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Rise of digital solutions in the construction industry

June 29, 2021

The construction industry has long resisted adopting new technological solutions. Over the last ten years, however, the expansion of digital products and robotic solutions, as well as an increase in safety concerns, have led construction to adopting more solutions based on technology.

In the article “Rise of the platform era: The next chapter in construction technology” as published in McKinsey and Company, authors Katy Bartlett, Jose Luis Blanco, Brendan Fitzgerald, Andrew Mullin, and Maria João Ribeirinho provide a detailed look at the current and future use of technology in construction.

The COVID-19 pandemic has had far reaching impacts on all industries by shifting many employees from the office to the home environment. This includes construction work done by contractors, engineers, and facility managers.

“We expect that the continuing COVID-19 pandemic will drive a net acceleration in the use of technology and the construction industry will continue its transformation from a highly complex, fragmented, and project-based industry to a more standardized, consolidated, and integrated one,” shares Bartlett, et al. 

McKinsey, which has historically mapped the global construction technology industry ecosystem, recently updated their analyses and found that the most frequently used technologies in construction are 3-D printing, modularization, and robotics.

The article also highlights that growth in construction tech is outpacing other industries, with a strong focus toward integrated solutions.

“From 2014 to 2019, investors poured $25 billion into engineering and construction (E&C) technology, up from $8 billion over the previous five years,” shares Bartlett, et al.

About $13 billion of those investments were mergers ad acquisitions, which the authors say supports a shift to integrated platforms rather than individual solutions.

Says Bartlett, et al., “The more features and interfaces with other tools offered, the higher the likelihood the platform will become critical to day-to-day operations for customers’ businesses.”

In spite of technology solutions becoming more platform-oriented, there is a large amount of fragmentation among digital construction tools. Tools that are used at the earlier phases of a construction project have higher rates of investment than those used in later stages of the project.

“Digging deeper to use cases within these project phases reveals a significant focus on field productivity, engineering-design tools, planning and scheduling, and facility management and improvement-focused solutions,” shares Bartlett, et al.

Looking to the future, the article authors offer several suggestions for how construction can continue to modernize with digital solutions. These include scaling platforms with a specific angle – in other words, for specific industry subsegments; developing solutions with integrative technology that connect technology to the physical environment; and expanding predictive analytics solutions.

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