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Construction as a Mature Technological System

Technology and Industry Structure

An industry with a deep layer of specialised firms that form a dense network of producers, suppliers and materials was called a ‘technological system’ by Thomas Hughes:

Technological systems solve problems or fulfill goals using whatever means are available and appropriate; the problems have to do mostly with reordering the physical world in ways considered useful or desirable, at least by those designing or employing a technological system (Hughes 1987: 53).

Hughes was an engineer and historian of technology, who saw technology as “craftsmen, mechanics, inventors, engineers, designers and scientists using tools, machines and knowledge to create and control a human-built world”. Technological systems are, for Hughes, the key to understanding technological change. He studied the development and evolution of electric light and power between 1870 and 1940, and wrote a history of the industry. He saw these large, modern technological systems evolving in a loose pattern:

“The history of evolving, or expanding, systems can be presented in the phases in which the activity named predominates: invention, development, innovation, transfer, and growth, competition, and consolidation”. As systems mature, they acquire style and momentum.” (Hughes 2004: 65).

When viewing the construction industry as a technological system, the age of the system is the most obvious feature. Most of the various elements of the modern industry came together over the nineteenth century, pushed along by ever larger and more complex projects building canals, roads, bridges and tunnels, railways, factories, offices and housing. During the 1800s the world was urbanising as population rapidly increased and major cities attracted migrants and businesses. In the second half of the century heavy industry and manufacturing spread around the world, from England and Western Europe to America then Japan. New industries needed new types of buildings, typically larger, higher and stronger than traditional methods and materials could provide. Bowley (1966) for the UK and Fitch (1966) for the US are well known histories.

It’s a remarkable fact that the building and construction industry we have today is a technological system that has been developing for 150 years. As a mature technological system, this can be expected to be in many places a quite concentrated industry, run mainly by finance and management types, and having a high degree of technological lock in due to the age of the system. Many of the industry’s global leaders are well-established, Bechtel for example is over 100 years old, and others like Hochtief, Skanska, and AECOM can trace their origin stories back over a similar period. Shimizu is over 200 years old.

Building and construction as an industry cluster has quite different characteristics to the industries studied by Thomas Hughes, and how the modern form of the industry developed over the twentieth century is another interesting story in its own right. The most obvious difference to the industries used as examples by Hughes is the size and diversity of building and construction, because statistics on the industry includes the enormous number of firms and people engaged in the alteration, repair and maintenance of the built environment as well as contractors and suppliers for new builds. The broad base of small firms is a distinctive feature of the overall construction industry as we define it. However, the part of the industry that is engaged in delivering projects (that is, part of a problem-solving technological system) is made up of larger firms than this long tail of small, typically family-owned, businesses.

With industrialised production, prices of manufactured goods decline over time as economies of scale and scope kick in, and over time those cheaper prices allow new technologies to spread and find new uses. Moore’s Law and the price/performance relationship of computers is athe best known example. An example of this price effect in building and construction was machine-made nails. Originally nails, like everything else, were hand made, and in fact were more expensive than screws, “but by 1828 the cost was down to 8c per pound [two kilos] and in 1842 to 3c. Dimensioned lumber and cheap nails made possible a whole new order of speed and economy in wood framing.” (Fitch 1966:121). Combining these two innovations a new system of building known as the ‘balloon frame’ came out of Chicago in the 1840s, and with nailed light timber frames two people could do the work of twenty using traditional methods. This very large increase in productivity came from two relatively simple innovations that, together, had a major impact. Balloon frames were sold in catalogues in many styles, and were used to build the new railway towns and suburban housing spreading across America over the following decades. This highlights the importance of understanding how a combination of new innovations within a technological system is often more significant than the individual new technologies themselves.

This also highlights the fact that the single most important factor in technology uptake is the price/performance relationship, or the gain in productivity or other measure (time, quality, safety, choice) the new technology delivers for a given level of investment. To successfully displace an older technology a new technology has to provide an overwhelming economic advantage to overcome the inbuilt conservatism of an existing industry, due to the investment by incumbents in the current system.

