The world’s rapid transformation from manual processes to digital technologies is empowering the industry. Construction companies are now provided with unprecedented levels of transparency, choice and convenience. With enhanced capabilities, there is an increased demand for higher quality, greater safety and timely completion of projects.
This influx of technological solutions is mitigating risks and streamlining the building production process. This research provides a high-level overview of the technology landscape and potential future state of the industry. It’s the first of a series of papers that will focus on three core areas:
- Design-oriented digital technologies
- Industrialized and componentized construction advances
- Construction automation—supporting work through digitization
Realizing the Demand
Information technology (IT) and software companies have recognized a demand for digitization in construction and are expanding their offerings to include solutions tailored for many processes. Sensors, cameras and drones are being used to monitor project progress and create smarter buildings.
Automation is found in almost every repetitive process, and the construction industry is seeing a resurgence in industrial manufacturing to compensate for declining on-site construction productivity. Incorporating these technologies allows for more intelligent planning of construction, supply chain management and delivery.
The industry is experiencing technological innovations throughout the project life cycle, with the internet of things (IoT) at the forefront. In 2019, the IoT industry was estimated at approximately $270 billion and is expected to grow at a 26% compound annual growth rate (CAGR) for the forecasted period through 2025. Currently, 3D printing holds the smallest market share of the construction industry, but substantial growth of 245.9% CAGR is expected.
Other technologies, such as blockchain, artificial intelligence (AI) and robotics are also expected to contribute to this growth. Full-scale digitization may help escalate the construction sector and generate an estimated 12% to 20% in annual cost savings within a decade. Look to Figure 1 on page 29 and Figure 2 on page 30 for growth projections by market through 2025.
Design-Oriented Digital Technologies
1. Building Information Modeling
Building information modeling (BIM) has become the most commonly used technology in the construction industry. Seventy-three percent of United States contractors surveyed by Dodge Data & Analytics report utilizing BIM, with 79% of those using it on more than 30% of their projects.
BIM is the process and digital representation used for modeling and management of the physical characteristics of a construction project or facility. It is a shared knowledge resource for facility information, forming a reliable basis for decisions during its life cycle from earliest conception to decommissioning.
BIM can be applied to create 3D models, and has evolved to additional dimensions, including schedule (4D), cost estimating (5D), sustainability (6D), and operations maintenance (7D).
It affords several benefits, such as efficient design, enhanced coordination, cost and time savings, gains in accuracy and a significant reduction in errors and rework. The estimated savings of project cost using BIM is typically between 4% to 6%. As the dimensions of BIM have evolved, it has become a critical input to digital twins.
2. Digital Twin
One of the latest trends in the construction industry is the creation of a digital twin to enable simulation and predictive analytics. The digital twin enables convergence of the physical and virtual world, where every process, product or service is represented by producing a digital replica of a physical asset or living entity.
This allows analysis of data and monitoring of systems to identify and resolve problems before they occur and develop new opportunities for the future by utilizing simulations. By reconstructing an as-built state of a structure in BIM, we can then compare it to as-planned execution and take corresponding actions to correct any deviations.
Digital twin building simulations can be used to assess the energy demand, indoor environmental quality, carbon emissions and payback periods of energy management systems over the lifetime of an asset. Once the building is operational, a digital twin can be used to notify the user or owner of maintenance malfunctions.
Strategic benefits also include automated progress monitoring, facilities management, intelligent recommendations, self-tuning, 3D databases of virtual asset information, data collection for AI systems and historical recall.
3. Augmented & Virtual Reality
Technologies like augmented reality (AR) and virtual reality (VR) have enabled construction companies and customers to visualize elements of the design, build and post-construction phases of their projects. AR is a live, direct or indirect view of a physical, real-world environment with elements that are augmented by computer-generated sensory input.
VR is an artificial environment that is created with software and presented to the user with a virtual model of the real world. 2D, CAD and BIM plan sets can be transformed into a fully immersive AR and VR, providing a virtual 3D overlay view of buildings and interiors. This allows stakeholders to obtain an improved understanding of what is to be built, along with visibility of spatial mapping.
4. Geo-Enabled Technologies
Geo-enabled technologies have unlocked the potential of location data to drive informed decision-making, process standardization and efficiency. These technologies utilize cameras and sensors to obtain data, measurements and quantities over the life cycle of a project.
Drones are becoming increasingly popular to provide on-site digital asset tracking, continuous spatial inspection and progress monitoring. Cameras with 360-degree views can provide monitoring for enclosed rooms and buildings. These cameras are aiding with waste reduction and tracking materials, equipment and inventory.
Industrialized & Componentized Construction Advances
5. Digitally Enhanced Manufacturing of Componentized Buildings
With a heightened focus on efficiency and faster building methods, industrialized construction is on a growth path and the trend is emerging around the globe. The industrialized approach shifts many construction activities away from the site and allocates these tasks to a factory—enter prefab and modular construction options.
Preassembled building components and modules are then shipped to the construction site for assembly. While these are not new concepts, opportunities have compelled developers to apply prefabrication with technological innovation to their projects. Pursuing this strategy helps overcome common construction challenges, including speed of delivery, economic viability, quality and enhancing environmental sustainability.
6. 3D Printing
Also referred to as additive manufacturing, 3D printing digitally creates successive layers of materials to produce three-dimensional objects from a digital file. It has evolved to be a natural fit within the industry (notably polymers, metals, ceramics and concrete), usable for a variety of suitable materials and providing almost limitless freedom of flexible design.
