The Australian Built Environment Sector 2023

 The economic role of construction and related industries

 

 

This post combines data from the annual Australian Bureau of Statistics publication Australian Industry for fifteen industries that have a direct relationship with construction and the built environment. These industries make up the Australian Built Environment Sector and in 2022-23 they employed 2.3 million people and produced $348 billion in output. The Built Environment Sector includes industries involved in construction of buildings and structures, management and maintenance of the built environment, suppliers of materials, manufacturers of machinery and components, and professional services providers. 

 

The analysis is based on Industry value added (IVA) and Industry employment (in June for each year). IVA is the estimate of an industry’s annual output and its contribution to gross domestic product (GDP), and is broadly the difference between total income and total expenses. IVA is given in current dollars in Australian Industry, therefore changes in IVA reflect changes in both prices paid for goods and services and the quantity of output.

 

Table 1. Built Environment Sector Contribution to the Australian Economy 2022-23

                                                                                     Employment               IVA $bn

Total Australian Built Environment Sector                  2,266,000                    348

Total Australian employment and GDP                      15,369,000                  2,564

BES Percent of total employment and GDP                14.7%                          13.6%

 Source: ABS 8155, ABS 5206, ABS 6202. 

 

The IVA of the fifteen industries contributed 13.6 percent to nominal Australian GDP in 2022-23, within their long-run range between 13 and 14 percent of GDP since 2006-07.  Over that period the BES share of total employment fluctuated between 14 and 16 percent of total employment, and was 14.7 percent in 2022-23.

 

 

Figure 1. Built Environment Sector Contribution to the Australian Economy 2007-2023

Source: ABS

 

 

 

 

The Built Environment Sector

 

Onsite construction work links suppliers of materials, machinery, equipment, products and components. Consultants provide design, engineering, cost planning and project management services. Once produced, buildings and structures need to be managed and maintained over their life cycle, work done by another group of related industries. The built environment also needs infrastructure and services like water, sewerage and waste disposal, provided by yet more industries. he collective significance of these industries is obscured by their diversity, ranging from architecture to waste disposal, and their geographic distribution. Of the fifteen industries included in the Australian BES, three are from Construction.

 

Table 2. Industries included in the Australian Built Environment Sector.

Supply industries	Demand industries	Maintenance industries
Non-metallic mining & quarrying	Residential property	Water, sewerage & drainage
Building construction	Non-residential property	Waste collection & disposal
Heavy and civil engineering	Real estate services	Building & industrial cleaning
Construction services		Building pest control services
Architectural services		Gardening services
Surveying & mapping services
Engineering design & consulting
Manufacturing industries

 

 

Comparing the shares of employment and IVA for each BES industry in Figures 2 and 3 shows Construction and Building services have smaller shares of IVA than employment and are more labour intensive, while Water and sewerage, Professional services and Property and real estate services have larger shares of IVA than employment and are relatively more capital intensive. 

 

 

Figure 2. Employment by industry 

Source: ABS.

 

Figure 3. Output by industry  

Source: ABS.

 

Since 2007 the combined share of BES employment for the three service industries of Property and real estate services, Professional services and Building services has increased from 34.2 percent to 36.1 percent, and their share of IVA increased from 33.7 to 38.5 percent. Manufacturing’s share of BES employment fell from 8.9 percent in 2007 to 6.5 percent in 2023, and the IVA share went from 10.7 to 6.3 percent. 

 

Missing from the industries included in the BES are transport and distribution. Materials, components and builders’ suppliers have to be supplied to site by the transport industry, and there are thousands of hardware stores and builders’ merchants that maintain stock, manage logistics and extend credit to customers. Like their contractor and subcontractor customers, much of the supply chain for building supplies and materials is highly fragmented. A further complication is manufacturers who not only sell to distributors like the hardware chains, but also sell direct or act as their own distributors. 

 

 

 

The Construction Industry is the Core of the Built Environment Sector

 

The Construction industry is divided into three sub-divisions: Building construction; Heavy and civil engineering construction; and Construction services (the trades). Of these, Construction services is by far the largest, employing 867,100 people in 2023 compared to 250,800 in Building and 142,400 in Engineering. In 2022-23, Construction accounted for 54.5 percent of BES employment, and that share has been between 54 and 55 percent since 2007. 

