Construction as a Mature Technological System

Technology and industry structure

An industry with a deep layer of specialised firms that form a dense network of producers, suppliers and materials was called a ‘technological system’ by Thomas Hughes:

Technological systems solve problems or fulfill goals using whatever means are available and appropriate; the problems have to do mostly with reordering the physical world in ways considered useful or desirable, at least by those designing or employing a technological system (Hughes 1987: 53).

Hughes was an engineer and historian of technology, who saw technology as “craftsmen, mechanics, inventors, engineers, designers and scientists using tools, machines and knowledge to create and control a human-built world”. Technological systems are, for Hughes, the key to understanding technological change. He studied the development and evolution of electric light and power between 1870 and 1940, and wrote a history of the industry. He saw these large, modern technological systems evolving in a loose pattern: “The history of evolving, or expanding, systems can be presented in the phases in which the activity named predominates: invention, development, innovation, transfer, and growth, competition, and consolidation”. As systems mature, they acquire style and momentum.” (Hughes 2004: 65).

When viewing the construction industry as a technological system, the age of the system is the most obvious feature. Most of the various elements of the modern industry came together over the nineteenth century, pushed along by ever larger and more complex projects building canals, roads, bridges and tunnels, railways, factories, offices and housing. During the 1800s the world was urbanising as population rapidly increased and major cities attracted migrants and businesses. In the second half of the century heavy industry and manufacturing spread around the world, from England and Western Europe to America then Japan. New industries needed new types of buildings, typically larger, higher and stronger than traditional methods and materials could provide. Bowley (1966) for the UK and Fitch (1966) for the US are well known histories.

It’s a remarkable fact that the building and construction industry we have today is a technological system that has been developing for 150 years. As a mature technological system, this can be expected to be in many places a quite concentrated industry, run mainly by finance and management types, and having a high degree of technological lock in due to the age of the system. Many of the industry’s global leaders are well-established, Bechtel for example is over 100 years old, and others like Hochtief, Skanska, and AECOM can trace their origin stories back over a similar period. Shimizu is over 200 years old.

Building and construction as an industry cluster has quite different characteristics to the industries studied by Thomas Hughes, and how the modern form of the industry developed over the twentieth century is another interesting story in its own right. The most obvious difference to the industries used as examples by Hughes is the size and diversity of building and construction, because statistics on the industry includes the enormous number of firms and people engaged in the alteration, repair and maintenance of the built environment as well as contractors and suppliers for new builds. The broad base of small firms is a distinctive feature of the overall construction industry as we define it. However, the part of the industry that is engaged in delivering projects (that is, part of a problem-solving technological system) is made up of larger firms than this long tail of small, typically family-owned, businesses.

With industrialised production, prices of manufactured goods decline over time as economies of scale and scope kick in, and over time those cheaper prices allow new technologies to spread and find new uses. Moore’s Law and the price/performance relationship of computers is athe best known example. An example of this price effect in building and construction was machine-made nails. Originally nails, like everything else, were hand made, and in fact were more expensive than screws, “but by 1828 the cost was down to 8c per pound [two kilos] and in 1842 to 3c. Dimensioned lumber and cheap nails made possible a whole new order of speed and economy in wood framing.” (Fitch 1966:121). Combining these two innovations a new system of building known as the ‘balloon frame’ came out of Chicago in the 1840s, and with nailed light timber frames two people could do the work of twenty using traditional methods. This very large increase in productivity came from two relatively simple innovations that, together, had a major impact. Balloon frames were sold in catalogues in many styles, and were used to build the new railway towns and suburban housing spreading across America over the following decades. This highlights the importance of understanding how a combination of new innovations within a technological system is often more significant than the individual new technologies themselves.

This also highlights the fact that the single most important factor in technology uptake is the price/performance relationship, or the gain in productivity or other measure (time, quality, safety, choice) the new technology delivers for a given level of investment. To successfully displace an older technology a new technology has to provide an overwhelming economic advantage to overcome the inbuilt conservatism of an existing industry, due to the investment by incumbents in the current system.

Between 1800 and 1900 there were a series of technological shocks to building and construction, as the new materials of iron, glass and concrete opened up opportunity and possibility for designers, for both what was built and how it was done. Iron and steel divorced the building frame from the envelope between the Crystal Palace in 1851 and the rebuilding of Chicago after the Great Fire of 1871, and with the separation of the frame from the envelope came mass produced infill materials to replace load-bearing construction. Then the combination of steel and concrete made possible the development of reinforced concrete and steel skeleton structures. Both ‘building art and the art of building’ were transformed, not once but several times, over these years as the methods of industrialised building with iron, steel and reinforced concrete were refined.

