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article_0010('Digitization To Increase Construction's Productivity')


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Digitalization itself will not solve the productivity gap in construction, but it could play an important role. According to McKinsey, Innovative companies can boost productivity by 50-60% by using new technologies such as robotics, artificial intelligence, machine learning, disrupting the workforce, changing business practices, and pushing the government to change regulations. Despite the enormous challenges facing the industry, it has changed little in nearly seven decades. Its productivity levels have stagnated. Sources: 0, 8


Despite the enormous challenges facing the industry, it has changed little in nearly seven decades.

Overall labor productivity in Germany and Great Britain increased by 30% between 1990 and 2010, while work efficiency (gross value added per hour) in the construction sector increased by only 7% over the same period (4). Sources: 8 By contrast, labor productivity growth in construction has been just 1% per year since 1990, compared to an average annual growth rate of 2.5% in the United States over the same period. Sources: 0


According to the report, productivity in construction needs to be improved to attract the private funding required to close the global infrastructure gap. Sources: 0 McKinsey estimates that the sectors value-added would increase by about $1.6 trillion if construction productivity were to match that of the economy as a whole, adding about 2% to the global economy. The construction industry's efficiency is now about half that of 1993, and its productivity growth is 0.32% per year. However, it is the second-largest sector in the US economy, with about one-third of the $10 trillion spent annually on construction. Sources: 0, 3


According to McKinsey & Company's recent report, more than 75% of the most significant projects suffer from a decline in productivity. Less than 98% of megaprojects slip below 30%. Sources: 3 While almost all sectors are now moving towards digitalization to have better growth prospects, the construction sector lags significantly behind. According to McKinsey, nearly $1.6 trillion in investment funds poured into construction since McKinley, which could catch up with productivity. Sources: 3, 4


While almost all sectors are now moving towards digitalization to have better growth prospects, the construction sector lags significantly behind.

Current technology is already transforming the construction world, driving productivity and efficiency, redefining the project's life cycle, and creating business winners and losers. Construction is now considered one of the minor digitized sectors in the world. Some estimate that the construction industry will see the adoption of several digital technologies in the next three to ten years, including mobile devices, cloud computing, social media, smart contracts, and more. Sources: 4


The question is which companies will be willing to drive this change, and what will they find in the future? Sources: 4, 6 Plans change, new members join the project, other people leave the construction site, and different construction process changes. This will give us new insights that will allow us to detect inefficiencies and gain more flexibility on the ground. Sources: 3, 6


Rather than leading to job losses, this technology can increase productivity and reduce the cost of labor, equipment, labor costs, and other construction costs, rather than lead to job losses. A percentage improvement in the process will make a difference and significantly impact the overall cost and productivity. The digital die-cutting list will replace the analog work process as far as possible, increasing its profitability and improving the project. Sources: 3, 5


Instead of soliciting bids from three different suppliers and performing manual cost and quality comparisons, appraisers can use software to get the job done faster and more efficiently. By taking the grunt out of the estimator's work, one spends more time finding solutions to the project's strategic issues. Sources: 5

Ultimately, the ability to transmit data from conception to operation is the point at which fundamental changes must occur in the construction industry. Traditionally, this sector has focused on incremental improvements. Many believe that each project is unique. It is not possible to scale new ideas, and that adopting new technologies is impractical. Given the different levels of small construction companies, which often act as subcontractors, building new skills on a large scale is challenging. Sources: 2, 4, 5


Ultimately, the ability to transmit data from conception to operation is the point at which fundamental changes must occur in the construction industry.

McKinsey Global Institute estimates that the world will need to spend $57 trillion on infrastructure by 2030 to keep pace with global GDP growth. Sources: 1 According to the study, this dynamic is likely to continue: 81 percent of those surveyed in the construction sector said they are making giant leaps to improve their productivity digitally. The key issues emerging from this research are the need to standardize technology across the supply chain, develop a new and diverse digitally-driven workforce, and improve profitability to enable more significant investment in new technologies. However, challenges remain, with respondents pointing out that the main drivers still need to be addressed if the industry is to take full advantage of digital technology opportunities.



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