Between 1800 and 1900 there were a series of technological shocks to building and construction, as the new materials of iron, glass and concrete opened up opportunity and possibility for designers, for both what was built and how it was done. Iron and steel divorced the building frame from the envelope between the Crystal Palace in 1851 and the rebuilding of Chicago after the Great Fire of 1871, and with the separation of the frame from the envelope came mass produced infill materials to replace load-bearing construction. Then the combination of steel and concrete made possible the development of reinforced concrete and steel skeleton structures. Both ‘building art and the art of building’ were transformed, not once but several times, over these years as the methods of industrialised building with iron, steel and reinforced concrete were refined.

Over the 1800s the increasingly widespread use of concrete had changed its status from hobby or craft to a modern industry, as scientific investigation into its material properties revealed its shear and compressive characteristics. With the development of reinforced concrete there was change in architectural concepts of structures and approaches to building with concrete. The industrial standards of concrete technology influenced ways of thinking based on building systems and standardized building elements, and became identified with what was known as the Hennnebique System, a simple to use system of building with reinforced concrete columns and beams patented in 1892. According to Pfammatter (2008), by 1905 this system had spread across Europe and elsewhere, and Hennnebique’s company employed 380 people in 50 offices and had 10,000 workers. Concrete then set the agenda for the development of the construction industry as a technological system over the next hundred years, driven by the modernist movement in architecture, which explored the possibilities of these materials, and the increasing height and scale of buildings.

In these examples the relationship between technological change, conceptual thinking and organisational form is clear. While the striking thing is the interrelationship of these three aspects, the driver of these changes is technology, or more precisely new technology that fundamentally changes existing industry practices and delivers a shock to the existing system. With the advent of iron-framed and reinforced concrete buildings the construction industry had to not only master the use of these new materials, but also develop the project management skills the new technology required. That organisational change, in turn, was based on the deeper change in the way of thinking about the world that was fundamental to the industrial revolution and the invention of the scientific method (Landes 1972).

So, why would be experience of the industry over 100 years ago be relevant today? There are two parts to the answer. The first is that the nineteenth century is the only other period of disruptive change we have for comparison. The second is that the effects of technological change on industry structure and performance might plausibly again be in the same key areas as the organisation of projects and the mechanisation of processes, but in the twenty-first century these effects will be heightened and quickened by the network effects associated with digital platforms and artificial intelligence. Because industry structure (the number and size of firms) is fundamentally determined by technology (Sutton 1999), the emergence of new technologies and periods of rapid change can lead to new industries, but can also extensively restructure existing industries (Kamien and Schwartz 1982).

The construction technological system is extraordinarily wide and diverse, and the various parts of the digital construction technological system are in various stages of development. There are very many possible futures that could unfold over the next few decades. However, it is clear that the key technology that underpins these further developments, and upon which new combinations of technology will be based on, is intelligent machines operating in a connected but parallel digital world with varying degrees of autonomy. These are machines that can use data and information to both interact with each other and work with humans, and importantly this digital world will be one designed and built by humans. We are at the point where intelligent machines are moving from operating comfortably in controlled environments, like car manufacturing or social media, to unpredictable environments, like driving a car or truck. In many cases, like remote trucks and trains on mining sites, the operations are run as a partnership between humans and machines, as the saying has it “running with the machines not against them”.

The impacts of new technology on a mature technological system like the construction industry are generally thought to be gradual, changing industry practice over time without significantly affecting industry structure or dynamics. There are good reasons to think this may be wrong because of the current surge in advances in machine learning and the broadening potential of AI. A period of rapid restructuring of the industry similar to the second half of the 1800s may be about to start, when the new materials of glass, steel and reinforced concrete arrived, bringing with them new business models, new entrants and a greatly expanded range of possibilities. In the various forms that AI takes on its way to the construction site it will become central, in one way or another, to all the tasks and activities involved. In this, building and construction is no different from all other industries and activities, but the path of AI in construction will be distinct and different from the path taken in other industries. This path dependence varies not just from industry to industry, but from firm to firm as well.

The full conference paper Construction as a Mature Technological Sysytem can be downloaded here or read on ResearchGate here.

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About the Blog

This blog is concerned with the organisation of the building and construction industry, in the economic sense of combining factors of production to create output.


The modern industry's origins in the 19th century can still be seen in many of its characteristic features, and many contemporary issues are also found in projects from the past.


Like many industries, it is being reshaped by unprecedented rapid and widespread advances in materials, technology and capability.

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