Shaping the Future of Construction
Industry Transformation
One of the most comprehensive looks at the future of construction so far is a World Economic Forum report called Shaping the Future of Construction: A Breakthrough in Mindset and Technology, released in mid-2016. The report implicitly took a technological systems approach by including companies across the construction value chain and production system: suppliers of building materials, chemicals and construction equipment; contractors; engineering, architecture and planning firms; project owners and developers; academics; and leaders from government, civil society, and industry organizations. The Boston Consulting Group was involved, and over 60 people are cited as contributors so the report, while somewhat bland with a lot of conventional wisdom about the industry reiterated, also represents an industry consensus on what the near future might bring:
This report is the first publication of a multi-year project for guiding and supporting the Engineering and Construction industry during its current transformation. The report describes the industry’s present state, assesses relevant global trends and their impact on the industry, and devises an industry-transformation framework with key areas for development and action. It also features many best practices and case studies of innovative approaches or solutions, and offers a view – at different levels, such as at the company, industry and sector level – of how the future of construction might look.
To better understand what might be involved in this transformation the WEF devised the transformation framework in Figure 1. This provides an overview of expected changes in the industry over the three levels of companies, sector and government as twenty-first century technologies start to affect building and construction. Some of these changes are really a continuation of existing trends, such as internationalization and supply chain collaboration, or existing issues like better relations with government. However, their pathway from the present to the future for what they call ‘Technology, materials and tools’ and ‘Processes and operations’ is particularly relevant.
There are no explicit time frames given in the report, but the strong impression is that it’s more about the short to medium term, say five years, than the longer term. There are two reasons for this impression, apart from the fact that this is the time frame many senior managers and politicians work around. Firstly, the absence of dates of any sort in the discussion about the future of the industry is striking, but not unexpected, in a report with so many authors, as dates would be contentious for many technologies. Also, this report addresses few specific new technologies, BIM is the exception, and does not make any predictions.
Secondly, perennial issues such as recruitment and building codes feature in this framework, and these have been ongoing issues for the industry for decades. Changes is these areas are often very slow, and their underlying drivers are well beyond the possibility of short-term reform and restructuring. As they explain it this transformation "relies on the initiatives of individual companies – the adoption of new technologies and processes, business-model innovation, refinements to the corporate culture and organization, and so on. They also appeal for collective action by the industry as a whole and by governments in their dual role as regulators and clients. These appeals have featured in every industry policy document for the last 50 years.
The drivers for change at the company level are not as restricted by institutional inertia, or wider social trends such as demographics. The changes the WEF identified take the use of advanced materials and manufacturing processes as their starting point, and those changes lead inevitably to a more data intensive and digital industry that develops semi-autonomous construction equipment and utilises data analytics to maximise performance.
The report does not make specific predictions about specific technologies, in fact surprisingly few new technologies are discussed in the report. Instead, what they do is provide a number of summary case studies that demonstrate where the cutting edge of technology is, and then suggest that the rest of the industry should be catching up to these leading firms over the next few years. The case studies that demonstrate this ‘best practice’ are included in the company level changes in Technology, materials and tools, and are in the Table below. Note this is not a comprehensive overview of new technologies, these examples were contributed by the companies that participated in the study, so there will be many other examples from other major companies not included but known for innovation, such as Bechtel, Vinci and Obayashi, or General Electric, Pilkington and ABB. Nevertheless, it is a good starting point and shows what is being done at the leading edge in the industry.
Shaping the Future: Technology, materials and tools in 2016
Based on these examples, the level of technology use in construction, compared to advanced manufacturing techniques in 2016, is well behind. Companies in the aerospace or automotive industries have developed their automated factories, integration capabilities and use of new materials like carbon fibre. Adidas makes 300 million shoes a year and in 2017 opened a fully automated factory in Germany. There are many examples. The lag is primarily due to the dynamic of a project-based industry, where it is hard for contractors and consultants to spread costs incurred with innovation across projects. Consequently, the manufacturers and suppliers of building and construction products, machinery and equipment do most of the research and innovation because they, like car companies, can spread the development costs over many clients. The role of contractors is to seek efficiencies in delivery, as the examples show. What these examples also show is that the gap between the industry’s larger, leading edge firms and SMEs is growing, and can be expected to increase because the great majority of smaller firms cannot innovate as fast or as effectively as larger firms.