 

However, over time the Construction share of BES IVA has been gradually falling, from 50.3 percent in 2007 to 46.9 percent in 2023. The share of BES employment is higher than the share of IVA, mainly due to the labour-intensive nature and lower productivity of Construction Services, where the share of Construction employment is much larger than the share of Construction IVA. Within Construction, internal dynamics have seen the employment and IVA shares of Construction services decline since 2007.

 

In 2007 Construction services accounted for 74 percent of Construction employment and 67 percent of IVA, and in 2023 these shares were 69 percent of Construction employment and 60 percent of Construction IVA. In 2007 the share of Building was 21 percent of Construction IVA and 17 percent of employment, and in 2023 these were 23 percent of IVA and 20 percent of employment. For Engineering, in 2007 the share was 12 percent of Construction IVA and 9 percent of employment, in 2023 the shares were 17 percent of IVA and 11 percent of employment. 

 

The much larger share of IVA than employment for Engineering reflects the higher capital intensity of engineering work with its extensive use of heavy machinery like excavators and road making equipment. Although to a lesser extent than Engineering, this is also the case for Building because the use of cranes and other equipment makes it more capital intensive than Construction services, where hand tools are used. 

 

 

Figure 4. Building, Engineering and Construction services shares of employment 

Source: ABS.

 

 

BES Manufacturing

 

In Australian Industry data for Manufacturing is provided at the level of industry class, where broad categories like Wood products or Metal manufacturing are divided into specific industries based on their products. At that level it is possible to identify seventeen manufacturing industries that are primarily associated with the built environment. For industries like Concrete products, Clay bricks or Structural aluminium inclusion is straightforward. 

 

However, some industries will supply others outside the BES. Therefore, BES manufacturing data requires some give and take, so industries like Textile floor coverings (employs 1,622) and Reconstituted wood products (chipboard and particleboard manufacturing, employs 2,222) are excluded, while Mining and construction machinery (employs 9,556) is included. 

 

In 2023 there were 147,776 people employed in construction related manufacturing industries. As Table 3 shows, the three largest industries are Wooden structural fitting and components with 27,908 employees, Structural steel fabricating with 21,521 employed, and Architectural aluminium products with 16,703. There are several industries that employ around 10,00 people, including Other structural metal products, Glass and glass products and Ready-mixed concrete. At the other end of the scale Veneer and plywood, Clay bricks, Plaster products, and Metal roof and guttering each employed less than 2,000 people. 

 

 

Table 3. Built Environment manufacturing industries: persons employed 2023

 Prefabricated wooden building manufacturing                     1,412

Wooden structural fitting and components                           27,908

Veneer and plywood manufacturing                                      1,268

Paint and coatings manufacturing                                         7,128

Glass and glass product manufacturing                                 9,374

Clay brick manufacturing                                                        1,310

Cement and lime manufacturing                                            4,204

Plaster product manufacturing                                              1,435

Ready-mixed concrete manufacturing                                   9,213

Concrete product manufacturing                                           8,133

Structural steel fabricating                                                     21,521

Prefabricated metal building manufacturing                         8,636

Architectural aluminium product manufacturing                  16,703

Metal roof and guttering manufacturing                               2,162

Other structural metal product manufacturing                     10,315

Fixed space heating, cooling and ventilation equip.              5,488

Mining and construction machinery manufacturing              9,556

Total Built Environment Sector                                              147,766

 Source: ABS.

 

 

Figure 5. Australian Built Environment Sector manufacturing industries 

Source: ABS. Includes construction related industries.

 

Since 2007 the share of BES Manufacturing in total manufacturing IVA has risen from 15 percent to 16 percent in 2023. The large increases in 2022 and 2023were due to the rise in input costs, as prices for materials and labour increased by around 40 percent. 

 

 

Macroeconomic Role 

 

The Australian BES has a significant macroeconomic role, firstly as a major source of employment, and second through the strong backward linkages in the supply chain to local manufacturing industries and materials suppliers. The effectiveness of economic policy often relies on the timing and extent of the BES response to changes in policy settings, seen in the 6.2 percent rebound of construction employment after the pandemic in 2020. 

 

Two other examples are the BES response to increased government expenditures in the fiscal policy response to the global financial crisis in 2008, and the increase in residential building from monetary policy loosening as interest rates were lowered to cushion the transition after the end of the mining boom in 2014.

