Despite an increasing cultural shift towards digitization, the construction industry remains a dinosaur, and a sleeping one at that. For example, before the COVID-19 crisis, 93% of construction industry players agreed that digitization would soon affect every process, according to a Roland Berger survey for developed countries, and yet only 6% of construction companies made full use of digital planning tools. However, the pandemic has pushed all types of sectors to find ways to effectively operate online, with equal doses of opportunity and setback – and construction is no exception. In fact, the current situation around the globe might very well be the catalyst that the industry needs to achieve progressive, yet substantial – and necessary – digitization.
Interestingly, this global how-far-can-we-go-with-online-work simulacrum that companies around the world have been experiencing due to COVID-19, leaves no option other than to rapidly bring many analog activities into the digital environment. This is particularly the case for SMEs with processes including logistics, procurement, risk management, and design, and on-site production that can work more efficiently and save money being partially or completely digital when possible. Thus, the current situation opens the possibility to transform the construction’s digitization-shy stakeholders and agents into the kind of digital advocates that could facilitate an industry revolution in the years to come.
The delay in embracing digitalization is not due solely to cultural factors. Roadblocks are inherent to the construction industry, with its disaggregated value chains, a strong physical work component and high risk embedded in its operations – making it difficult to achieve consensus, integration, and stakeholder collaboration. Hence, this kind of forced digital momentum is an opportunity for leadership across the industry to take good note of how construction business operates during the pandemic, to work within the restrictions (and opportunities) presented, and to become advocates for digitization afterwards. We are in a moment of unprecedented transversal alignment.
The term digital is generally associated with innovation and connectivity, but it can also be, and particularly in construction, a shortcut to sustainability. For instance, these days, diminishing embedded carbon is genuinely dependent on digitization because it requires traceability throughout all activities and participants in the construction process – and this is practically impossible without a mature and interconnected technological environment.
Thus, taking the opportunity presented to us by the pandemic, to quickly and thoroughly digitize the construction industry, could open possibilities to address one of its most challenging and urgent problems: reducing the embedded carbon footprint in construction activities. There has been no significant improvement in this front for the last 20 years and the construction industry distressingly counts for nearly 40% of the world’s global CO2 emissions. The Anthropocene clock turns unceasingly, but the current moment of forced digitalization presents an opportunity to slow that ticking, or better tune it with the environment.
Enhanced technology use and the spread of B2B applications – in all industries, not just construction – integrate processes and agents of a similar value chain into singular digital environments, for example through platforms generally oriented towards efficiency, economic savings, and improved collaboration. B2B platforms and applications are essentially designed to unite diverse agents around a very simple interaction with very clear rules – for instance, connecting builders, suppliers, architects, and engineers around the creation of projects, buying or selling products, consulting data, messaging, or controlling costs. These relationships, which are curated to generate value for the users, are more likely to find organic consensus and massive transnational adoption than imposed or penalization-oriented rules for the industry.
These dynamics, combined with sufficient digital and ethical momentum, can greatly contribute to addressing complex and important problems in the industry that are not initially attractive from the point of view of business yet entail great value and impact, such as embedded energy. The latter requires detailed knowledge of the origin of building products, of how resources are extracted, transported, transformed, including knowing the intermediaries of these operations. It also requires monitoring the on-site processes, demolition and recycling in each case. Aggregating this information would not only give construction promoters, participants, and ultimately end-users the power to strategically choose what they incorporate into a project but to know – objectively speaking – the environmental price of their choices. It is difficult to believe but currently, due to a lack of appropriate tools in construction projects of any scale, such a decision-making process is not yet entirely attainable in terms of ease and depth.
Digitization brought on by the urgency of the pandemic helps us to envision new ways of working, methods that protect the world and create a sustainable future – even in an industry as ancient and seemingly intractable as construction. The veracity and traceability of the information collected throughout the construction process could now be guaranteed by progressively implementing technologies such as blockchain, and coordinating an increasing number of agents in all segments of industry, from residential and commercial building to industrial construction, who have genuine interest in creating and capturing value through sustainability. They, together with technology leaders, are fundamental to demanding digitization and guiding through this important change.
An industry like construction, which represents 13% of global GDP and is accountable for roughly one-third of global CO2 emissions, has natural ties to and implications with many other activities, including logistics, mechanics, and land management. It is also omnipresent in our daily lives. Although it may be easy to overlook, construction is crucial in the shaping of our streets, parks, highways, airports, homes, and schools – as well as the quality of the air around them.
A significant part of the world has recently developed an acute awareness of sustainability in certain value chains, for example in food and retail, demanding traceability, non-invasive production, and fair trade. By investing in digitization in construction, a path towards sustainability can be viable in this industry too. Not to mention it would also be highly profitable: the impact of digitization in construction is estimated to generate around 1.6 trillion USD. Furthermore, implementation can be facilitated through the sharing, to a reasonable extent, of the tools and frameworks that have already been used in the complex production ecosystems of other industries.
In the coming years, sustainability and digitization in construction should be considered essential and must be demanded as such by both those within the industry and outside of it. If we aim to make an impact, the complexity of this challenge urges the realm to consider embedded energy reduction as a non-negotiable requirement of construction services, of the same nature as structural integrity assurance or other requirements already in place. Hopefully this momentum shows itself to be at least one positive outcome of this current and difficult crisis.
© IE Insights.
