Global demand lifts revenues of Dutch water sector to €21.3 billion

17 August 2016 Consultancy.uk

The Dutch Water sector has, over a period of four years, seen its revenues increase by 10% to €21.3 billion. Most revenues are generated in the maritime subsector, which accounts for about 58% of the total turnover of the water sector, followed by the delta subsector (27%). The industry, which is being lifted by international demand, provides jobs to around 86,000 people.

Water stands at the heart of a range of global needs, ranging from the need for drinking water and water for sanitary purposes, but also a range of global challenges such as urbanisation, food (to accommodate for population growth) and climate change.

Historically, the Netherlands, a country in Western Europe with a population of around 17 million, has had a long and complex relationship with water. Large tracts of the country are ‘polders’ (reclaimed land below surrounding water levels), with human ingenuity, engineering feats and constant vigilance holding back the waves from the reclaimed land. Building on the connection, the Dutch have over the past decades grown into one of the globe’s leaders in water expertise, and today the country’s experts in the field not only keeps themselves busy with solving their own intricate water challenges, but they are also increasingly taking the stage as an advisor on water matters to governments, corporates and institutions across the globe.

Revenue of the Dutch water sector

According to recent data from Ecorys, an international consulting firm, the Dutch water sector has seen solid growth in recent years. An analysis on the latest data available (2014) shows that the industry has hit a turnover of more than € 21 billion, about 10% more than in 2010. Around €7 billion stems from the export of knowledge and services to clients abroad – here too considerable growth has been realised compared to 2010. According to the data, if the turnover of foreign-based workers (managed from the Netherlands) is included in the numbers, then the amount exported would approximately double.

With a value of €21.3 billion the water sector holds a mid-table position in the output of the Netherlands, yet it is described as one of “the most important” sectors by the researchers, as it has a strong coordinating role in various economic and social issues.

Revenue of the Dutch water sector - per cluster

The maritime subsector accounts for the largest chunk of revenue, at €12.3 billion (~ 58% of the total water sector), of which around 36% comes from exports. The second biggest subsector, in terms of turnover, is delta, accounting for €5.8 billion in revenues (~27%), of which exports represent 38%. The water subsector’s revenue account for €3.2 billion, around 15% of the total, of which 13% of the turnover comes from international clients.

Labour market of the Dutch water sector

The data further reveals that the industry employs around 86,000 professionals, which represents more than 79,000 FTEs. Most are employed in the maritime subsector, which in turn consists of several industries such as boat building / marine industry, inland shipping, shipbuilding, ports, marine, engineering, marine, offshore and fishing. A good sign, related to the relative strength of the market, is that over 80% of workers in the subsector hold a permanent contract, which in turn provides a relatively large contribution to gross value added. According to provisional data for 2015, employment in the maritime sector grew by 710 jobs last year, a slight increase of just under 1% compared to the year previous.

Dutch water sector - Revenue vs Labour market

The researchers conclude that the Dutch water sector is performing well and that several companies in the industry are market leaders, especially in the subsectors of engineering (e.g. Arcadis, Fugro, Royal HaskoningDHV) and designing and building superyachts (e.g. Royal Huisman, Vitters Shipyard). 

Looking ahead, Hans Huis in 't Veld, the main spokesperson for the sector’s key working group (known as ‘Topsector Water’ in the Netherlands), says that the Dutch still face an enormous potential to expand their international footprint in the market. “There is high demand for new technologies to purify water on an ecological basis, to generate sustainable energy, to build floating solutions, or develop environmental solutions for water security, among others. Our goal is to get water issues on the political agenda.”

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Project management industry adds £156 billion of value to UK economy

15 April 2019 Consultancy.uk

Project management has grown into one of UK’s largest areas of business over the past decade, amid the increasing ‘projectification’ of work. With the gross value added to the UK economy by project management estimated to be £156 billion, this trend is likely to continue in the coming era.

Despite the huge success of project management in recent years, until now there has been relatively little data available on the size of project activity. As a result, there has been a great deal of debate on things like the number of people involved in the sector, the number of projects, and how it contributes to economic output. Due to this need for clarity, APM, the UK’s professional body for project management (the largest organisation of its kind in Europe, with 28,000 individual members) commissioned economists from PwC to shed light on the industry's economic impact.

