentation and the reliance on "working out details in the field." Firms responses suggest that partnering with architects local to projects are the only way to meet budgets and project deadlines and that documentation quite often fails to meet standards established in US practice. In all, a less consumer-oriented approach to architects and their services equates to a higher premium being placed on these services.

Social and cultural issues often beset multinational firms. The establishment of overseas offices, often led by locals rather than expatriate architects, helps reduce the cultural complexities frequently associated with multinational practice. Throughout these shifting and burgeoning economies, design firms wield much influence and, in many nations, carry considerable creative freedom and respect, and the "scale of influence" for one respondent, in regions like India and China is "unprecedented" - if they can navigate the complexity of local taxes, labor laws, currency exchanges and documentation issues.

Green Initiatives

Many areas of Europe are well versed in - and show a strong affinity for - green design. Cities like London have shown a preference for sustainable initiatives well in advance of the US. Increasingly, although perhaps not as prevalent, is the establishment of green design principles in India and China. India boasts a number of LEED certified structures and Indian clients are increasingly seeking out the expertise of firms with established reputations and records of sustainable design.

The global focus of the 2008 "Green Olympics" should do much to heighten the profile of green initiatives in Asia and beyond. For many US-based multinationals, client-focused, sustainable design makes good sense and works consistently across client markets. As in domestic markets, however, some clients are "more receptive than others," when it comes to building green.

Strategic International Partners

Multinational firms invariably partner with local architects, and established architecture and engineering firms in native countries as a means to understanding local customs, techniques, building codes, laws, and how things are done "in the field." Variations in operational techniques are myriad. Partnerships are also commonplace in locations where services aren't typically offered and firms value the experiences local architects and engineers can teach them. Networks of smaller, well-established, preferred firms are commonplace and, in many instances, are the only way to meet budgets and deadlines.

Collaborative tools, like Autodesk's Buzzsaw(r) are vital to addressing the communications challenges inherent in international practice. Overcoming distance and time-zone issues is one benefit of developments in technology. At the same time, just as in domestic markets, technology is decreasing time to market for projects and increasing the expectations of clients regardless of locale. As the communications and distance gaps narrow, so does the time allowed the development of design; native affiliations are requisite in ensuring that design projects can and will be finished in the field and capitalizing on the effectiveness of collaborative, real-time communication tools is vital.

Emerging Trends

As lesser developed nations shift from 20th to 21st century technologies and to more stratified economies, a leveling in the AEC field is occurring. Longer project scopes make the use of local labor less cost-effective while smaller firms are finding it easier to maneuver into markets of expertise. Entry into international markets is becoming more cost-effective and accessible for firms across continents. And, just as US firms look beyond their own borders for client relationships abroad, foreign firms seek opportunities in markets in the US; collaboration may be one emerging key to firm survival.

Cultural and technological advances are creating a demand for higher quality materials and methods. Talent is increasingly at a premium as the demand for "high-end" architecture and design excellence at home and abroad continues. In contrast to more commercially oriented domestic clients, multinational firms are experiencing an increased desire for innovation and new approaches to design. Market trends will continue to ebb and flow as they do domestically, but with a decreased intensity. Thought leadership will mark firms of distinction abroad, and civic-minded international clients will focus more on mixed-use projects and the social value of architecture. Tremendous opportunities abound for existing multinational firms to shape the future of developments, and for smaller firms to maneuver through a dynamic and leveling design field.

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