Over the 1800s the increasingly widespread use of concrete had changed its status from hobby or craft to a modern industry, as scientific investigation into its material properties revealed its shear and compressive characteristics. With the development of reinforced concrete there was change in architectural concepts of structures and approaches to building with concrete. The industrial standards of concrete technology influenced ways of thinking based on building systems and standardized building elements, and became identified with what was known as the Hennnebique System, a simple to use system of building with reinforced concrete columns and beams patented in 1892. According to Pfammatter (2008), by 1905 this system had spread across Europe and elsewhere, and Hennnebique’s company employed 380 people in 50 offices and had 10,000 workers. Concrete then set the agenda for the development of the construction industry as a technological system over the next hundred years, driven by the modernist movement in architecture, which explored the possibilities of these materials, and the increasing height and scale of buildings.

In these examples the relationship between technological change, conceptual thinking and organisational form is clear. While the striking thing is the interrelationship of these three aspects, the driver of these changes is technology, or more precisely new technology that fundamentally changes existing industry practices and delivers a shock to the existing system. With the advent of iron-framed and reinforced concrete buildings the construction industry had to not only master the use of these new materials, but also develop the project management skills the new technology required. That organisational change, in turn, was based on the deeper change in the way of thinking about the world that was fundamental to the industrial revolution and the invention of the scientific method (Landes 1972).

So, why would be experience of the industry over 100 years ago be relevant today? There are two parts to the answer. The first is that the nineteenth century is the only other period of disruptive change we have for comparison. The second is that the effects of technological change on industry structure and performance might plausibly again be in the same key areas as the organisation of projects and the mechanisation of processes, but in the twenty-first century these effects will be heightened and quickened by the network effects associated with digital platforms and artificial intelligence. Because industry structure (the number and size of firms) is fundamentally determined by technology (Sutton 1999), the emergence of new technologies and periods of rapid change can lead to new industries, but can also extensively restructure existing industries (Kamien and Schwartz 1982).

The construction technological system is extraordinarily wide and diverse, and the various parts of the digital construction technological system are in various stages of development. There are very many possible futures that could unfold over the next few decades. However, it is clear that the key technology that underpins these further developments, and upon which new combinations of technology will be based on, is intelligent machines operating in a connected but parallel digital world with varying degrees of autonomy. These are machines that can use data and information to both interact with each other and work with humans, and importantly this digital world will be one designed and built by humans. We are at the point where intelligent machines are moving from operating comfortably in controlled environments, like car manufacturing or social media, to unpredictable environments, like driving a car or truck. In many cases, like remote trucks and trains on mining sites, the operations are run as a partnership between humans and machines, as the saying has it “running with the machines not against them”.

The impacts of new technology on a mature technological system like the construction industry are generally thought to be gradual, changing industry practice over time without significantly affecting industry structure or dynamics. There are good reasons to think this may be wrong because of the current surge in advances in machine learning and the broadening potential of AI. A period of rapid restructuring of the industry similar to the second half of the 1800s may be about to start, when the new materials of glass, steel and reinforced concrete arrived, bringing with them new business models, new entrants and a greatly expanded range of possibilities. In the various forms that AI takes on its way to the construction site it will become central, in one way or another, to all the tasks and activities involved. In this, building and construction is no different from all other industries and activities, but the path of AI in construction will be distinct and different from the path taken in other industries. This path dependence varies not just from industry to industry, but from firm to firm as well.

The full conference paper Construction as a Mature Technological Sysytem can be downloaded here or read on ResearchGate here.

 

Two Reports on the Future of Construction

Construction Scenarios: AI and Technological Opportunity

In one of those interesting accidents of timing, reports from the two leading management consultancies on the future of construction were released within days of each other. These are briefly summarised below. Also, some quotes from interviews with people on new technology and their projects, with some comments and observations to close.

From management consultants McKinsey comes the latest in their series of reports on technology and construction, this one titled Artificial Intelligence: Construction Technology’s Next Frontier, the first major publication specifically on the industry-wide implications of AI that I know of. This is one of a series of recent papers on AI, automation and infrastructure.

The World Economic Forum and the Boston Consulting Group released their Shaping the Future of Construction report in 2016, with some interesting examples of frontier firms. They have published a scenario analysis as the second, final step in their Future of Construction project, which has involved people from industry and researchers from a wide range of organizations. The three Future Scenarios they describe make technological context central to the future form of the industry.

