Global Design: The Architect’s Dilemma

Posted: September 2nd, 2009 | Author: Scott Simpson | Filed under: Economy, Professional practice | Tags: , , , | No Comments »

While the recession still rages in the A/E/C industry, there is a bright spot, which is the amount of international work currently being undertaken by U.S.-based design firms. Over the past 10 years, the fee volume of overseas projects has grown by a compound rate of 30 percent per year.  More than $1.5 billion in design fees are now earned on foreign projects, and for some firms this can be as high as 30 percent to 40 percent of their total revenue. International contracts greatly extend the influence of U.S.-based architects, providing unique opportunities for collaboration and outsourcing, but there is a hidden cost that poses a significant long-term challenge to the health of the profession.

When working overseas, most architects typically provide only the SD and DD services, with local firms handling the CD and CA phases.  Since SD and DD generally represent only 35 percent of the A/E typical fee, this means that the vast majority of the fee volume (65 percent) is reserved for foreign firms, which can often provide those same services at a much lower cost. It follows that an office which is heavily dependent on international work will experience a significant shift in the need for talent — more designers and fewer technical staff. Over time, architects who concentrate primarily on overseas work could well see their technical capability severely eroded. To compound the problem, those doing foreign work often rely on outsourcing to produce models, renderings, and even some of the design documentation.

Over time, the implications hold significant long-term dangers for the profession. The CD/CA process has traditionally been fertile ground for training new staff. Where else will newly-minted graduates learn the nuts and bolts that are necessary to complete their training? How will they get this experience if CD/CA is not done in their offices? Furthermore, if architects concentrate only on the up-front design at the expense of CD/CA, they risk morphing into graphic designers (concerned primarily with aesthetics) and will gradually forfeit their claim to providing responsible control over the documentation process as well as protecting the health, safety, and welfare of the public. This is the very foundation of licensure.

This trend bears close watching. A cautionary tale is provided by Clayton Christensen in his book The Innovator’s Dilemma, in which he recounts the fundamental changes in the steel industry that were brought about by the advent of “mini-mills” several decades ago.  In the beginning, overseas producers took on the high-volume, low-margin business, while the high-end, technically sophisticated steel was still rolled in the United States. However, in the course of only a few years, the overseas mills became much more innovative, efficient, and productive, eventually supplanting all of the major U.S.-based producers. Now most of our structural steel is imported rather than exported, with a corresponding decline in our asset and knowledge base.

Could this be the future of the design profession? Only time will tell. In the meantime, firms that are tempted to take on too much international work should carefully balance their portfolios with domestic projects that offer opportunities to provide a full range of professional services, especially CD and CA. International work can be exotic and even intoxicating, but it cannot be the whole meal. Like a healthy body, a healthy firm requires a balanced diet.