A
new general purpose technology (GPT) becomes the basis of a system of
industrial production. For the construction industry and the production of the
built environment, the emerging technologies collectively known as the fourth
industrial revolution* will be transformative.
Prior
industrial revolutions were driven by steam in the nineteenth and electricity and computing in the twentieth
century. Over this period the structure of the construction industry evolved
through three stages, first from mediaeval master builders and craft guilds to
contractors and tradesmen, then to the modern project manager-subcontractor
structure. Interestingly, the transition to steam and the end of the guild
system affected the organization of the construction industry far more than the
ones to electricity and computers. With electricity, the organization of the
industry evolved from contractors to project managers in a structurally, if not
contractually, similar production system. And electricity did not affect on-site
construction in the same way it did manufacturing, which needed to reconfigure
factory layouts, because on-site steam powered machines such as cranes and excavators were replaced
by petrol and diesel ones doing similar work. Computers and information
technology have restructured office work everywhere, and affected industries
like retailing, travel and entertainment far more than construction.
The
adoption of steam power was an earlier experience of technological disruption
leading to a restructuring of the construction industry. Steam
power was a new GPT and industrial materials fundamentally
restructured the industry from the craft-based industry of the eighteenth
century. Over the nineteenth century this led to the emergence of the architectural,
engineering and quantity surveying professions, and an industry structure of
contractors and tradesmen for production. The
three areas of construction that were transformed in the nineteenth century
were identified in the eight case studies by Peters (1996) as industrialization,
mechanization and organization:
1. Industrialization
of production methods with standardisation of components and mechanized mass
production, and the development of new materials like steel, plate glass and
plastics. This led to a new design aesthetic, with more modular components and
internal services, and separated the envelope from the structure. The
infrastructure of materials suppliers and equipment producers developed, and
scientific R&D joined the industry’s traditional trial and error approach
to problem solving.
2. Mechanization
of work based on steam power, with cranes, shovels and excavators common by the
mid-1800s. This in turn led to a reorganization of project management, with the
new form based around logistics and site coordination to maximise the
efficiency of the machinery and equipment.
3. Organization
of the modern construction industry was developing by the mid-1800s. Large
general contractors had emerged by the 1820s, undertaking projects on a
fixed-price contract often won through competitive bidding. This system of
procurement was supported by the new professions of architects, engineers and
quantity surveyors, which were
institutionalising in the early nineteenth century.
Automation and AI in the twenty-first century can
be expected to work along these dimensions, as the fourth industrial revolution
reconfigures them by linking data through the life of a project. The role of AI
enhanced, cloud-based platforms that integrate design, production and delivery
of components and materials with digital production technologies that allow
mass customisation will be significant in the production of components
and materials. Gershenfeld
(2017) argues digital fabrication will follow a similar exponential development
path as digital computers, with the number of fabrication laboratories (Fabs)
doubling every two years and their cost halving, making local production of
many objects and items possible. Gershenfeld, who founded the first Fab in
2003, suggests the technology is now ready to become widespread, at the stage
PCs were in the early 1990s. If this exponential growth eventuates, much of the
current construction supply chain based on mass-production of components might
become redundant. For example, an on-site or nearby Fab with printers and
moulders might produce many of the metal, plastic and ceramic fittings and
fixtures for a building.
For
mechanization, the characteristic changeability of construction sites is challenging
for automated and robotic systems, and it might take decades of investment for
machines able to do site work or for humanoid robots to do human tasks. In some
case a human supervisor operating a team of robots or several pieces of
equipment, each with limited autonomy, might work better. A worker with a smart
helmet could monitor these machines both on the project and in the site model.
Beyond site preparation however, there may not be many tasks left if site
processes are restructured around components and modules that are designed to
be assembled in a particular way, and machines to assemble those components and
modules can be fabricated for that purpose. For an industry with an aging
workforce there are exoskeletons for site work, a form of human augmentation beginning
to be used in the aerospace and automotive industries.