As an adjunct to these two reports, the views and comments by the managers in their interviews in Infrastructure Intelligence’s Toward Digital Transformation provide a nice counterpoint to the somewhat stilted language found in management consultese. All three were published simulaneously and contain a lot of boilerplate about change management, agility, recruitment and talent management but, despite the importance of organizational structure and the development of skills if you want to compete for the future, this is not discussed here.

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McKinsey identifies five AI-powered applications, and use cases that have already arrived in other industries, that can be applied to construction. This is a practical approach that seems to target major contractors, and is a different approach to previous reports that could have been primarily intended for public sector clients. McKinsey has been seriously developing their infrastructure practice for some years now, positioning themselves for the global infrastructure boom they forecast over the next few decades. The five industry applications are:

Transportation route optimization algorithms for project planning optimization;

Pharmaceutical outcomes prediction for constructability issues;

Retail supply chain optimization for materials and inventory management;

Robotics for modular or prefabrication construction and 3-D printing;

Healthcare image recognition for risk and safety management.

Each of these has a short discussion with some nice examples of crossover potential. They are all plausible extensions of current technology, and in robotics, 3-D printing and drones leading construction firms are already well advanced. Using AI for optimization is obvious, but it is just as likely construction contractors will be using logistics firms to manage transport and inventory as they are to invest in the hardware and software development needed. The question is whether this makes a convincing case for using AI in construction, or whether these are the pathways into construction for AI, or the only ones.

McKinsey also looks at some machine learning algorithms that are more relevant to contractors, and briefly assesses their potential engineering and construction applications. Despite their extensive reporting on BIM elsewhere there is no discussion of the potential use of AI in design and engineering, or in restructuring processes. They do have a good, generic framework for types of machine learning, and they suggest algorithms will be useful for:

Refining quality control and claims management

Increasing talent retention and development

Boosting project monitoring and risk management

Constant design optimization

And then there’s this:

industry insiders need to look beyond sector borders to understand where incumbents are becoming more vulnerable and to identify white space for growth. Both owners and E&C firms can explore nontraditional partnerships with organizations outside the industry to pool advanced R&D efforts that have multiple applications across industries.

Not coincidentally, McKinsey might be able to arrange introductions and facilitate ‘exploration’ and, like many McKinsey papers, this one reads a bit like a catalogue. However, where the previous reports in this series have emphasised industry problems, using consolidated industry data from their client base, this one is full of solutions. While some of these may be solutions looking for problems there are, nonetheless, many acute observations in this paper on the range of possibilities AI will offer in the near future. They have put out a stream of reports on AI over the last few years.

This is a short paper and light on detail. If McKinsey has a more interesting story to tell on pathways for AI into construction it might look something like the scenarios depicted in the WEF/BCG paper. They use the term Infrastructure and Urban Development Industry (IU) to describe what I call the Built Environment Sector:

The scenarios depict three extreme yet plausible versions of the future. In Building in a virtual world, virtual reality touches all aspects of life, and intelligent systems and robots run the construction industry. In Factories run the world, a corporate-dominated society uses prefabrication and modularization to create cost-efficient structures. In A green reboot, a world addressing scarce natural resources and climate change rebuilds using eco-friendly construction methods and sustainable materials. It is important to keep in mind that the scenarios are not predictions of the future. Rather, they demonstrate a broad spectrum of possible futures. In the real future, the IU industry will most probably include elements of all three.

Each scenario is used to extrapolate implications for the industry, identifying potential winners from technological transformation, and the range of examples and ideas shows the value of such a widespread collaboration between industry, government and academia. The WEF does not say how far into the future they are looking, although it seems a fair bet that it is a lot further than McKinsey.  

Building in a virtual world

Interconnected intelligent systems and robots run IU

Software players will gain power

New businesses will emerge around data and services

Factories run the world

The entire IU value chain adopts prefabrication, lean processes and mass customization

Suppliers benefit the most from the transition

New business opportunities through integrated system offerings and logistics requirements

A green reboot

Innovative technologies, new materials and sensor-based surveillance ensure low environmental impacts

Players with deep knowledge of materials and local brownfield portfolios thrive

New business opportunities around environmental-focused services and material recycling

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What to make of all this? Scenarios can be useful thought experiments, but by their nature are limited because the futures they depict are typically extensions of the present. Tomorrow will be like today, only more so. And saying AI will be important in the near future is not particularly insightful, although for some construction managers may be necessary. Some, however, are already working with digital-twin projects and restructuring around technological opportunity, as the quotes from Infrastructure Intelligence’s Digital Transformation interviews below indicate:

