The challenge
Almost all players in the Real Estate and Construction industry struggle with problems related to managing service providers and multi level supply chains. This applies to both domestic and foreign providers.
The main problems are
- grey economy and organised crime
- social dumping i.e. mistreatment of workers rights
- fraud related to proof of competence, employment, posting, etc
- insurance fraud
- security misconduct and theft
Solution and results
The real estate and construction federations in Finland issued the creation of a holistic system for addressing this issue in 2007 following a legislation concerning buyers liabilities when contracting service work. The system has now been running for 10 years and the results are evident:
1) The Finnish Ministry for economic affairs and employment conducted a study whereby it concluded that the Tilaajavastuu.fi service saves 30 min per contract to execute the contractors liability check. When we produce around 10 Million reports per annum the savings, for companies abiding by this legislation and using the system, are around 40 M€.
2) The Finnish tax authorities conducted a survey where they concluded that the City of Helsinki of Helsinki under a 5 year period was able to reduce their contribution to grey economy by from 50 % (from 10 % to 5 %). When Helsinki has over 10 000 suppliers and the budget of a capital, this improvement is significant. This significant result was achieved partly adopting the Tilaajavastuu.fi system in the whole group.
3) An independent survey by Owal group concluded that the authority reporting system by Tilaajavastuu has a potential of producing savings up to 18 M€ for the construction industry companies.
In Sweden a similar system initiative was introduced in 2017 and with the Federation for European construction industries a pan European discussion is now in progress.
Work shop objectives
The aim of the workshop would be to discuss the following:
a) are the issues addressed common for all parties both in the real estate and construction industry
b) what beneficial conclusion can be drawn from the Finnish/Swedish experiences
c) what could be done concretely in other countries
Future plans
Currently the system is being expanded to provide information, regarding service providers, from all Scandinavian and Baltic countries as well as Poland. The expansion regarding adoption (Cities and large real estate and construction players) of the systems starts with Scandinavian and Benelux countries towards rest of Europe.
Future possibilities for the system is to create:
- European digitized employment system based on digital CV's
- Platform for adopting digital services within the Real Estate and Construction sector
Summary
The resolution of these social problems through digital solutions would contribute to great benefits for the companies working in this sector as well a the societies they operate in. Benefits would also be achieved for individual service workers. Furthermore this platform would pave way to the creating of digital services and business models as well as innovations around cross border employment, etc.
The basis for any functioning platform is:
1) Trust
2) Interoperability
3) Market Place
We believe that these criteria are fulfilled with this industry platform and thus it would be of interest for an international audience. The proposition is also concrete and proven. In an international context new and interesting angles could well be found.
