Looking to the Future of the Construction Industry
Exploring technology adoption rates, the growing industry gap, and what this means for the future.
Construction has come a long way since the mud and clay that it started with. From safety regulations to mobile devices to Computer-Aided Design, even to motorized vehicles, innovation has made a world of difference. These recent tech trends have had drastic impacts on the construction industry, such as improved safety, increased efficiency and additional focus on sustainability.
New technology will continue to disrupt the industry and change how we do work.
Technology Adoption Rates in the Construction Sector
With outcomes like improved safety, lowered labor costs, faster issue resolution, increase of quality and improved customer experience, recent emerging technologies are changing the game for the construction industry.
As of 2017, 83% of firms say mobile capabilities are important or very important. Recent developments in mobile apps for construction can lead to reduced construction delays by enabling real-time information gathering at the job site. Mobile apps also streamline communication with owners and project stakeholders, reducing errors, and more quickly resolving issues.
Emerging tech adoption rates
Mobile apps continue to have a large impact on the industry, but there are new technologies making their way onto job sites.
- 38% of companies are utilizing drones for surveying, analyzing data, displaying progress, and monitoring job sites. Drones can greatly reduce the time investment for each of these tasks while also making the project safer overall.
- Prefabrication/modularization has been on the rise for the past few years with 20% of companies incorporating it into their strategy. This growth can be attributed to the financial savings, flexibility, and consistent quality that comes from modular construction.
- Similar to the impact of drones, 360-degree photos and videos allow for clearer displays of progress and job site monitoring, which is why 20% of companies are utilizing it.
- 15% of companies utilize 3D scanning to streamline documentation and collaboration. Companies can create a 3D model, annotate it, and provide edits all before building anything.
- Like many of the previous new technologies, smart tools allow companies to maximize their profits. 13% of companies are utilizing smart tools to drive effective management of tools and equipment costs.
- Virtual reality and augmented reality both have enormous growth potential in the construction industry, but are currently only utilized by 13% of organizations. Augmented reality has the potential to significantly improve project efficiency while virtual reality is proving to be an effective planning and rendering tool. Both provide immersive, virtual environments, allowing the team to better understand the project before it physically exists.
- As household applications for 3D printing have grown, as have architectural applications. 10% of companies use 3D printing in the construction of walls and even full buildings which speeds up construction, reduces accidents, cost, and waste, and allows for the creation of more complicated designs.
- Safety is a large concern for an industry where people dying on projects used to be the norm. 9% of companies are fighting this with wearable devices. Devices like smart boots allow for the tracking of workers and can even sense when they are fatigued or get hurt. Smart vests, smart helmets, and smart glasses are all additional wearables increasing the safety of workers on job sites.
- 7% of companies are using job site sensors to build smart ecosystems since they can be used on nearly everything on a job site. These can be used to protect workers, prevent damage, and optimize assets.
- Even with the surplus of new technologies all with their own benefits to safety, productivity, and revenue retention, more than half of companies don’t allocate any budget to research new tech and 38% of companies aren’t trying any new technology in 2017.
Understanding the roadblocks to adoption
Technology is scary to adopt in any industry. There’s a learning curve, it’s expensive, and there’s no guarantee of its effectiveness. Where does the construction industry struggle in technology adoption?
- Construction firms and crews tend to be old-fashioned or comfortable in how they do things and wary of fancy new technology offerings.
- Many firms understand the benefits of technology but are reluctant to take crews off billable projects for internal training and implementation.
- Failed implementation of adoption of a past technology solution can make firm management averse to additional technology opportunities.
- Field workers often don’t want to change how they do their jobs and may feel threatened by technology. Less than one in four construction employees are “very comfortable” with new technology.
- In 2017, 46% of firms spent less than 1% of their annual sales volume on IT. That number is down 9% from 2016 (which means budgets are slowly increasing), and fewer than half of firms had a dedicated IT department in 2017.
- There are multitudes of new technologies shaking up the construction world, but many companies aren’t ready to adopt because of an old-fashioned mindset and a fear of change. As companies adopt new technology, they will likely see an increase in profit margins, safer job sites, more efficient workers, and better communication across teams.
Why Tech Has Been so Hard for the Majority of the Industry to Adopt
We have seen a surplus of new technology hitting the marketing as of recent. The introduction and expansion of concepts like artificial intelligence, artificial reality, internet of things, 3D printing, and wearable technology enable an immense opportunity for the future of the construction industry.
While much innovation is happening in construction, the industry is falling behind the economy as a whole when productivity is considered. If new technological advancements provide opportunities for increased productivity, why is the industry so slow to adopt?
Contractors frequently have little wiggle room when it comes to budget and upfront costs can be steep for implementing new technology. The implementation may also require the hiring of more staff and training for employees. The larger the firm, the more significant the required investment will be in order to integrate new technologies into their practices.
