Construction is the largest industry in the global economy, accounting for 13% of the world’s GDP. Tight profit margins, poor project delivery performance, and low levels of customer satisfaction have plagued the industry for years. Now, with the global pandemic adding to these long-standing industry pressures, the time is ripe for this traditional sector to embrace the benefits of digital modernization. In fact, the COVID-19 pandemic has become a key catalyst for technology adoption—helping to take construction into the next digital age.
Construction companies were on the frontline during the pandemic, with the need for development of medical facilities and other essential infrastructure. But for an industry that relies heavily on manual labor and on-site workers, the sudden site closures, new safety measures and need for more remote employees presented significant challenges. Research suggests that the global construction sector decreased by 3.1% in 2020, its worst decline since the 2008 global financial crisis, but the problems didn’t stop there. Today, projects have resumed, but many are being impacted by global supply chain disruptions, worker shortages and skyrocketing material prices, particularly on lumber and steel. These issues are set to continue into the foreseeable future.
If there was ever a time for construction to modernize, it would be now. As sites begin to reopen and projects ramp-up, emerging technologies will be key to the industry’s recovery. According to McKinsey research, the mandate for change and technological adoption in construction has never been stronger, with the pandemic “only serving to provide additional urgency to the pre-existing productivity and data-visibility issues facing construction companies.”
For companies looking to adapt traditional processes and address long-term inefficiencies within the construction industry, the pandemic has been a critical tipping point. In particular, the digital innovations that have emerged from this crisis, such as the use of Internet of Things (IoT) sensors and robotic drones, will help companies improve health and safety measures, standardize modular construction, and create a more sustainable building environment.
First, use digital on-site touchpoints to prioritize workplace safety.
As construction companies complied with pandemic restrictions, technology became essential to the implementation of health and safety measures. For instance, firms can use wearables and AI sensors to detect when workers are not maintaining proper physical distance. Some construction projects are even using contact tracing devices that alert employees when there are too many personnel at a worksite and can identify potentially infected individuals in the event of a confirmed COVID-19 case. These measures not only prioritize employee safety, but also help companies avoid entire site shutdowns, ensuring both profit margins and tight project deadlines stay on track.
With usage tripling in 2020 alone, drones are also being used more frequently to improve mapping and surveying processes. With their advanced capabilities, drones can create a digital record of the site to inform project timelines—allowing all stakeholders to monitor progress safely, while also enhancing the accuracy, speed and ease of projects.Even remotely, technology is a vital asset to construction firms. With fewer personnel allowed on-site, companies can rely on new cloud-based video platforms to assist with site monitoring. For instance, in the city of Miami, virtual inspections of construction sites through either a Zoom or a Microsoft Teams video call are now routine between engineers on-site and building control officials.
Then, build in controlled environments with modular construction 2.0
Modern methods of construction offer many benefits over traditional options, and are a big part of why the industry was able to adapt during the pandemic. In particular, modular construction—the process of prefabricating modules and components or even entire homes in a manufacturing facility and then shipping to the site—allowed many construction companies to continue operations in a safe, secure and controlled way.
While this construction method is not new, the development of digital planning and production technologies has seen adoption rates increase as more companies look to remain operational despite pandemic restrictions.
Now you’re ready to lay the data foundation for a net-zero future.This ability to enable more standardization across the building process allows construction firms to actively address the serious productivity problems affecting the quality and delivery pace of construction projects. For instance, McKinsey predicts that offsite construction can increase the speed of construction by as much as 50% and reduce costs, if done in the right environment, by 20%.
As of late, customers have become more sustainability-conscious than before and are placing greater pressure on companies to reduce the amount of carbon embedded in new construction. However, it doesn’t stop there—consumers are also urging companies to support the growth of a deconstruction industry that reuses huge existing stockpiles of construction material. This task will not be easy as, according to the World Green Building Council, the building and construction sectors are together responsible for 39% of all carbon emissions in the world.
As recent McKinsey research suggests, the global conversation about climate change, exemplified by the implementation of UN sustainability targets, will compel construction companies and material suppliers to factor sustainability into their products, construction processes and designs. However, the fragmented and project-based nature of the construction sector creates additional challenges for the adoption of sustainable practices—and this is where technology can make a difference.
Smart buildings and infrastructure that integrate the IoT can increase data availability and enable more efficient operations as well as new business models, such as performance-based and collaborative contracting. For instance, companies can use IoT sensors and communication technology to track and monitor energy efficiency, and maintenance needs. With the use of BIM (Building Information Modeling), construction companies can create a virtual 3-D model with precise transparency on all components used in a completed building, which can increase efficiency. Technology is set up to be a key player in helping companies better manage building lifecycles and significantly reduce carbon footprints.
Companies throughout the construction ecosystem must change their strategies, business models and operating models to effectively manage the recent industry disruptions. The pandemic provided an opportune catalyst for industry-wide changes, but it’s up to construction firms to adapt and transition away from traditional processes.The mandate for technological change has been issued.
Only those construction businesses willing to use technology and transform how they work for the future—by fast-tracking digital transformation and optimizing digital skills to become more efficient—will be sure to stay ahead of the competition and outlast the pandemic and supply chain disruptions.