Four Scenarios
In 2016 a scenario analysis for the
building and construction industry in Queensland, Australia, was released.
Background info and the report are available here.
The scenarios describe “four plausible futures for Queensland’s construction
industry over the coming two decades, with a focus on impacts for jobs and skills.
Each scenario consists of a description of Queensland’s construction industry
in the year 2036, a narrative of how the scenario came about, and a commentary
on plausibility.” I substituted Australia for Queensland in the graphic, as this
is more realistic, but have left the scenario outlines intact.
Scenario 1: The Digital Evolution
This is a future where traditional tradies
and operators are in demand and highly paid. High-fidelity training simulators are
used to attract a ‘gamer generation’ and fast-track apprenticeships to address
skill shortages. A small number of progressive companies are managing capacity
constraints through using exosuits to retain older workers and cut costs due to
injury. Industry structure and practices have changed little but diffusion of
BIM and data analytics has driven improvements in efficiency, customer service,
product quality and workplace safety. Such steady improvements are enabling the
industry to compete internationally, and to adapt to cost pressures related to
scarcity of human capital and raw materials. Manufacturing of buildings and
building elements remains niche and relatively expensive, as only a few local
companies tap a small low-volume market. Heavy equipment/machinery is still
operated by humans with some autonomous functions to improve efficiency.
Industry
structure and practices have changed little but diffusion of BIM and data
analytics has driven improvements in efficiency, customer service, product
quality and workplace safety. Such steady improvements are enabling the
industry to compete internationally, and to adapt to cost pressures related to
scarcity of human capital and raw materials. Manufacturing of buildings and
building elements remains niche and relatively expensive, as only a few local
companies tap a small low-volume market. Heavy equipment/machinery is still
operated by humans with some autonomous functions to improve efficiency.
Being a cautious innovation culture means that people in the industry,
as well as their customers, don’t like surprises and shun failure. Construction
companies focus on delivering projects on their books, while the market gives
priority to proven products and methods, seeing traditional construction as a ‘safe
investment’. There is a lingering problem with waste from construction despite high
material costs, and the industry is in the bottom of the OECD in terms of
R&D investment and partnerships with the research sector.
Scenario 2: Smart Collaboration
The industry has not yet seen full automation
of repetitive, dangerous and physically demanding tasks, but Queensland is at
the forefront of experimenting with new solutions to make construction safer,
more materials efficient and productive. Living labs have been established to
enable R&D and deployment of new materials and tools to cope with an ageing
workforce, harsh climate and resource pressures. Queensland is home to a
globally renowned and coveted materials and building standards system.
Queensland’s strong early adopter market
pushes the industry to continuously improve and experiment with new products,
methods and tools. Traditional trades and professions persist but are in
decline, with the employment emphasis on new jobs based on digital literacy,
agile project management and prefabrication. Working with BIM, along with
augmented and virtual reality technologies, is a core skill across the industry
(akin to smart device use in 2016). Quality assurance and continuous
improvement roles are in demand. Workers develop modular skills and
competencies quickly through high-fidelity training simulators.
The workforce has fully embraced advanced
exosuits, which allow older workers to continue in physically demanding trades.
This technology has also allowed many women to participate in physically
demanding site-based work. While assistive technologies have deskilled manual
jobs, they have allowed job rotation possibilities for office-based
professionals and managers who seek new experiences and insights of the
construction process; a practice that fosters natural curiosity among
construction workers. New opportunities for improvement and innovation are
constantly cropping up; innovation management is a core competency, with most
companies maintaining an innovation register, and running trials and
experiments across a portfolio of projects.
Wide adoption of online peer-to-peer
platforms in the industry with embedded ranking systems has been driven by
consumers, and has all but eliminated ‘cowboys’ in the industry and boosted the
quality of construction work done, especially in the maintenance sector. Foreign
companies have invested in the Queensland industry in an effort to acquire new
capabilities and innovations. The state’s industry has a global reputation for
operating with integrity and for ‘shared benefits’. Communication skills and
collaboration across disciplines and ethnicities is a strength, and foreign
partners value the egalitarianism that is widely evident in the state. The
industry is at the top of the OECD in terms of R&D investment.
Scenario 3: Globally Challenged
This scenario sees Australia struggling
economically. The country has fallen behind the global transformation of
construction, characterised by widespread adoption of advanced manufacturing
techniques and smart robot technology. Overseas entrants are dominant in the
Australian market, which is struggling with a high cost base. An Asian company
is Australia’s number one home builder.
