Construction technology is transforming productivity in the industry
By KYLE SLAGER
As a trade, building hasn’t changed that much over the years. Productivity growth has remained stagnant compared to other industries that have continued to reinvent themselves through innovation.
The construction industry has often been disinterested in adopting technological advances. This has started changing in recent years as long-term skilled labor shortages force builders to find ways to increase productivity with smaller crews.
All these years after the housing market crash, the skilled construction labor pool has still not recovered. As of August 2017, more than 70 percent of construction firms are still having trouble recruiting for hourly craft labor positions, according to the Associated General Contractors of America (AGC). Builders are being forced to find new ways to achieve the greatest results from the least efforts.
With these challenges come great opportunities for builders. According to a McKinsey Global Institute report, “Reinventing Construction Through a Productivity Revolution,” boosting the construction sector’s productivity growth by only 1.8 percent could net it a $1.6 trillion increase in market value.
Contractors Plan to Spend More on Tech
Software Connect’s Construction Technology Trends 2018 Report showed 81 percent of construction companies surveyed were planning to spend more on technology in 2018 compared to last year. Other key findings included:
- Software ease-of-use was cited as the most important factor when purchasing new technology.
- Construction companies are more interested in cloud-hosted software than other industries.
Almost 60 percent of small-to-medium- sized construction businesses professionals surveyed by Software Connect say their businesses increasingly rely on smartphone- or mobile device-based applications. They are also more interested in exploring cloud- based technological solutions than their counterparts in other industries.
The growth in the construction software market is a win-win situation for the both the people who develop the technology and the people who use it to help them build. The $7-billion-and-growing software construction market is catching the interest of record numbers of investors who have begun pouring funds into construction technology companies.
My own company, Raken, raised $10 million in Series A funding earlier this year in a round led by prominent venture capital firm U.S. Venture Partners (USVP), with participation from new investor Tao Capital Partners, and existing investors Eniac Ventures, Rincon Venture Partners and Spider Capital.
Mobile Technology and the Cloud
There are two main barriers to adopting technology that builders face. One is the learning curve facing long-time workers, who may be reluctant to embrace things. The other is the investment required to purchase and implement any new technology.
As a result, builders are turning to easy- to-use mobile apps that address the most common pain points they face. Cloud-based construction monitoring software, designed to run on common mobile devices and smartphones, can relieve the administrative burden of old-fashioned pen-and-paper reporting and improve inadequate team communication. From documentation of safety incidents and weather delays, from photographs to reports, all the data generated during a project can be stored in a centralized, easily accessible database in the cloud.
By allowing quick and easy filing of daily reports from the jobsite, construction superintendents and foremen can keep project managers informed about real-time progress. Updates, messages, and safety information can be shared and accessed through mobile devices as well as laptops and desktop computers.
Daily reports are taken for granted, but there is so much incredibly valuable data in them that can allow builders to catch small problems before they become big problems. Delays and safety incidents can be addressed as they occur, allowing managers to take steps to keep the situations from reoccurring.
Cloud-based computing will continue transforming the construction industry as it is doing so for all other industries. By 2020. 92 percent of all computing workloads will be processed in cloud data centers, according to the Cisco Global Cloud Index.
As the building industry finally begins to buy into technological innovation in earnest, investors are looking for opportunities to support innovation in the construction technology market. Companies will continue to developing new products to increase construction productivity at an ever-greater pace. The building industry faces some exciting and challenging times in the years ahead, and those companies ready to embrace change and innovation will thrive.
Kyle Slager, founder of Raken, was a research associate in the investments group of Brandes Investment Partners, a leading global value-based investment management firm. He was responsible for making investment recommendations to Brandes’ portfolio committees, which was responsible for investing more than $120 billion in assets under management.