Last week, I had the pleasure of sitting on a panel discussion that wrapped up the first Builtworlds Project Conference at the Hub at Grand Central Tech in New York City. (Many thanks to the Builtworlds team for the invite!) The conference featured speakers from the construction, proptech, and contech spaces demonstrating their companies and products, including Fieldwire, Unearth, Bluebeam, Siteaware, and OnSiteIQ, among many others. (It was also great networking. As a side note, you can read more about Builtworlds’ upcoming conferences and ongoing efforts to elevate the discussion around tech and construction here.)
Our panel – which included Thornton-Tomasetti CEO Tom Scarangello, Mancini-Duffy President Christian Giordano, and Binsky Snyder CEO Robert Snyder – aimed to answer questions about the future of the industry. What technologies will be most disruptive both in the short- and long-term? Where are our respective organizations seeing specific challenges and opportunities? In this article, I’ve outlined some of those questions as posed to the panel, and my own answers that I prepared.
Let us know what you think in the comments!
Which kind of technology do you see having the most near-term impact on industry productivity?
In my view, robots and blockchain platforms will have massive, long-term influences on the industry, but their impact in the near future will be limited to thought exercises much like this article. (In fact, many in the New York City construction industry, at least, seem to agree, although this particular robotics application was not discussed on our panel.) But in an industry with lots of risk and puny margins, anything that can be automated will eventually be automated – either with robots, software, or other technologies (like blockchain) that we can only currently imagine.
So, in the short-term, the lower hanging fruit will be two-fold: the proliferation of prefabricated/modular design and construction components (including virtual design components), particularly on functional, non-aesthetic projects like warehouses, fulfillment centers, and other vertical buildings where owners are less interested in control over the design, and collaborative software tools in the field that remove friction from previously manual processes like punch lists, lien waivers, and other schedule- and productivity-related tasks.
Indeed, some of the prefab construction tech startups we’ve covered here at AEC Labs have identified this explicitly as their value proposition. Parkd, in Australia, noted that it and its investors “see the constructiontech space as one of the most fertile for improvement through AI, manufacturing, logistics and supply chain disruption that would affect consultants through to main contractors. Other than car parking structures, one of the spaces [we] see a huge opportunity is in modular residential and modular industrial construction. Why use expensive traditional forms of construction for building car-park structures that are by nature a very functional and a non-aesthetic asset?”
Design firms are also increasingly trying to “digitize” their work flows in search of boosting margins; for example, reusing digital design components, transitioning to more digital workflows and approvals both pre- and post-award, and even implementing digital, 3D-, and/or drone-based data surveying techniques for certain clients. I see this trend, in particular, accelerating, as firms relentlessly push to reduce costs and boost margins.
Finally, the future of 3D printing will be found in the Middle East. Dubai has stated publicly it wants 25 percent of all its new buildings 3D-printed by 2030. And AECOM, for example, has a MOU in place with a Saudi company that builds residential housing throughout the Kingdom (acting as a feasibility/technical advisor). Easily replicated, low-rise buildings in an accommodating regulatory environment are the perfect 3D printing test tube. I expect big strides in this space over the next few years, but think we are long ways off from large commercial and infrastructure projects delivered through a 3D printing model.
How do you see technology impacting the construction industry in the future? What do you think the construction site of the future will look like?
In the near future I think construction sites will look pretty much the same as they do today. But the distant future they could be unrecognizable with AI-powered drones, robots, on-site 3D printers, and much more. Blockchain technologies could enable automated supply chains that incorporate drones and automated vehicles, with “smart” infrastructure that repairs itself. Here, AECOM’s Without Limits report about the future of infrastructure paints a fun, but ambitious, picture of what the city of 2030 might look like.
But I do think some of these questions put technology too far ahead of the industry. Regulations and existing attitudes about how the industry has always done things present powerful inertial forces for AEC stakeholders. One great recent example of an entrenched industry grappling with change is how UPS is fighting with the Teamsters union over its upcoming contract renewal this summer; the Teamsters want UPS to ban the use of drones for its deliveries. Expect similar battles over robots, drones, and autonomous vehicles in the construction world – perhaps sooner than we think.
Similarly, in many parts of the country, public agencies are restricted in the types of project delivery models they can employ. Innovative delivery and financing mechanisms will have to wait in those locations until attitudes and regulations change and these types of issues are resolved.