Digital platforms
providing building design, component and module specification, fabrication,
logistics and delivery will become widely used. Platforms provide outsourced business processes, usually cheaply
because they are standardized, and are available to large and small firms. Also,
platforms use forms of AI to monitor and manage the data they produce, the function
of intelligent machines. Examples are Linkedin (matching jobs and people),
Skype (simultaneous translation of video calls), AWS and other cloud-computing
providers, and marketing, legal and accounting software systems. If these digitised
business processes are cost-effective and become widely used, they can provide
much of the data needed to train machines as project information managers.
The BIM model of the project, which might be
outsourced, can link the design and fabrication stages to the site and the
project. In 2019 the
International Standard 19650 was released, providing a framework for creating,
managing and sharing digital data on built assets. Digital fabrication
produces components and modules designed to be integrated with on-site preparatory work and
assembled to meet strict tolerances. Project management would become more
focused on information management, and
the primary role of a construction contractor could evolve into managing a new
combination of site preparation work and integration of the building or
structure with components and modules, some of which may be produced on-site in
a Fab if economies of scale permit. In this case, the industry would, perhaps
slowly, reorganise around firms that best manage on-site and off-site
integration of digitally fabricated parts. With outsourced business processes
and standardized site and structural work, that would be a key competitive advantage
of a construction firm. Firms would become more vertically integrated if they
become fabricators as well, reinventing a business model from the past when
large general contractors often had their own carpentry workshops, brick pits
or glass works and so on.
Dimensions
of construction industry development
Technological
developments are combining intelligent machines with engineered materials, deep
learning capabilities, human augmentation and new organizational concepts, and
are pushing against established custom and practice in a mature technological
system. Because the system is mature the effect of new technology and the
changes it brings could spread slowly across the industry as a whole, and
unevenly because of the many small and medium size firms. While this was case
with twentieth century GPTs like electricity, a period of disruptive change in
the construction industry occurred during the second half of the nineteenth
century, and a new system of production eventually resulted in a new form of
industry organization led by contractors instead of architects and engineers.
That disruptive transition took several decades, as industrial materials
replaced craft ones and site work was mechanized and reorganized. Then, over
the twentieth century contractors evolved into project managers and the
traditional trades became subcontractors.
Large
contractors delivering major projects ended up at the core of the construction
technological system at the end of the twentieth century. By this stage the
technological system had a clear outline, and a very clear structure, for
bringing together the products, suppliers and materials needed for building and
engineering projects, and had stabilised around particular forms of procuring,
financing and managing those projects.
With
a technological trajectory for industry based on AI, digital fabrication and
associated emerging production technologies, the view taken here is that there
will be a transition period of perhaps a decade, possibly two, as the
commercial contracting part of the industry adopts these innovations. As that
happens the organization and structure of the industry will also change, from
one centred on project managers to one based on integrators that combine site
preparation with production and assembly of components and modules. AI as a new
GPT may be as disruptive as steam power in the nineteenth century, and lead to
a similar restructuring of the industry. Neither electricity nor computing had
a significant effect on the organization of the construction industry, because
the evolution of the industry from contractors and trades to PMs and
subcontractors was not driven by those technologies. However, the change from
master builders and crafts to contractors and trades was a break from the past,
and the result of industrialization and mechanization.
* This
imprecise concept has been popularized by the World Economic Forum,
following David (1990). Their description is: “The First Industrial Revolution
used water and steam power to mechanize production. The Second used electric
power to create mass production. The Third used electronics and information
technology to automate production. Now a Fourth Industrial Revolution is
building on the Third, the digital revolution that has been occurring since the
middle of the last century. It is characterized by a fusion of technologies
that is blurring the lines between the physical, digital, and biological
spheres.”
References
David,
P. A. 1990, The Dynamo and the Computer: An Historical Perspective on the
Modern Productivity Paradox, American Economic Review. 80, 355 - 361.
Gershenfeld, N. 2017. The
Science, and The Roadmap, in Gershenfeld, N., Gershenfeld, A. and
Cutcher-Gershenfeld, J. Designing
Reality: How to Survive and Thrive in the Third Digital Revolution, in New
York: Basic Books. 95-116, and 159-182. 