Realizing reduced costs associated with fabricating complex shapes provide less constraints on architects and designers. Emerging opportunities include printing piping and fittings, tools and equipment, formwork for concrete, structural insulated panels, walls with embedded mechanical, electrical and plumbing systems and roofs with solar tiles.
7. Physical Robots
Robotics that allow complex physical tasks to be performed with minimal human intervention are becoming more common in the industry. There has been extensive development of methods to automate various trades.
Robotics are being utilized for bricklaying, welding and concrete pouring. Employing robots to perform typical human labor provides construction efficiencies, precision, reduced human labor and enhanced safety. Supporting Work Through Digitization
8. Robotic Process Automation
Robotic process automation (RPA) is one form of automation. A computer software program that operates repetitively with rule-based processes, RPA replicates and collaborates with the actions of a human being, interacting with the user interface of a computer system. It improves speed, accuracy, consistency and the cost of executing these routine tasks.
RPA can enhance project controls and tasks related to project finance. Financial forecasts may no longer require manual entries in Microsoft Excel. Instead, the robots can collect data from multiple systems, while algorithms build forecasts based on past and present data (using predictive analytics).
9. Facial Recognition & Biometrics
Facial recognition captures graphical information using multiple data points like distance between the eyes and facial curves that are unique to individuals. The information is stored utilizing an algorithm in a database. When accessed, the system scans and matches the facial information by applying it to the algorithm.
Current investment includes facial recognition to enhance safety at the construction site, access control and productivity monitoring. As the technology progresses, it can potentially change the landscape of physical security, payroll systems, project controls and resource optimization, helping to reduce cost and enhance control.
AI is a label given to computing systems that exhibit the ability to perceive information, retain it as knowledge, and apply it to making decisions. AI may also interact in ways that seem natural to humans, while simultaneously learning from those interactions by utilizing machine learning. AI can drive productivity improvements as the systems augment human skill sets and reduce the need for tedious human effort.
Current AI efforts include project schedule optimization through historical data, identifying unsafe worker behavior through image recognition and classifying signals and patterns to deploy real-time solutions. This allows AI to prioritize preventative maintenance through enhanced analytical platforms.
As this particular technology progresses, it will optimize project supply chains by tracking and analyzing complex data, such as providing the ability to employ artificial neural networks to predict cost overruns.
Blockchain helps provide the construction supply chain increased functionality, efficiency and visibility. Blockchain is an open public database in which transactions are stored in virtual blocks. These blocks are connected in a chain, creating a complete history of all transactions that have occurred within a particular network. Blockchain has the potential to encrypt and protect key elements in construction operations and supply chains.
This technology could potentially handle all contractual relationships using concepts like smart contracts and electronic verification. Blockchain-enabled distributed ledgers can enable better transparency and accountability in construction projects by addressing scope creep, contract changes and elimination of waste to reduce costs.
IoT enables the connectivity of assets and big data analytics, providing new insights for project teams by capturing large amounts of reliable data in real time. IoT is the network of physical devices embedded with electronics, software, sensors, actuators and network connectivity, enabling these objects to collect and exchange data over the internet.
Emerging opportunities include installing monitors at the beginning of a construction project to analyze output (energy, utilities, labor, etc.) and optimize supply chain interaction and jobsite conditions.
IoT enables green buildings to complete tasks, such as shutting down unnecessary systems when the building is unoccupied and opening and closing louvers automatically to provide optimal levels of natural light.
Predictive maintenance programs can also be established with IoT. When fitted with sensors, construction equipment can automatically send notice if any abnormal patterns are detected. This alerts workers to intervene early in order to avoid critical downtime.
13. Smart Buildings
IoT establishes the overarching framework for smart buildings, which are constructed to provide autonomous improvement strategies and recommendations (utilizing AI, RPA and machine learning). This enhances the well-being and productivity of users while simultaneously saving operational costs and increasing building efficiencies.
Building managers are looking at smart buildings to analyze space users’ needs and move beyond the traditional lessor/lessee relationships. Smart buildings are planned to transform the business model and create real estate as a customer service platform. The customer service platform leverages data and integrated building infrastructure to significantly enhance the user experience.
Building an Innovative Strategy
The globalization of capital, emerging technologies and changing demographics require the real estate and construction sectors to rethink traditional paths to successful management of the built environment. To remain competitive, companies must explore new structuring options, improve the efficiency of operations and balance portfolios to maximize return on investment—all while mastering digital disruption and gaining a deeper understanding of customer preferences.
To create a digital strategy that will maximize chances of long-term success, firms should first challenge their strategic direction, and then define the future state of the organization that will create lasting value. Construction firms typically have profit margins of 2% to 3%, compared with an average of 20% in other industries.
When profit margins are narrow, spending 1% of revenue on digital upgrades and innovation can seem like a risky investment; however, failing to invest in solutions that could boost output is counterproductive. Onlookers can expect to see a few digitally focused construction organizations take on these challenges and subsequently dominate the global market.
New technologies and market competitors continue to emerge. The rapid evolution of construction and real estate technologies emphasizes that those who act fast and decisively, embrace disruption and focus on achieving long-term flexibility will emerge as the leading organizations in the future. Construction companies should include digital in every aspect of operations to achieve maximum data-driven insight.
With technological innovation expanding, now is the time to embrace disruption, use change to enhance productivity and prepare for the progressive digital evolution within the industry.