London’s Crossrail and Malaysia’s Mass Rapid Transit Corporation are two examples that show how “visionary transportation owners and supply chains are embracing digital technology”, ”moving beyond 3D modelling and 2D deliverables to enable handover of digital as-built information to operations.” Steve Cockerell – Bentley Systems

“BIM Wednesdays, where each Wednesday we got together in a location or had people Skype call in and view models on smartboards. This meant that when we got to the point of submission we had collectively resolved all the issues”. Mert Yesugey – Mott MacDonald

“Not knowing where to start is something we hear often. Just being so overwhelmed with all the technology that’s available and all the workflow processes. The lessons that we’ve learned are you must start small with tangible pilots and attack one part of the workflow at a time, implement technology, create a feedback loop and be able to measure what’s working and what’s not.” Sasha Reed – Blackbeam

David Waboso of Network Rail on procurement based on whole of asset life and outcome based contracts, focusing on in-service performance and outputs. An example is Resonate’s “Luminate” digital train management system, “a novel form of contracting that needs only a small upfront investment and is based a shared benefits agreement whereby the supplier will be rewarded if the new system delivers performance improvements and a corresponding reduction in delay compensation payments.”

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So where is the industry at in regard to technology take-up, now that there is widespread recognition of the reality of a digital future? Will construction industry development over the next decades absorb the impacts of new technology and be gradual, changing industry practice over time without significantly affecting industry structure or dynamics? Given the entanglement of economic, social, political, and legal factors in the construction technological system this might be the case, however there are good reasons to think this may be wrong. Machine learning, AI, automation and robotics are an interconnected set of technologies that are evolving quickly, enabled by expanding connectivity and the massively scaleable hardware available today.

If we think of the structure of the industry as a pyramid, there is a broad base of tradesmen and small firms at the bottom, followed by a deep layer of medium sized firms, and a small top section with a few large firms. Those large firms and some of their clients are clearly on the technological frontier, and their investment in capability and capacity should deliver significant increases in efficiency and productivity, and probably scale. Some medium-size firms are also making these investments, and also have access to technologies like algorithmic optimisation, platform-based project management, robotic, VR and AR applications and so on. The WEF/BCG Shaping the Future of Construction report, which is now nearly two years old, included many snapshots of what a range of firms at the frontier were doing, and some are in the table below. These sort of examples are missing from McKinsey’s high level analysis, and reflect the diversity of the industry beyond McKinsey’s potential client base.  

Shaping the Future: Technology, materials and tools in 2016

Company	Example
Fluor (US)	has built up an internal team of experts on concrete to advise the client at an early planning stage, to develop a foundation of data based on experience and to create a convincing business case for greater use of innovations (such as 50%-faster-curing concrete) in the market.
BASF and Arup (Europe)	have jointly developed an app for architects, engineers and project owners to calculate the energy savings achievable from the latent-heat storage system Micronal.
Skanska (Swedish)	has developed a new construction concept known as “Flying Factories”, which are temporary factories set up close to construction sites; they apply “lean” manufacturing techniques and employ local semi-skilled labour. The advantages include a reduction in construction time of up to 65%, a halving of labour costs and a 44% improvement in productivity.
Broad Group (China) with ArcelorMittal (India)	is using a system of modular building components that enables very speedy construction: a 57-storey building was built in 19 days by moving 90% of the construction work to the factory.
Komatsu (Japan)	is developing automated bulldozers incorporating various digital systems. Drones, 3D scanners and stereo cameras gather terrain data, which is then transmitted to the bulldozers; these are equipped with intelligent machine-control systems that enable them to carry out their work autonomously and thereby speed up the pre-foundation work on construction sites, while human operators monitor the process. On mining sites, autonomous haul trucks are already in common use.
Win Sun (China)	has been building 10 houses a day by using 3D-printed building components, and has concluded a deal with the Egyptian government for 20,000 single-storey dwellings leveraging this technology.
Skanska	and its partners are pioneering the wireless monitoring of buildings, using sensors to record data (such as temperature and vibration), and wireless equipment to store and transmit this data. Data analytics are applied to determine the implications of any changes in the sensor readings. These smart-equipment technologies have the potential to reduce unexpected failure by 50%, improve building-management productivity by 20-30% thanks to less need for inspections, and improve the building’s energy performance by 10% over its lifetime.
Atkins	has implemented advanced parametric design techniques for detailed design “optioneering” in the water infrastructure industry. That has made it possible to provide 22 design options in one day, a 95% time improvement on traditional design methods for similar results.
Arup	combines various data-collection methods, including mobile surveys, security-camera footage and traffic-flow reports, for improved decision-making in the design of residential projects.
Skanska	is developing a Tag & Tack system, pioneering the use of radio frequency identification (RFID) tags and barcodes on products and components in construction projects for real-time monitoring of delivery, storage and installation, the new system is achieving reductions of up to 10% in construction costs.

