It’s becoming a familiar tale: business disrupts the normal and expected; business reaps rewards.
Today’s global environment is marked by uncertainty, complexity and swift change. Businesses that have shaken-up their industries, either through innovative products and services or by streamlining systems and processes are proving to be the winners. Driving this creative storm is technology. A recent Grant Thornton survey shows a clear correlation between accelerated growth for mid-size businesses and the smart use of technology in a range of sectors.
So, how is technology shaping the future of the construction industry? And how can you transition from disrupted to disruptor?
Every part of our economy is being changed by technology’s disruptive influence. While some businesses are capitalising on it; some are at risk of being left behind. The real estate and construction industry is responsible for shaping the cities we live in and designing the places in which we work, live and play and therefore should be the vanguard of this disruption. As the Australian economy transitions away from the mining boom, businesses in the construction sector are seeking efficiencies to give them an edge. The Federal Government is supporting this mindset not least with its ‘Innovation Statement’, unveiled in December 2015. With almost $1.1 billion pledged over the next four years to promote business-based research, development and innovation, the Innovation package could provide an important springboard for mid-size businesses embracing technology. With 40 million citizens projected to call Australia home by 2055 1, innovation will be critical to the way we construct the homes and business places of the future to ensure access for all demographics.
Much of the innovation and new technology developed globally in the real estate and construction industry has been centered on sustainability. New materials, 3D printing, pre-fabrication, and modular approaches are among the emerging trends shaking up the construction industry and boosting growth for those who are ready to adopt, particularly in Australia where take up has been slow to date. Agile, mid-size businesses in the construction industry are well placed to take this next step in local innovation and capitalise on the growth opportunities on offer.
Modular construction is a growing trend and being picked up by a number of Australian businesses, some out of necessity. To enhance efficiency, some Not for Profit organisations (among others) have adopted this technology in the construction of aged care facilities, with successful outcomes reported of minimized construction times and wastage and a higher focus on quality, optimising their limited resources to achieve the organisation’s objectives.
Chinese company, Broad Sustainable Building Co Ltd (BSB), used the modular approach to build the world’s tallest pre-fabricated building in central China. Standing at 57 storeys the building’s construction was completed in just 19 days – a remarkable rate of three floors per day! The company realised many benefits including cost savings with less risk of lost days and reduced holding costs, and a minimised impact on the surrounding environment.
Some of the big, global players in the construction sector are leading the way locally in disrupting through adopting technology in construction processes. LendLease has embraced pre-fabrication technology to change the way their building materials are produced over the next five years. The company has invested $15 million to start up pre-fabrication operation Design Make in western Sydney, creating up to 70 construction and design jobs in the process. The company expects to realise significant benefits by limiting waste, reducing transport costs, and the time it takes to construct on-site.
The benefits of prefabrication 2 include:
- Up to 90% faster construction
- 100% re-use of componentry
- Reduction in site waste by up to 80%
- Reduce transport, labour, site preliminaries by 70%
A huge amount of research is being undertaken globally on any given day to improve the longevity and safety of the materials used in the construction of our cities and our homes. From the development of self-healing concrete that is being tested by the University of Cardiff, that could have a massive impact on the sustainability of our infrastructure (think tunnels, bridges and buildings) through to heat reflective paint that could reduce cooling needs and the maintenance on our homes. While the rest of the world has picked up on the use of timber framing in high rise buildings, the National Construction Code in Australia has only recently been updated to allow for structures (up to 8 storeys). So while there may be businesses willing to utilise the innovative materials being developed, our regulatory codes need to keep abreast of the changes and allow for the technology to be embraced.
What can you do now to take your business from disrupted to disruptor?
It’s no longer an option to leave technology choices solely to the IT department or innovation to an R&D team. Strategic approaches at board level are necessary for businesses to capitalise on their investment in technology and realise the efficiency and productivity returns sought. With technology critical to future growth, boards and C-suite executives must lead their business’ digital transformation across the organisation, rather than rely on their IT department to lead innovation piecemeal.
Companies need to have a clear strategy that identifies where the biggest difference can be made with technology, and align business goals and technology requirements with choices that are guided by a customer-centric approach rather than a technical checklist. For those willing to embrace technology there is significant growth on offer – and some of the best in the business are gearing up to transform their businesses through technology. For those who prefer to wait and see how their early adopting competitors fare when implementing technology currently available, change will become necessary if they are to remain competitive. If competitors are able to benefit from enhanced processes and efficiency, the adoption of innovative technology in the construction industry will not be a “nice to have”, it will be a necessity to compete and grow.
The upside of adopting technology
- faster construction times
- reduced labour costs
- fewer defects
- less waste
- better health and safety, and
- better productivity from existing resources
The last point is particularly attractive for businesses and lenders alike. The broader community also benefits from sustainable construction practices and materials.
Consider the risks when adopting technology
With innovation comes risk. Those looking at pre-fabrication should consider upfront the difficulties involved in customisation and changes to specifications for their products and the knock-on effect to projects. The slow adoption of technology presents risks of its own: the limited understanding of new construction practices by the broader public could expose businesses to negative perceptions of quality and value. It is vital that those who adopt technology as part of their growth strategy are forefront in educating the business community, financiers and consumers of the benefits so the new practices become mainstream sooner.
If the Australian construction industry is to compete and encourage growth in local and global markets, investment in technology is a must. Internationally, construction businesses are already taking this step, and much can be learned from their experience. Businesses that embrace technology to improve their processes will play a leading role in keeping up with the demand of Australia’s growing population, and reap efficiency and profitability benefits in the process.
 2015 Intergenerational Report
 ARC training centre for advanced manufacturing of prefabricated housing