A New Report Inspires Innovators to Redefine the AEC Industry

The World Economic Forum and The Boston Consulting Group recently released a report to encourage innovators redefine the AEC industry. They give recommendations and feature ten lighthouse innovation case studies to demonstrate the potential of innovation.

The report is the second publication of the multi-year Future of Construction project. The first report showed how many innovations have emerged but have not yet been broadly adopted. The second report suggests remedies, drawing key lessons and policy recommendations from leading innovators and disruptors.

Construction is increasingly important

Construction is the largest global consumer of raw materials, and the built environment accounts for 25-40% of the world’s total carbon emissions. Globally, construction generates annual revenues of almost $10 trillion and accounts for 6% of global GDP.

The report mentions several global megatrends that will increase the importance of construction: migration into urban areas, climate change and a new global push for infrastructure.

Companies Drive, but Governments Need to be Active

According to the report, the industry’s transformation is, and must be, driven by the private sector. However, governments play an important role. They can pursue policies that advance the adoption of innovation. A governments can act as

  1. Smart regulator: Harmonize and update building codes and develop performance-based and forward-looking standards
  2. Long-term strategic planner and incubator:  Define a country-level strategic innovation agenda for the industry, invest in flagship projects and R&D, and enable start-up financing
  3. Forward-looking project owner: Create an innovation-friendly owner culture, introduce more flexible procurement and contracting models, and take a lifecycle perspective to procure innovative solutions

The public sector in general has a very important role as a construction client. Finland serves as an example where all the three roles of the government  in this respect are actively pursued.

Nine Key Success Factors for Innovation

The report outlines nine key success factors for innovation in the construction ecosystem:

Stimulate innovations

  1. Develop a vision and instil an innovation culture that challenges the construction industry’s status quo
  2. Create talented, multi-disciplinary teams, and devise an agile organisation to accelerate innovation
  3. Take a customer-centric approach to devising innovations, starting from the pain points of construction clients and asset end-users

Turn ideas into reality

  1. Establish product platforms rather than taking an individual project perspective, to create the business case for innovation
  2. Develop pilot projects and prototypes to demonstrate the potential and provide proof of value
  3. Nurture the broader ecosystem necessary for implementing the innovation, by developing the (local) supply chain and partnerships

Succeed in the market

  1. Embrace business-model innovation alongside technological innovation in Engineering & Construction
  2. Advocate new ways of contracting to enable and incentivize effective collaboration with project owners from Day 1
  3. Shape the regulatory environment proactively to enable and promote adoption of the innovation

Most of the suggestions are familiar to those who have tried to advance innovation in the construction industry. The customer-centric approach, for example, has been on the agenda for well over 10 years. The interesting question is how willing and able the established players in the industry are to follow these recommendations.

Digital disruption is not limited by industry boundaries. In fact, too much insider knowledge can become a curse. As an example, the report mentions Gijs van Velden, CEO and Co-Founder of the robotics 3D-printing start-up MX3D.  He said that he and his colleagues “were lucky not to have too many ‘builders’ in the group” and so were able to take a fresh view and embark on the venture to revolutionize construction.

The Lighthouse Case Studies

The Lighthouse innovation case studies feature state-of-the-art implementations, start-ups, and pilot projects:

  • The Edge – Creating the world’s most sustainable and most connected office building by integrating smart technologies and collaborating closely with suppliers
  • New Karolinska Hospital – Leveraging lifecycle building information modelling (BIM) to optimize the construction, handover, and operations and maintenance of the largest ever public-private partnership for a hospital
  • Moladi Construction System – The Courthouse Project in Tanzania: A low-tech, scalable and affordable building solution to improve and expand social infrastructure
  • Burj Khalifa – Constructing the world’s tallest building and an iconic landmark leveraging innovation in building materials and techniques
  • Anglian Water @one Alliance – Improving the construction and performance of infrastructure assets by forming an alliance of contractors and suppliers, and by taking a broad programme approach that enables standardized products
  • BROAD Sustainable Building – Bringing manufacturing principles to the construction of high-rise buildings
  • MX3D – Collaborating with key industry partners to advance on-site fully autonomous robotic 3D printing in the E&C sector
  • Aditazz – Transforming Engineering & Construction by applying design-automation principles from the semiconductor industry
  • Winsun – Demonstrating the viability of 3D printing at construction scale
  • Uptake – A predictive analytics platform disrupts the industry from within via strategic partnerships

The Way Forward

As concluding thoughts, the report authors outline six challenges that necessitate innovation:

  1. Project delivery
  2. Lifecycle performance
  3. Sustainability
  4. Affordability
  5. Disaster resilience
  6. Flexibility/Liveability/Well-Being

The World Economic Forum’s Future of Construction initiative established six working groups to develop solutions to the six challenges. These groups comprise more than 60 experts who have now jointly produced more than 45 mini-essays. They each propose a solution and describe its potential impact, the barriers inhibiting its implementation, and the next steps needed for making it a reality. The mini-essays are accessible on the project’s knowledge sharing platform at www.futureofconstruction.org.

SOURCE: Shaping the Future of Construction Inspiring innovators redefine the industrythe report