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.

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.

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.

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. 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.
  7. 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.
  8. 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.
  9. 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?

  1. Many firms understand the benefits of technology but are reluctant to take crews off billable projects for internal training and implementation.
  2. Failed implementation of adoption of a past technology solution can make firm management averse to additional technology opportunities.
  3. 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.
  4. 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.
  5. 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.

Cost

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.

Risk

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.

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.

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:

  • 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.

  • 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.

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.

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.

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