 

During the financial crisis following the collapse of the US sub-prime mortgage market in 2008, there was a rapid and large increase in Commonwealth government expenditure on building work over 2009 and 2010, focused on schools. This fiscal policy stimulus was intended to maintain employment and economic activity at a time when the economy was slowing after the rate of GDP growth in 2010 dropped to half the rate of 2009. The increase in public expenditure led to an increase in BES employment of 5.3 percent, from 1,834,000 in 2010 to 1,932,000 in 2011. 

 

After 2016, as Engineering construction work dropped from the record highs of the mining boom between 2013 and 2015, the Reserve bank of Australia lowered interest rates to boost other parts of the economy. The subsequent increase in residential building work during the apartment boom between 2016 and 2019 prevented a recession during the transition period after mining investment was no longer driving growth. That increase in residential building led to an increase in BES employment of 6.7 percent, from 1,918,000 in 2016 to 2,046,000 in 2019.

 

Figure 6. Australian Built Environment Sector employment 

Source: ABS.

 

 

Conclusion

 

When a dense network of many different firms from different industries are too geographically distributed to be a cluster, they are an economic sector.  There is no specific definition of an industrial sector, as it is a broad collection of firms with one or more common characteristics, like ‘agriculture’ or ‘the business sector’, though firms in these sectors come from many different industries. This is also the case with the diverse collection of firms and industries involved in constructing and maintaining the built environment.

 

There are fifteen industries with data available from the annual ABS publication Australian Industry that can be classified as contributing to the built environment. The industries included in the Australian Built Environment Sector form one of the largest and most important industrial sectors in the economy. The BES includes industries involved in construction of buildings and structures, maintenance of the built environment, and related suppliers of materials and professional services. The collective significance of these industries is obscured by their diversity, ranging from architecture to waste disposal, and their geographic distribution. Viewing them as an industrial sector provides perspective on their role and significance in the economy.

 

The analysis is based on Industry value added (IVA) and Industry employment. In 2022-23, the BES employed 2.3 million people and produced $348 billion in output, their IVA contributed 13.6 percent to nominal Australian GDP and their share of total employment was 14.7 percent. The construction industry is the core of the sector, making up 55 percent of BES employment, and 47 percent of BES IVA. Seventeen manufacturing industries are included in the Australian Built Environment Sector, and in 2023 there were 147,776 people employed in these construction related manufacturing industries.

 

The Australian Built Environment Sector has a significant macroeconomic role as a major source of employment, and through its links in the supply chain to local manufacturing and materials suppliers. The effectiveness of economic policy often relies on the BES response to changes in policy settings, like the 6.2 percent rebound of construction employment after the pandemic in 2020. Two other examples were BES employment growth in response to increased government expenditures in the fiscal policy response to the global financial crisis in 2009, and to the increase in residential building from monetary policy loosening as interest rates were lowered to cushion the transition after the end of the mining boom in 2014.

 

In the same way Manufacturing is not itself an industry, but a collection of industries that make up an industrial sector of the economy where firms have similarities in products and processes, industries that contribute to the construction and maintenance of the built environment can also be collected and their contribution to output and employment measured. The economic role of the BES is important and better data on its structure and role can contribute to policy decisions that significantly affect both its own performance and macroeconomic outcomes.

 

 

Employment Trends in Australian Built Environment Industries

 Record High in Built Environment Employment

The number of people employed in the 16 industries that make up the Australian Built Environment Sector reached 2.23 million in 2020-21, an increase of nearly 10 percent over the previous year, contributing 17 percent to total employment in Australia. 

Figure 1

The largest industry is Construction, which employed 1.2 million people (54%), followed by Property and real estate with 333,000 (15%), Professional services 269,000 (12%) and Building services 206,000 (9%). These four industries include a dozen smaller industry groups, and account for 90 percent of persons employed in construction and maintenance of Australia’s built environment. 

 

Figure 2

The big increase in 2021 was a rebound after the 1.3 percent fall in total BES employment in 2019-20. In all industries, with the exception of Water and Waste, employment fell in 2020, and by over three percent in Property and real estate services. In the post-lockdown recovery employment growth in 2020-21 was strong, at over eight percent in Construction and over six percent in both Building services and Professional services. 

 

Figure 3

In the decade from 2007 to 2017 there was a small increase in total built environment employment, however the rate of employment growth since 2018 has been much stronger. The only industry that has not increased employment is Property and real estate services, but in 2020-21 the other industries all had record numbers of people employed after a significant increase in employment. However, this was an unusually large upturn and much larger than the annual increase in output for these industries. 