Source; WEF

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.

A period of technology-driven restructuring of the building and construction industry may be about to start, similar to the second half of the 1800s when the new materials of glass, steel and reinforced concrete arrived, which led to new methods of production, organization and management. There are many implications of such a restructuring. Some firms are rethinking their processes in response to developments in AI, robotics and automation as capabilities improve quickly and the range of new products using these technologies expands. Many firms, however, are not. Meanwhile, frontier firms are exploring new tech and pushing the boundaries of what is possible, and are inventing new processes.

Other relevant posts:

Construction’s three pathways to the future here

WEF Shaping the future of construction here

BIM is essential but not transformational here

Technological diffusion takes time here

Disruptive change in construction here

Frontier firms in construction here

Construction's Three Pathways to the Future

Technological Trajectories

Over the last few decades there have been many scenarios for the future of the building and construction industry, often with titles like Construction 2000, 2020 or now 2030 or 2050, usually with a list of major trends expected to impact the industry. The list typically includes more data and associated computing technology, new materials and equipment, more education and training, less carbon and more sustainability and so on. For many of these items there have been a variety of roadmaps produced, providing very specific steps in developing a particular form of technology or process. Many scenarios emphasize the industry’s linkages to the rest of the economy and society. An interesting recent scenario analysis for Australian construction was covered here.

What often seems to be missing from the discussion in those sorts of exercises is an appreciation of how an industry as large and diverse as building and construction actually adopts and implements new technology. While it’s obvious that the industry as a whole is not going to be overwhelmed by some sudden mass movement to adopt some particular technology, whether it be steel reinforced concrete or BIM, the rapid pace of technological change is affecting construction. Like other industries there is potential for new entrants, new business models and great disruption.

It seems that there are three plausible pathways for how industry processes and structures might change over the next few decades, in the sense of technology adoption and implementation pathways. These might be called the business as usual, upgraded and modified, and transformed scenarios. 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 of firms within those three pathways.

The business as usual pathway is the slow accretive method that has been followed by the industry for decades, if not centuries. This is 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 is, again for the circumstances of the particular project and those involved.

This is not a static process. I’ve argued elsewhere against the idea that building and construction is a technologically stagnant industry. The reality is that building and construction is the recipient of vast amounts of new technology from its traditional suppliers in the plant and equipment and building materials industries, and is increasingly IT intensive. The extraordinary growth of offsite fabrication in all its forms indicates the industry is quite willing to move to a new technological platform, but that platform has to be well proven before it becomes widespread.

Also, there are a limited number of projects that reward the investment of time and capital needed to develop and implement new technologies and new processes, and to overhaul organizational forms. In this case it is not always sensible, from a business point of view, to try and be on the cutting edge of technological developments. Nevertheless, offsite fabrication has already changed parts of the industry, the return on investment in BIM is generally positive, and the increasing sophistication of project management and integration software is opening up new possibilities and organizational forms.

Pathway 1: Business as Usual - Similar But Smarter

• BIM integrates project development and delivery. Clients get procurement systems right, or at least less wrong, which drives efficiency and productivity improvements.
• Modular and pre-fabricated components become universal and more complex, and many structural elements are standardised. Services become more integrated and building management systems become increasingly capable. 
• Project management becomes much more information intensive and sophisticated, and techniques like target costing, last planner, tiered suppliers and so on become widespread.

The difference between the business as usual and the upgrade and modified pathways is the rate at which firms adopt new tech. There will be a widening divergence between firms that are comfortable with business as usual and firms looking for ways to create or sustain their market position. Again this might be as much about circumstances, where the opportunity presents itself firms would be expected to upgrade. The many YouTube videos of concrete printing and other 3D printed components, or carbon-fibre bridges, girder-laying robots and such, show just how nascent this technology is, with an intriguing mixture of backyard inventors, universities and multinationals involved. Drones are everywhere, and microsats are also offering site monitoring.