Implementing new technologies can severely disrupt normal operations in the worst cases. This profit loss could be detrimental to a business and many choose to avoid the risk altogether by continuing to use the same technology they’ve always used.
Lack of Existing Use Cases
Without a guinea pig, it’s hard to justify the cost investment and taking on the risk of implementing new technology. This creates a loop where most firms don’t want to be first-adopters and then no one is stepping up to be the first.
There is immense innovation happening in the construction industry and with new technology hitting the market constantly, there is a large opportunity for growth and an increase in productivity. Various roadblocks keep the industry from adopting these technologies more readily, but their hesitation can largely be attributed to the upfront investment that comes with implementing new technology.
Understanding Construction’s Productivity Gap and How it Can be Overcome
Improving a mere 1% globally over the past 20 years, the construction industry is far behind the global average for productivity increases across the past several decades. Presently, the industry lags in productivity by about $1.6 trillion each year as compared with the global average.
The impact? Lost jobs, low profits, and unnecessary headaches for contractors and other industry professionals.
Thankfully, the industry is on the verge of a fundamental overhaul as urgency grows on a global level. A strategic shift of this size doesn’t happen overnight, but construction is changing.
The industry is actively adapting as new technologies are introduced globally. An optimistic 92% of construction executives believe construction technology can help close the productivity gap, according to a 2017 KPMG study.
Why is there a productivity gap?
From the outside, the construction industry appears to be evolving rapidly with the continued introduction of advanced technology. In reality, the industry faces pressure from all directions. Some of the main forces influencing the gap include:
- External forces. Much of the gap in productivity comes as a result of outside forces. For starters, projects (and sites) have grown increasingly complex.
- Industry mistrust. Mistrust and litigious culture have grown in prevalence in the building sector.
- Poor project management. Sub-par project management and execution on a job site level hurt the global construction sector. While the design process is often perceived as problematic, the majority of projects start with either too little planning, no accounting for risk, or both.
What is happening as a result of the gap?
The productivity gap is driving a number of negative outcomes, including higher costs, increased risk, and more waste (labor and material). The industry can’t continue like this.
How can it be closed?
Thankfully, the industry is continuing to evolve, helping to reduce the gap. There are a few ways the industry can work to close the productivity gap and start seeing new growth.
- Increase technology adoption rates. Adopting emerging technologies has the potential to drive outcomes like improved safety, lowered labor costs, faster issue resolution, an increase of quality, and improved customer experience. There is more to come by way of new technology in the construction industry, but in order for it to be impactful, the industry needs to be open to adopting and implementing it.
- Better scenario planning. With the potential for so much to go wrong on the job site, it’s crucial for project managers to have foresight here. While it’s impossible to predict everything that could happen within a project, it is possible to have a backup plan for some of the more common scenarios such as permits not coming in on time, materials not being onsite, or the job site not being ready to start work.
- Modular design and standardization. The biggest boost in productivity can come from the use of modular design and standardization. Additionally, utilizing prefabrication processes will allow much more work to happen off-site which is cheaper and more efficient. While it requires a greater time and financial investment up front, it will pay off ten-fold in the long run. All of these combined allow facilities to have a longer lifespan as they are built in a uniform fashion, allowing spare parts to be used interchangeably across buildings.
All of these activities tie-in with the general concept that there needs to be more focus on the planning and development part of the construction.
There is a notable productivity gap present in the construction industry as compared to other industries. This is a result of a handful of factors, most notably mistrust within the construction industry and poor project management. As a result of the gap, project costs are higher, risk is higher, and there is more labor and material waste created. While this is an enormous gap to close, adopting new technology and implementing a culture of better collaboration within the construction industry can help to ensure the gap is lessened and, eventually, closed.
The Future of Construction
Current and new technologies largely promote increased productivity. In the big picture, technological advances will also drive improved safety, a larger focus on sustainability, and combat rising material and skilled labor costs. Based on the technology available now and what we see in the future, here are some educated predictions about the future of the construction industry:
Five Years in the Future
- Deaths related to large projects will soon be entirely in the past as improved safety features come to the market.
- There will be an increased focus on sustainability as 3D printing is used more and more.
- Rising material and skilled labor costs will have organizations looking to automate more and take advantage of machines over humans.
- Pre-fabrication and modular construction will become more prevalent, boosting productivity in organizations.
Ten Years in the Future
- As the technology is developed further, robotics will become more commonplace on job sites and likely reduce many of the manual labor hours that are currently part of projects.
- IoT, AI, AR, VR, and other new technologies will change how projects are designed and executed entirely.
- Advanced materials, like self-healing concrete, will reduce maintenance needs — though likely at a steep initial cost.
There are countless new technologies coming to market and their applications to construction are boosting productivity, safety, and bottom lines. As it’s trending, the industry will likely see increased safety protocols as well as an expanded focus on sustainability in the near future.
