Creating Positive Externalities in Construction Projects
27 May 2026
Construction sites rarely have a good reputation. The noise, dust, and endless detours disrupt daily life, forcing those nearby to pause their routines and adapt. But here’s the reality: if cities want to hit net zero, construction isn’t optional. Roads must be reimagined, buildings retrofitted, and infrastructure upgraded to build a sustainable future.
This article argues that construction can also present a unique opportunity. Projects of this nature are moments of transformation, and transformation opens the door to reimagining how we approach development and the lasting value it can create. The focus, then, shifts from whether construction should take place to how we can ensure it delivers the greatest possible positive impact.
Looking beyond the immediate inconvenience, construction projects can generate lasting social value alongside their physical transformation.
Social Value in Regeneration Projects
The social value in regeneration projects is a well-established idea in the literature. Regeneration projects focused solely on upgrading buildings risk reinforcing social exclusion. Instead, approaches that combine local ownership, multi-stakeholder collaboration and meaningful community engagement throughout the project, allow regeneration to create benefits that extend well beyond the built asset itself (Parés et al., 2017; Bianchi, 2019).
At Akumen Labs, we explored these ideas through a social impact assessment of Dolphin Square, a 1,200-home residential estate in Pimlico, London. Social value was embedded throughout the project, from procurement and governance to spatial design and community engagement. The result was a restoration that strengthened both the estate and the surrounding community.
Fostering local ownership
One way to create lasting social value is to ensure that the economic benefits of construction remain within the surrounding community. This is the principle behind the local multiplier effect, coined by the economist John Maynard Keynes in his 1936 book The General Theory of Employment, Interest and Money. By employing people locally, working with nearby suppliers and involving local businesses, a greater share of project spending stays in the local economy, creating benefits that continue long after construction has finished.
The local multiplier effect refers to the additional economic activity generated when project expenditure is retained within the local economy (Moretti, 2010). Spending on local labour, suppliers and businesses recirculates through nearby households and services, amplifying the overall economic benefits of an investment (Bartik, 2020).
One of the main ways to generate this multiplier effect in our specific context is through public social procurement. The latter can create social value in several ways when it is designed with the local community in mind.
Strengthening long-term partnerships: Procurement strategies that bring together contractors, training providers and local employment organisations deliver stronger social outcomes, as shown by Akumen Lab’s social impact assessment for Dolphin Square. Long-term collaboration creates more sustainable employment pathways and lasting local benefits (Loosemore et al., 2023).
Creating pathways into employment: Employment-focused social procurement helps reduce barriers for disadvantaged workers by connecting training directly with real job opportunities through partnerships across sectors (Suchowerska et al., 2024).
Supporting the local economy: Directing project spending towards local suppliers and businesses increases local employment and earnings, allowing investment to circulate within the surrounding community and generate benefits that extend beyond the construction site (Wontner et al., 2020).
Embedding social value in decision-making: In the UK, this approach has increasingly been supported through the Public Services (Social Value) Act 2012, which requires public procurement to consider wider community benefits alongside cost (Cabinet Office, 2025).
Fostering community engagement
Construction projects also create an opportunity to strengthen the social life of a place. Shared spaces such as entrance halls, cafés, terraces, gyms and co-working areas provide opportunities for people to meet, build relationships and feel part of a community. While these spaces may seem ordinary, they play an important role in everyday life.
Brown and Barber (2012) describe these everyday places as soft infrastructure because they quietly support social life through repeated interactions. Their value lies in bringing different groups together through informal, low-friction encounters embedded in daily routines (Evans & Jones, 2008). Over time, these familiar interactions build what Blokland (2017) calls public familiarity: a gradual sense of belonging and attachment to a place that develops through recognising neighbours and familiar faces.
The value of shared public spaces lies in the accumulation of superficial, everyday interactions that generate a sense of belonging and attachment as well as a fluid relationship with place identity (Blokland, 2017).
At Dolphin Square, protecting this social life became part of the restoration itself. Existing activities, including the weekly Wednesday Tea and summer events, continued throughout the works, while new resident-led initiatives such as book clubs also emerged. Shared spaces, including the café, terrace, gym and co-working area remained active, allowing residents, visitors and workers to continue meeting as part of their everyday routines. The restoration, therefore, supported the continuity of community life while the physical environment was changing.
Looking beyond Dolphin Square, these everyday interactions highlight the wider role that shared spaces can play during construction. Fiorentino (2024) argues that they should be understood as social infrastructure and embedded within the wider strategy of regeneration projects. As architect Christopher Day (2017) reminds us, buildings are "places of soul". Their value comes as much from the relationships they nurture as from the architecture itself.
References
Bartik, T. J. (2020). Local economic development policies. In Handbook of regional and urban economics (Vol. 5, pp. 1037–1088). Elsevier. https://doi.org/10.1016/B978-0-444-64125-0.00015-6
Bianchi, M. (2019). Renewing the city through public participation and cultural activities: The case study of Gillet Square, a community-led urban regeneration project. Journal of Entrepreneurship and Organisation Diversity. https://jeodonline.com/wp-content/uploads/2019/07/01-Bianchi-f.pdf
Blokland, T. (2017). Community as urban practice. John Wiley & Sons.
Brown, J., & Barber, A. (2012). Social infrastructure and sustainable urban communities. Proceedings of the Institution of Civil Engineers – Engineering Sustainability, 165(1), 99–110. https://doi.org/10.1680/ensu.2012.165.1.99
Cabinet Office. (2025). PPN 003: The Public Services (Social Value) Act 2012. https://www.gov.uk/government/publications/ppn-003-the-public-services-social-value-act-2012/ppn-003-the-public-services-social-value-act-2012-html
Day, C. (2017). Places of the soul: Architecture and environmental design as a healing art. Routledge.
Fiorentino, S. (2024). Are shared workspaces a new form of social infrastructure? Planning Practice & Research.https://doi.org/10.1080/02697459.2024.2367291
Evans, J., & Jones, P. (2008). Rethinking sustainable urban regeneration: ambiguity, creativity, and the shared territory. Environment and Planning A, 40(6), 1416-1434. https://journals.sagepub.com/doi/abs/10.1068/a39293
Moretti, E. (2010). Local multipliers. American Economic Review, 100(2), 373–377. https://doi.org/10.1257/aer.100.2.373
Parés, M., Ospina, S. M., & Subirats, J. (Eds.). (2017). Social innovation and democratic leadership: Communities and social change from below. Edward Elgar Publishing.
Suchowerska, R., Loosemore, M., & Barraket, J. (2024). How employment-focused social procurement tackles health inequities: an investigation of Australia’s construction industry using determinants of health theory. Construction Management and Economics, 42(11-12), 977-991. https://doi.org/10.1080/01446193.2024.2364219
Wontner, K. L., Walker, H., Harris, I., & Lynch, J. (2020). Maximising “Community Benefits” in public procurement: tensions and trade-offs. International journal of operations & production management, 40(12), 1909-1939. https://doi.org/10.1108/IJOPM-05-2019-0395