In the upgraded and modified pathway firms invest considerably more in technological development. In the course of upgrading to these new technologies firms might need to make significant changes to the way they are organized and the way they organize their projects. To really leverage the investment and get an advantage from the technology, whatever it is, usually requires modification of existing business processes, and depending on how the business approaches the task these modifications could be extreme or could be at the margin. Some businesses are much better at this than others.

There are many different firms in the industry, and many big firms have clearly developed technological areas of expertise, that they build their business around, such as tunneling, or remote sites or bridge building. Chinese firms like Win Sun (3D printed components) and Broad Group (prefab high rise) call themselves technology companies not construction companies. Australian company Hickory Group also has its own factories producing modular components for its projects, going back to the integrated model of nineteenth century general contractors. Sekisui and Ikea have been doing this for a while.

Pathway 2: Upgraded and Modified - Manufactured Mass Customization

• Disruptive new entrants appear, with no historical baggage, who do not care about the traditional roles of industry professionals or suppliers. These firms do not work for clients but make products for their customers, in a vertically integrated supply chain.
• Their buildings are standardized platforms, built repeatedly and thus can be quick and cheap. Designed to be produced in a factory (which may be onsite) and assembled by a trained workforce, with a range of finishes and decorative elements to allow mass customization.
• New materials and production processes allow current boundaries of performance, size, function and design to be greatly extended. 
• Incumbent firms respond by moving up the value chain, developing their integration and PM capabilities and concentrating on larger and more complex projects that incorporate new tech like high performance materials, systems and services.

The transformational model is the extreme high-tech version of rapid and sustained advances across a broad front of key items. This is far more speculative, because the future is inherently unpredictable, of course, but the potential is there for some serious disruption. The two primary drivers of change are expected to be IT (both software and hardware, i.e. AI, automation and robotics) and new materials and production processes. At present, new tech is rapidly spreading across larger firms in the industry, but generally at the boundary of pathways one and two. However, in the near future breakthroughs are possible in digital mapping and surveying and 5D BIM, production process automation, advanced analytics, and the Internet of Things. Continued progress in molecular engineering and high performance materials, 3-D printing, real-time site data, communications, advanced robotics, roller press printing of smart materials and fabrics and many more technologies will feed into the industry over coming decades.

Pathway 3: Transformational - Faster, Higher, Stronger

• Science transforms building materials and production technology. The new products and materials are significantly stronger and lighter than existing ones. They create new opportunities for buildings that can be more distinctive, larger or higher than currently possible.
• The new production technology automates many tasks and processes and creates 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. Remote control of automated heavy plant and equipment becomes standard, while fabricated and modular components combine with automated systems and onsite robots to transform the building process.

What’s missing from the discussion here is any sense of the time-frame, however this too is entirely speculative. We’ve currently got elements of all three of these pathways in play, and the three will coexist across the industry as a whole for a long time. Because of the localized nature of building and construction there will still be large numbers of small firms in the industry for the foreseeable future, and those firms will generally follow pathway one.

One important issue will be how the broad mass of companies in the middle of the industry, the small and medium-size contractors of every sort, actually cope with the tsunami of new technology likely to descend over the next couple of decades. In every other industry which has become more capital intensive as technology develops, that industry has become more concentrated and the largest firms expand at the expense of mid-sized firms. This doesn’t mean we end up with a few giant construction companies, but it does mean that we are likely to see a far smaller number of, on average, larger firms across the industry. The effect of this change in industry structure should be fatter tails in the size distribution of firms.

The transformational pathway, by definition, does not have any current examples. The characteristics of the transformed industry might best be seen in what the industry produces, which would be smart and responsive buildings and structures. These are made of smart materials, which know their location, purpose and condition, run by smart operating systems that constantly monitor and control the building’s internal environment and systems, and have an energy efficient, self-repairing external skin. And the whole thing would have been delivered through some massively integrated management and manufacturing process that was entirely underpinned by digital data.

A recent publication on the Future of Construction page on advanced buildings shows how this trajectory is developing. This research by the Boston Consulting Group, a management consultancy, and the World Economic Forum, a multinational think-tank, is an ongoing project to promote cutting edge building technology in all it's forms. This new report  is Inspiring innovators Redefine the Industry, with six buildings and four flagship projects that demonstrate innovation in construction. As William Gibson pointed out (at a 1992 demonstration of the first clunky VR systems) “The future is already here, it’s just not very evenly distributed”.

 

https://www.weforum.org/agenda/2017/03/buildings-construction-industry-innovation