What we know for certain is that technology will continue to adapt and develop. Staying on top of new technology trends will give your organization an edge over the competition.
Top Construction Tech Startups to Watch this Year
The construction industry has been around since at least 9,000 BC when people first started making bridges from wooden logs. The industry has developed tremendously over the past 11,000 years — yet many challenges exist that have stagnated productivity over the last several decades.
Despite flat productivity and the billions in resulting costs worldwide, construction organizations have been largely hesitant to adopt new technologies and strategies to improve this.
All this makes the construction industry ripe for innovation and technological advancement, and there are countless exciting construction-related startups and technology firms in the market today. Here are a few of the top construction tech startups to watch in 2019.
Trade contractors do so much work that needs to be documented and doing so manually is largely inefficient. Enter: eSub. Working to move contractors away from pen and paper, eSub is helping drive increased productivity for contractors.
Most companies are stuck in their old ways, using tools that create silos and inefficiencies within a company. eSub aims to solve this with their wide-sweeping integration capabilities that enable increased efficiency and eliminate the need for additional individuals to do data entry.
eSub’s platform is modular and includes project management. Within the platform, construction companies can complete a project from start to finish. All documents can be hosted in the cloud, all emails can be tracked and the mobile app allows foremen and field workers to do this on the job. This allows for real-time digital documentation, allowing employees to do better quality work and saving the business money on their bottom line.
When you don’t have your whole team in the office every day, team collaboration, coordination and communication can be difficult. Fieldwire is the hub for job site coordination.
Fieldwire is the place for the entire project team to come together to collaborate and share information in real-time. Team collaboration is enabled through real-time messaging, tasks, punch lists, inspections, scheduling and reports. These tools drive increased productivity and efficiency, allowing the team to just open the app and see the results of the latest inspection, message colleagues and view progress on today’s punch list.
Fieldwire also puts important documents just a click away with mobile plan viewing, markups and as-builts, and digitized forms. With Fieldwire, workers can submit documents faster and easier, record markups and view drawings on any device to increase productivity and reduce time spent on admin work.
When Imajion’s founder, Charles, was a kid, his family was in construction. At the time, his father was a project manager and spent his time traveling from job site to job site, leaving little time for him to spend with Charlie. This experience gave Charlie insight as to how multiple projects were coordinated at once, revealing communication as a big barrier in the construction industry.
With Charles’s first-hand experience with the impacts of poor communication, Imajion set out to make a change in the industry. Imajion identified that the biggest problem is the construction industry still runs off of email and other inefficient methods of communication. Since the construction site is three-dimensional, they decided to build a communication platform that utilizes mixed-reality so multiple stakeholders can participate in a call, allowing them to see the job site virtually in real-time.
Imajion is the only mixed-reality communication platform in the AEC (Architecture, Engineering, Construction) space and they have reduced travel by 60% for onsite visits for their customers.
In 2019, who has the time to write daily reports by hand? They’re tedious and take away valuable time that could be used onsite.
With NoteVault, workers speak their daily reports into the app. Transcribers then convert the audio notes into text pushed to daily reports. Not only does this save time and money, it protects your company against potential disputes and makes it easier for workers whose first language isn’t English. Notes can be recorded in their native language and then transcribers translate the notes before they’re inputted into daily reports.
Too often, talented crafts workers are promoted to a leadership role without having the necessary skills to effectively manage the work and deal with the challenges associated with the position. On a daily basis, these men and women are asked to marshal and manage resources, and meet safety, environmental, quality, productivity and schedule requirements in an extremely dynamic environment. With tremendous responsibility placed on these individuals, their development and support should be a key component of any construction company’s risk management plan.
Trestles Construction Solutions was founded in 2017 to meet the demand for the development of frontline supervisors within the construction industry and to provide a simple tool to facilitate effective planning, scheduling, and reporting processes. Trestles provides a mobile software application, Trestles Labor Management System (TLMS®), which is designed to drive, standardize and automate short interval planning, scheduling, and reporting processes. Trestles also provides a construction frontline supervisor development program which focuses on construction planning and scheduling, labor management and productivity, continuous improvement and effective leadership.
Combined, these empower frontline leaders to run their crews more efficiently, effectively and productively, improving safety and quality measures along the way.
When you’re buying a product, if you don’t pay, the seller can repossess the original product. With services, you use a lien to guarantee payment. With a lien, the seller has the right to obtain possession of the purchaser’s property if the purchaser fails to repay their debts.
zlien is bringing this concept to construction. (Hence zlien) zlien takes a holistic approach to the problem, incorporating lien right in their software. With a purpose-driven mentality at the forefront of their culture, zlien looks out for the little guy, creating a fair payment platform.
Although there is no one else doing what zlien does, their biggest differentiator is their culture that the whole team is bought-in on: empowering people to get what they earn.