The research concluded that the profession makes a more significant contribution to the UK economy than the financial services sector. 2.13 million full-time equivalent workers (FTEs) were employed in the UK project management sector, generating £156.5 billion of annual gross value added (GVA). In comparison, the financial services sector contributes £115 billion, and the construction industry adds £113 billion.

Gross value added to UK economy

Commenting on the discovery, Debbie Dore, Chief Executive of APM said, “Project management runs as a ‘golden thread’ through businesses, helping to develop new services, driving strategic change and sector-wide reform.”

Who is a ‘project manager’?

To reach these estimates, PwC’s researchers used detailed models to map out the value of project management activity. They ultimately defined relevant ‘projects’ as “temporary, non-routine endeavours or rolling programmes of change designed to produce a distinct product, service or end result… [with] a defined beginning and end, a specific scope, a ring-fenced budget, [and] an identified and potentially dedicated team with a project manager in charge.”

Building on this, they then went on to define what the act of project management actually is. The job consists of applying “processes, methods, knowledge, skills and experience” so that clients can meet their objectives and bring about planned outputs or outcomes. The analysts added that this includes “initiating the project, planning, executing, controlling, quality assuring and closing the work of an identified and dedicated team according to a specified budget and timeframe.”

Importantly, it should be noted that the profession is not exclusive to only roles explicitly labelled as ‘project manager’, but to any role where specialist project management skills are used. This means that across sectors these roles can have very different titles, from the self-explanatory contract managers of procurement, or the campaign managers of advertising, to the likes of festival co-ordinators in the events sector, and many more. The roles in question also span all strategic levels of the profession, from strategic to tactical and operational positions.

Gross value added of project management profession

From a sector perspective, the financial and professional services, construction and healthcare industries make up almost two-thirds of the total project management GVA. At the same time, understandably, the UK Government has a huge project portfolio, which further drives the size of the GVA the sector contributes, thanks to megaprojects like HS2 and Crossrail.

Commenting on this to the report’s authors, Oliver Dowden, Minister for Implementation remarked, “Project delivery is at the heart of all Government activity, whether it’s building roads and rail, strengthening our armed forces, modernising IT or transforming the way government provides public services to citizens. Getting these projects right is essential if we are to ensure that we build a country that works for everyone.”

Throughout 2019, 26 major government projects were delivered, representing a fifth of the overall Government Major Projects Portfolio (GMPP) of 133 projects. According to the IPA annual report 2017-18, these represented a whole life cost of £423 billion. In addition to this were a plethora of smaller scale projects, and those in early development.

Elsewhere, with the increasing digitalisation of the economy impacting entities of all shapes and sizes, IT and digital transformations tended to dominate the projects of the UK scene alongside new product development projects, with a respective 55% and 46% of organisations in the research sample having undertaken these types of project in the past year. At the same time, this varied across sectors, and unsurprisingly, in the construction and local government sectors, fixed capital projects were the main project type undertaken.

Outlook

Looking to the future, 40% of business leaders expect project management will grow in the coming years due to the increased use of projects – or the ‘projectification’ of the UK. In a trend that has been witnessed elsewhere, organisations have to rapidly and continuously change in the digital age of business, driving the need for project management.

Outlook for project management services

An increased focus on value over cost – especially in the construction sector – and a forecast increase in the number of international projects are predicted to be key drivers of growth, according to the expert contributors. However, this will not happen in the absence of challenges; more than half of organisations expressed concern over the perceived impact of political uncertainty in the UK. Skills and capability shortages were also cited as a potential barrier by a third of organisations.

With regard to budgets, meanwhile, a third of those surveyed by PwC said they expect the size of project budgets will increase in the coming three years, while 40% anticipate a growth in project size. As the profession continues to mature, and as the recognition of the importance of good project management grows, it is expected that a greater proportion of project work will gain more distinct attribution to the profession itself, giving more recognition and appreciation to the role of the project manager.

Speaking on the findings of the study, Sandie Grimshaw, a Partner at PwC, concluded, “The project management profession is relatively new compared to some other professions, such as lawyers, teachers and doctors. However, as project management is a core competence vital to organisations in the UK, the profession is critical and will continue to grow in stature.”