What technologies do you think might be required by owners and developers, insurance carriers and sureties, or even by general contractors for subs?
As I have written here at AEC Labs previously, I think there is a strong chance for blockchain technologies to power insurance, payment, lien waiver, contracts, supply chain, equipment, and other transactional kinds of obligations all along the construction supply chain. This type of transformation – under the hood of the industry, let’s call it – will be more transformational in shorter order than some of the more fantastic technologies we’re predicting (like robotic ironworkers, autonomous supply chains, AI-powered drones, and more).
I also think there is the potential for insurance to play a major role in how new construction technologies are brought to market. Much of the technology we have discussed here at AEC Labs so far – and which we discussed on the Builtworlds panel – could have an insurance application. And to date there has been little “insurtech” devoted to the construction world, and even less discussion about how insurtech and construction tech could combine forces for the betterment of the industry.
But that could be changing. In the last year we have seen a blurring of fintech, proptech, and insurtech solutions across the construction world. For example, there are a handful of startups in the payment and construction lending space – these are hugely manual and time-consuming processes, among many terrible, manual paper processes that exist at the intersection of construction, lending, insurance, and payments in general. Automating lots of those functions with blockchain, for example, could save time and money, and it’s easy to imagine industry stakeholders requiring participation on their projects in short order.
On the insurance and surety side of the coin, I could see either or both requiring Internet of Things-enabled devices on site for certain contractors and their subs for certain types of policies – general liability, worker’s comp, builder’s risk – perhaps by offering discounts on premiums or even partnering with startups that look to deploy these types of devices. BuildSafe in Sweden and SmartSite Safety are operating here, undoubtedly with more to come.
Finally, what emerging technology will be most disruptive to the built world? AI and machine learning? Robotics? Connected jobsites and Internet of Things? Modularization/prefab, or AR/VR technology?
In addition to prefab technologies, our panel seemed to agree that in the short-term artificial intelligence is on the cusp of having the most disruptive impact on the construction industry. Its applications are endless. Deep learning tools could be applied against internal databases to predict problem projects and protect against margin erosion. An Amazon Alexa-like voice function could provide contract documents, change order forms, or internal approvals on demand. AI’s potential could fundamentally change the way that the industry thinks about KPI, analytics, and much more.
In the longer term, robotics, AVs, and drones, perhaps even coupled with sharing economy practices (like what EquipmentShare is doing for heavy civil construction equipment) offer the potential to automate. And automation across broad sectors of the industry would be highly disruptive (but not necessarily in a good way, from the perspective of labor).
Yet at end of the day – and again, as AECOM’s Without Limits report identified front and center – transforming the built environment will remain, over the long haul, a funding and procurement problem. How will the industry bridge the $1.3 trillion funding gap that’s needed just to modernize our existing infrastructure? This is a very difficult challenge for which there may be no technology solution. But perhaps it’s also an opportunity – maybe for blockchain, maybe for fintech, maybe for a solution we just haven’t imagined yet.
As for blockchain, one of the biggest benefits I see to implementing it across the AEC industry is that it could give firms comfort to use emerging tech like AR/VR/BIM more widely than they do currently based on risk and other fears/factors. Once that happens, we will see AR/VR models be manipulated in real-time by design teams – saving time and dollars.
One transportation-related technology we did not discuss on the panel (or here at AEC Labs, yet) is Hyperloop. If the potential lives up to its promises, it could change the way entire cities and regions are designed and settled. Startups in this space include Arrivo and The Boring Company – these will be fascinating, and critical, to keep a close eye on in the years ahead.
And, if necessity is truly the mother of invention, water technologies in general hold great potential for enterprising AEC stakeholders. Cape Town – as you may have heard – is about to run out of water. How we obtain, deliver, and distribute fresh water to cities is going to be a persistent 21st century challenge. So there will be lots of potential for companies that can not only bring innovative, tech-enabled solutions to the table, but deploy them effectively.
Finally, and while this is not a technology application, I also think expanding alternative delivery models is critical low-hanging fruit that could reduce costs for certain types of projects in a broader range of geographies. This includes design-build, public-private partnerships, and construction management at-risk (CMAR). Perhaps there could be a tech solution to help streamline owners’ choice of project delivery based on AI tools?
Either way, we will have much more to say about alternative delivery models in a more focused article here at AEC Labs, soon!