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”.
