Have recent events accelerated the use of existing technology? Lightfield’s Rupert Tait asks.
Think the Construction Industry won’t be disrupted by technology? Try paying for your dinner at a restaurant with a cheque. Like the Finance Industry, it is only a matter of time before construction adopts more technology.
A recent survey by IFS found that companies concerned with economic disruption were 20% more likely to plan increased spending on digital transformation. To summarise; concerned people view technology as their lifeline in these uncertain times. The question remains though, what about construction? While almost all other industries turn to technology in their hour of need; we examine how the construction industry, which has always lagged behind in its technological adoption, reacts to current affairs.
It is fascinating that an industry so perfectly positioned to benefit from technology was historically the least receptive. Whether inaccuracies in estimation, delays in construction or the economic and social impact of waste; the construction industry is plagued by easily rectifiable issues often taken for granted or completely overlooked.
Louay Dahmash [Autodesk] noted that 30% of the world’s waste comes from construction, stating that a key reason for that waste and inefficiency is the lack of collaboration. The UK construction industry alone uses 400 million tonnes of material every ear – it produces 100 million tonnes of waste. A recent article in Medium described how construction companies are dogged by stagnant productivity and low levels of profitability. According to Eurostat, productivity in construction has grown by a meagre 2% over the last decade.
So how did the construction industry react to the global pandemic? The good news is the recent events have served as an accelerant of existing technology trends.
Mckinsey Digital estimates that we’ve vaulted five years forward in consumer and business digital adoption in a matter of around eight weeks.
Manufacturers are said to be actively developing plans for “Lights Out” factories and supply chains – completely automating the process to protect against further disruptions. That is in stark contrast to previous estimations that construction and real estate companies reinvested less than 1% into research and development.
My own experience is in the lighting industry. We launched a platform to connect manufacturers, contractors, and specifiers. In 2019, customers wanted to meet face-to-face at their offices in Europe, this of course is an expensive way to do business development. Today, however, we are able to have a quick video conference call and achieve an even better outcome at a lower cost of doing business. This is a microcosm of the industry as a whole; the ‘new normal’ is an openness to technology.
No place is this shift clearer than in Venture Capital activity. By the end of 2020 it is forecasted that Venture Capital investment within the construction industry will have increased 56% YOY and is forecasted to hit $1.3bn.
VCs consider ‘timing’ as a key determining factor in a Start-up’s success – such a dramatic increase in funding is a clear indication that the construction industry is ready to embrace a technological revolution. Who would have guessed that it would take a global pandemic to be the catalyst?