 

Figure 4

The average growth rate of total employment in the five years to 2021 has been one percent higher than the 15 year average, at 2.5 percent a year. The highest 5 year average rates of growth in employment were five percent a year in the combined Water supply, sewerage and drainage services and Waste collection, treatment and disposal services, and over four percent a year in Professional services. Also of note is the growth in manufacturing employment after a decade of decline. 

 

Figure 5

The Australian Built Environment Sector

 

The Australian Built Environment Sector uses data provided in the Australian Bureau of Statistics annual publication Australian Industry, produced from a combination of directly collected data from the annual Economic Activity Survey conducted by the ABS, and Business Activity Statement data provided by businesses to the Australian Taxation Office. The data includes all operating business entities and Government owned or controlled Public Non-Financial Corporations. Australian Industry excludes the finance industry and public sector, but includes non-profits in industries like health and education and government businesses providing water, sewerage and drainage services. The industries included account for around two-thirds of GDP. Industries are groups of firms with common characteristics in products, services, production processes and logistics.

 

Figure 6

Data on the construction industry captures the onsite activities of contractors and subcontractors. However, onsite work brings together suppliers of materials, machinery and equipment, products, components and other inputs required to deliver the buildings and structures that make up the built environment. Consultants provide professional services such as design, engineering, urban planning, cost planning and project management as inputs into building and construction projects. There are also inputs from transport, finance and legal services, although data for these services is not available. 

 

Other industries like tourism and defence are structured around such value chains and production networks, and when firms from different industries share sufficient characteristics they are described as an industry cluster or sector. In the case of tourism an annual satellite account that combines the industries involved is produced by the ABS.

 

Table 1. Industries included in the Australian Built Environment Sector

Supply industries	Demand industries	Maintenance industries
Non-metallic mining and quarrying	Residential property	Water, sewerage and drainage
Building construction	Non-residential property	Waste collection, and disposal
Heavy and civil engineering	Real estate services	Building and industrial cleaning
Construction services		Building pest control services
Architectural services		Gardening services
Surveying and mapping services
Engineering design and consulting
Manufacturing industries

 

 

Construction in the Fourth Industrial Revolution

Update from the Technology Frontier

It seems to me building and construction will become a laboratory for the fourth industrial revolution. This update from the technology frontier broadly looks at both open and closed emerging platforms. It covers Katerra’s expansion and links to a recent interview with Executive Chairman Michael Marks, a recent paper in Construction Management and Economics on the digital evolution of DPR Construction, RAD Urban and Project Frog, and a new JV between Bentley and Topcon, Digital Construction Works, to provide digital ‘twinning’ services to contractors. The last topic is venture capital invested in the built environment related firms, which was over US$75 billion between 2015-2019.

A previous post looked at site production, with remote controlled equipment, 3D printed machinery and 3D concrete printers. My view is that economies of scale will increasingly favour site production, with exceptions like poured concrete, and the future will see building and construction move to a form of hybrid production that combines off-site manufactured components with those printed on-site. The mix of the two determined by the project’s characteristics.

I suggest three pathways for the development of industry processes and structures over the next few decades, in the sense of technology adoption and implementation trajectories. These are the business as usual, upgraded and modified, and transformational versions of the industry. What really differentiates the three is the rate at which new technologies are taken up, which in turn leads to different trajectories of technological development for firms within those three pathways, which are:

1.       Business as Usual - Similar But Smarter

Where the industry as a whole is much larger than any given project, and the individual projects reflect a consensus view on what the appropriate technological mix might be for that type of project, in that place at that time. Over time this industry consensus moves to include whatever the most effective or efficient piece of technology available.

2.       Upgraded and Modified - Manufactured Mass Customization

These firms invest considerably more in technological development, making significant changes to the way they are organized and the way they organize their projects. Some businesses are much better at this than others. The companies included in this post are clearly on this path, laying the foundations for the future industry, or in Bentley’s case meeting a requirement for an industry built on digital twins.

3.       Transformational - Faster, Higher, Stronger

New production technologies automate many tasks and processes and create new machines that are far more capable than existing ones. Materials and machinery become smart, with embedded processors, are networked and communicate with each other. Components are location and condition aware. Humans partner with machine intelligence to accomplish many tasks, and use robots or exoskeletons for most physical work, with remote control of automated heavy plant and equipment, while fabricated and modular components combine with automated systems and onsite robots to transform the building process. This is happening, as the KES example below shows.

