Demand for U.S. construction is healthy, growing 10% between 2016 and 2018, and now reaching $10 trillion in construction related goods and services globally (a staggering 13% of the world’s GDP) and $1.2 trillion in the U.S. Yet it’s an industry at a crossroads.
Consider these statistics:
To address these issues, the historically conservative construction industry is embracing new digital technologies from 3D printing to LIDAR-equipped robots to monitor progress. The first wave of digitization, including BIM software, has already demonstrated full project cost reductions of 5-7%, with even more dramatic savings expected as the sophistication of technology increases.
Digital tech rarely stops at bits alone
In industry after industry, from retail to transportation to manufacturing, changes made by digital technology rarely stop at bits alone. Digitization has unleashed five separate forces of change on the construction industry, each of which will drive significant disruption and relentless change to industry structure. These five forces set the stage for progressive, forward-thinking companies to grab market share while more conservative players stumble. The data captured by simple digitization of paper processes in the construction industry is driving a dramatic transformation from activities as far downstream as the selection of materials, to installation of ever more complex systems.
Five forces disrupting construction
Today’s construction companies face challenges with cost and schedule management, labor sourcing and matching supply to demand—all of which are being addressed by a fresh generation of disruptive insurgents. Experience from digitization in other industries shows that digitally-empowered companies will lead the scope and shape of the construction industry’s future.
Less than half of today’s market will be retained by today’s incumbents. The massive restructuring that digitization brings to industry after industry creates opportunity – for every company that loses market share, others will win and prosper. Aggressive companies that master innovation will be able to expand many times faster than the typical organic growth of 3-5% per year.
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