Career Advice Property and Construction

Digital Transformation of the Construction Industry

The construction industry is on the cusp of enormous change, not by choice but by method of surviving the major challenges the industry currently faces. A recent McKinsey study found that globally, construction-related spending accounts for 13% GDP but the industry has one of the lowest annual productivity growths, increasing only 1% over the last 20 years. This results in a huge gap, with the potential for US$1.6 trillion of added value if productivity improved1. More locally, Hong Kong is one of the most expensive cities in the world, and the most expensive city in Asia, for construction costs and has an ageing workforce exacerbated by the shortage of skilled labour entering the industry2. Whilst it has been accepted that this is no longer sustainable globally and in Hong Kong, what is the construction industry doing to address this?

An industry left behind?
Many other industries have embraced going digital in their efforts to become more productive and their fast paced nature had all but left the construction industry in the dark. In fact, the construction industry was recognized as one of the least digitized industries, with only agriculture and hunting below it3. However, the first half of 2018 saw a record high investment of US$1.05bn into global construction technology4, signifying the market’s realization of the potential for development as well as the necessity to change.

Designing and constructing change
What are the aims of the digital transformation of the construction industry? To deliver projects more efficiently, produce higher quality results and ensure everyone gets home safely. Some key examples of technologies and digital methods that form part of this digital transformation include collaborative designing through Building Information Management (BIM), offsite construction using Modular Integrated Construction (MiC) approaches, and automating and optimizing tasks through Robotic Process Automation (RPA) and Artificial Intelligence (AI).

BIM is a collaborative method of working facilitated by digital technologies such as Common Data Environments (CDEs) and 3d software packages. It is helping the construction lifecycle move from 2D, paper-based methods with limited sharing to 3D digital environment, allowing for full collaboration at all stages. A CDE is key in this process as it acts as the single source of information for all project data, being stored digitally allows for sharing and collaboration with all key stakeholders regardless of location. Applications of BIM can create a ‘Digital Twin’ of the physical asset, generating ‘virtual reconstruction’ for design optimization and enhanced construction methods through uses such as virtual reality walkthroughs for stakeholders and clash detection.

Offsite techniques such as MiC use principles from the manufacturing industries and apply it to design and construction. By applying construction methodology thinking during the design stages, facilitated by the use of BIM, it allows for the prefabrication for many components to be completed offsite. By transferring construction work to factory-controlled conditions, it provides greater quality control in a safer environment. Combining collaborative logistics, such as GPS tracking and progress monitoring, and just-in-time delivery with pre-rehearsed site installation techniques further drives safer practices all while reducing waste in materials, resources and time.

As the use of digital platforms and technologies increase, so does the amount of data available. AI is being used to process, understand, and predict everyday site ‘big data’, such applications include optimizing programme schedules and automating weekly reports. When integrated with app-based platforms and chat-bots, previous time consuming paper-based forms such as risk assessments and safety observations can now be completed on site in real-time. Not just in the field applications but back-office and central functions too, repetitive and rule based tasks are becoming automated through the use of RPA. By mimicking administrative and transactional tasks in a digital environment, RPA reduces the amount of manual input required, freeing up resources, reducing human error and allowing for 24/7 operation.

Building the right culture
Digital transformation, however, isn’t just about the technology. It is also dependent on the people and culture to drive and successfully implement change. Tools such as CDEs may facilitate the ability to share information but it is a correct mindset and trusting environment that utilises the opportunity to break down traditional barriers and allow for true collaboration.

The transition to digital is also forcing a change on the lack of diversity within the industry. With new approaches and methods being applied to construction, it requires more diverse skill sets and opens up the opportunity for more inclusive working environments.

In order for the industry to embrace and develop these innovations there has been a growing demand for non-traditional roles and competencies, allowing different backgrounds and experiences to enter into the industry. A recent study found that a combination of a flexible, creative, and problem-solving mindset along with an understanding of tools and data provides the right balance of core competencies in order to not only understand digital transformation but also implement change5. Furthermore, collaborative and flexible working environments enabled by digital transformation, such as remote working through cloud-based platforms, have the potential to create more equal opportunities whilst also making the industry more attractive to work in through challenging traditional conceptions of the industry. Ultimately a more diverse workforce, particularly at the leadership level, has been proven to result in better innovation and improved financial performance6 - a vital aspect of any successful digital transformation. 

The transformation journey of such a traditional and risk averse industry will never be an instant change. There are many stages, factors, and stakeholders that complicate a construction lifecycle and to digitally transform the full lifecycle will take time, but it is progressive and it is accelerating with growing government support. Combined with the right culture, it will continue transforming towards a sustainable and inclusive industry. 

Written by Geotechnical Division of the HKIE and Ms Alexandra GRIERSON