Katerra

Katerra was founded in 2015, and in 2017 raised $130 million reaching a $1 billion valuation. The company’s goal is complete vertical integration of design and construction, from concept sketches to installing the bolts that hold their buildings together. On its projects the company is typically the architect, off-site manufacturer and on-site contractor, and usually contracts directly with developers, who are its clients. The company’s focus is on reducing the time needed to get approval, to document and to build, with significant cost savings to those developers.

The company started by developing software to manage an extensive supply chain for fixtures and fittings from around the world, particularly China, then added a factory in Phoenix making roof trusses, cabinets, wall panels, and other elements. In September 2017 it announced plans to build a  factory that will make panels of cross-laminated timber (CLT), a high-tech structural wood.

Initially, buildings were designed by outside architects, but in 2016 the company started a design division. In 2018, five months after raising another $865mn led by SoftBank’s Vision Fund, Katerra acquired Michael Green Architecture and architects Lord Aeck Sargent. Since then Katerra has acquired lighting manufacturer Shanghai Dangoo Electronics, precast and prefabrication company KEF Infra, engineering firm Equilibrium, and general contractors United Renovations, Fields Construction Co., Bristlecone Construction, UEB Builders and Fortune-Johnson. Expected revenue this year is between $2 billion and $3 billion.

One of the company’s three founders is a multi-family developer, and his projects provided the initial pipeline of work that made the company viable, and a second founder has a tech venture capital fund. The third founder and CEO is Michael Marks who, after revolutionising electronics hardware manufacturing and a stint at Tesla, raised nearly $2 billion in capital. Their ambition is to leverage new technologies to transform building by linking design and production through software, and their strategy now appears to have four legs.

First, modular construction using CLT is what Katerra has become known for, and there are now two multifamily building platforms. The company has two mass-timber factories in California and Washington respectively, the latter the largest CLT manufacturing facility in the US, with another in Texas due next year. Three more factories are planned in India, where Katerra does precast concrete. All structural components are standardised.

However, Katerra is moving on from structural components to fittings and finishes. Katerra plans to outfit its buildings with Katerra Energy System (KES), a proprietary energy and mechanical system, an intelligent power-metering and distribution platform, and KTAC air conditioners, while delivering Katerra Windows from their factory to site in one week. There is a new line of bathroom kits and interior fixtures and finishes under the brand name Kova, with carpet, tile, plumbing fixtures, hardware, wood trim, light fixtures, light sources, and mirrors, as well as a curated line of products called Kova Select.

Third is operations and maintenance services to maintain mechanical and prefabricated systems. Katerra will contract these out but be responsible, because their mechanical and electrical systems talk to the cloud and an operating center gets notified if there’s a problem. This will get the IoT into buildings.

Finally, another significant development for Katerra is a software platform called Apollo. Initially building designs were done in Revit and then the files converted to a different format for machines in the factory. Apollo integrates six functions:

1.       Report uses an address to find site information, zoning, and crime rates etc.;

2.       Insight focuses on design with the two building platforms;

3.       Direct is a library of components used in the building;

4.       Compose is a used for coordination between the different groups working on a project;

5.       Construct is for construction management (similar to Procore and Bluebeam):

6.       Connect is a way of managing the workforce on a project, a database of subcontractors.

At this point, Katerra may be the lead disrupter in building and construction. They have the most fully developed view of integration of the site and supply chain, and are creating a platform for project development and delivery that could become one of the major, widely used systems across the industry. If Apollo works as advertised in linking design and building, it will move well beyond the current focus on document control and communication of software from Oracle Aconex, Trimble Connect, Procore and SAP Connect, and is one model of what second generation PM systems look like.

Interviews with Michael Marks:

Rob Sobyra from Construction Skills Queensland and Michael Marks discuss Katerra:

https://soundcloud.com/csqsounds/csq-edge-interview-with-michael-marks

There is an Australian series of podcasts on engineered wood, including another 2019 interview:

https://www.woodsolutions.com.au/podcasts/timber-talks-series-2

Digital Twin as a Service

In what may another big step forward toward a platform for Construction 4, Bentley Systems and Topcon Positioning Systems have a new joint venture company, Digital Construction Works, to provide digital automation, integration, and ‘twinning’ services to constructors. Bentley and Topcon have been working together since 2016, collaborating on surveying, modelling, scheduling and logistics, work packaging, machine control, and progressive assurance for construction. In 2017 they opened Constructioneering Academies, to further the automation of digital construction through surveying, engineering design, model development and as-built data collection.