Some Australian companies are outsourcing
large components of projects to overseas fabricators to stay competitive with
new entrants. This survival strategy, along with a short-term project focus,
means that important strategic decisions are overlooked. Many Australian
companies are either being bought out or are going out of business. Newspaper
headlines tell the story of an industry in decline (much like headlines about
the Australian auto industry in 2016). The workforce is a mere 10% of what it
was in 2016. High unemployment is being addressed through extensive (albeit
reactive) retraining programs to improve job prospects for vast numbers of
workers.
The giants of construction are Japanese,
Korean and Chinese corporations that were preeminent car manufacturers of the
late 20th and early 21st centuries. While robots are not allowed on site in
Australia, most building and infrastructure delivery is carried out remotely by
highly automated facilities in Southeast Asia, and then assembled on site by
foreign workers with corporate training certifications (e.g. Toyota certified
technician). Dramatic cost breakthroughs are enabling home buyers and asset
owners in Australia to acquire high-quality buildings and infrastructure within
available capital constraints
Wages of
the remnant industry have plummeted from the highs of the early 2000s.
Automated recycling of old buildings and low cost for new builds has confined renovation
activity to heritage-listed buildings. The depressed economy and low-cost real
estate and wages in Australia (and Queensland) is attracting some overseas companies
to invest in new production facilities as part of a global expansion. This
investment is bringing new opportunities for the old construction workforce to
pivot into technical jobs for agile manufacturing operations, and reinvigorating
domestic expertise in mass customisation. Associated niche industries are
emerging in ‘smart’ design to help home buyers and assets owners unlock the
potential of advanced manufacturing and digital technology.
Scenario 4: Rise of the Robots
The developing world, particularly
Southeast Asia, has been battling major natural hazard events and associated
impacts on vast urban populations. Australia has also been impacted by natural
disasters, but relatively low government debt has afforded the flow of funds
for reconstruction. With one of the world’s highest innovation rankings,
Australia is an integral part of a Southeast Asian-Oceania Union (akin to the
European Union), which is fostering coordinated responses to the crisis.
AI and robotics has transformed
construction globally, and Queensland is at the forefront of developing and
using this technology. The state’s construction industry is central to a
regional implementation of smart robots to natural disaster hit areas. Living
labs are dotted around the state, testing and evaluating new generations of
disaster recovery and reconstruction robots, and new sustainable and climate
adaptive materials and infrastructure. Queensland’s ‘climate resilience’
standards are globally respected. Know-how in sustainable and climate
resilience engineering is a significant export, along with new products and
services to support new and reconstructed cities.
Historical trades and jobs have given way
to a workforce of technicians and knowledge professionals in robotics
engineering and programming. Construction is a science with significant data
flows and real-time feedback to construction workers and clients. Enabled by
smart sensor technology, AI optimisation is offered throughout the design and
construction process, and beyond to the maintenance and operations of buildings
and infrastructure. Queenslanders are demanding early adopters, expecting the
most advanced, cost-effective, environmentally sustainable and
climate-resilient products. Restoration and renovation work is limited to
historical buildings; it’s far cheaper to demolish and recycle materials into
new, better performing buildings.
Queensland’s proximity to Asia, political
stability, strong innovation culture and high-trust environment is attracting
foreign investment and world-class scientists and inventors. As a cultural
melting pot, the state is also renowned for embracing and benefiting from
cultural diversity through an egalitarian approach in the workplace.
*
Building a scenario analysis around two key variables to produce two positive and two negative outcomes is a well-known technique.
They explain these as two spectrums of uncertainty and impact on construction jobs and
skills. “One of these spectrums is the extent to which task automation advances
over the coming decades. The other spectrum relates to the extent of the
industry’s willingness to embrace new technology – its willingness to adopt a
culture of innovation. Once these two spectrums are crossed, they define the
scenario space and lead to the development of plausible scenarios in each
quadrant.
Initiated by Construction Skills Queensland, a training organization,
the project bought CSIRO scientists together with 80 industry representatives
to develop the industry profile and technology trends used in the scenarios. Each
scenario has a specific political, economic and environmental context. The
industry input grounds them in current issues and perspectives but, on the
other hand, has limited the extent of possibilities considered to those within
the imagination of the participants. If there is a weak point in the analysis
it is the focus on trade skills, which of course reflects the project’s
sponsors’ concerns. The form and functioning of the materials suppliers,
manufacturers and professional services industries is not discussed, except in
the broadest of ways, despite the importance of the supply chain in the
construction technological system.
Nevertheless, this is an interesting set of scenarios. Scenario analysis
is part of the larger field of strategic management, so for firms and
organizations thinking about the future of building and construction these would
provide good starting material for a planning workshop.