The company will ‘embed’ people in contractor’s organisations to act as what I’d call a project information manager, taking some of the responsibility for managing digital work flows off contractors and PMs and maintaining the digital twin of their project. One can see how this could be a successful model for construction. For SMEs in particular, who generally do not have much digital competence, this type of platform may be important, possibly necessary, as clients increasingly require BIM capability from contractors and suppliers.

Digital Construction

A recent paper in Construction Management and Economics examines three San Francisco firms: DPR construction, RAD Urban, and Project Frog. The case studies describe the strategic evolution and restructuring of firm boundaries five years, to enable greater adoption of digital manufacturing. Each firm has developed a different approach: relational, project-based spinoff; vertical integration; or digital systems integration. These approaches are theorized as a form of strategic mirror-breaking intended to redefine the current paradigm of knowledge and task dependencies. They enable the firms to develop products with new system architectures and access more opportunities for innovation in digitally-enabled manufacturing. In a “mirroring trap” incumbent firms resist organizational change: “the knowledge about design, engineering and construction are deeply embedded in specialty firms and their employees’ individual actions. In other words, knowledge about tasks has become tightly aligned with the task dependencies themselves.”

DPR and RAD have both developed in-house systems prefabricated of walls, building factories and managing workloads in interesting but rather conventional ways. DPR has three product lines: a load-bearing structural panel system, exterior wall panels, and interior wall panels with MEP systems.

In 2016 Project Frog moved to a strategy of mass customization: “They transitioned away from modular construction toward a flexible kits-of-parts called their “Frog Kit.” Using the principles of mass customization, Project Frog developed a web-based configuration platform called myProjectFrog. The configuration platform draws from a library of Frog Kit parts designed in Autodesk Revit. Using heuristic rules for design and assembly and the logical constraints of shape grammar, myProjectFrog enables designers to manipulate building design on a standardized grid.”

By coordinating and integrating product design and production from digital-manufacturing suppliers, and the development of a platform which “integrates a product-ready supply chain”, where they provide the core infrastructure of digital integration but other firms participate, Project Frog hopes to build an industrialised construction ecosystem, with these partners developing the products Project Frog inputs into their platform.

Hall et al. conclude with the importance of platforms: “One proposition is that future platform development will tend to be open or closed, depending on the level of vertical integration for the firm. Open platforms will be developed by digital systems integrators such as Project Frog. These firms will develop the platform core and leverage the principles of industry 4.0 to organize the periphery into new digital ecosystems. Closed, internal platforms will be developed by vertically integrated firms such as RAD. These firms gain advantage from total control of system architecture

and the ability to push the limits of technical change.”

They also note: “The start-up Katerra can make an interesting deviant case as a vertically-integrated company that began with a closed product platform but has recently positioned its Apollo Construct software platform as a hybrid between open and closed ecosystems.” The research the paper is based on was done in 2016-17. In 2018 Project Frog released KitConnect, bringing together a decade of development into prefabrication and component design, and integrating BIM with DfMa and logistics.

 

Daniel M. Hall, Jennifer K. Whyte & Jerker Lessing (2019): Mirror-breaking strategies to enable digital manufacturing in Silicon Valley construction firms: a comparative case study, Construction Management and Economics, DOI: 10.1080/01446193.2019.1656814.

Venture Capital in the Built Environment Sector

Also just out is a report from EY’s Global Real Estate, Hospitality & Construction team Venture Capital Funding Points to the Hottest Concepts in Built-World Tech. Since 2015, US$75.2b has been invested in built-world tech by venture capital (VC), in the first three quarters of 2019 US$24.6b was invested.  EY calls built-world tech a subset of the more than 7000 private real estate tech firms globally that have received a combined $US155 billion in funding over the past three years.

 

Interestingly, their view is not about disruption and new business models. They say “built-world tech has evolved as start-ups have focused on finding solutions to some of the greatest challenges facing traditional operators, thereby complementing rather than redefining their businesses. Moreover, these start-ups are increasingly focused on cost-saving and profitability, which will enhance the return on investment.” 

 

Construction is one of the eight sectors they include in their built world, but there are companies in the Visualization and IoT sectors with relevant products. The two biggest sectors by far are Real estate and finance and Flexible work space, and four of the eight are property focused. Three others are construction, IoT and smart buildings and visualization, and all these sectors are inside the built environment sector (BES).  EY notes many companies are blurring the lines between IoT, visualization and data and analytics. Companies are named but not discussed in the EY report.