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Justin Reginato, Ph.D.
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Predictions for a technological revolution in construction, Part 1

12/1/2012

9 Comments

 
A running theme of this blog (and of my research and personal interests) is that the construction industry is going to see a dramatic and positive change in how it adopts technology.  I've been mulling this over for two days now and am going to write about some of my thoughts on this subject in three parts, with this being the first (I should be grading assignments and exams, but I always find it more interesting to write, or even clean my rain gutters, when grading is the alternative...).

The construction industry spends an incredibly low amount of money on IT.  The lowest among many industries integral to our country's economy:
Picture
The data in the figure above was compiled by Gartner and was reported by ENR and can be found here.  The ENR article reiterates the oft-used Bureau of Labor stat that 70% of productivity gains come from IT. So there's a huge opportunity being lost to improve productivity, which means there's a huge opportunity to be gained.

*Side note 1: Just because the construction industry is losing out on productivity gains based on IT investments, it is making efforts to improve productivity.  As my friend Thaís da C. L. Alves pointed out to me, the construction industry is making productivity gains in off-site fabrication, as discussed in this paper (which I haven't yet read in its entirety).

*Side note 2: I understand that the construction industry cannot just wave a magic wand and increase IT spending to 5% of revenues without there being ramifications, good and bad.  Construction is a competitive business with low gross margins.  Low technology spending, given the low overall relative profitability of the industry, is to be expected.

Side note 2 notwithstanding, I will be writing follow-up posts as to why the construction industry has been slow to adopt new productivity-enhancing IT tools and how that's going to change in the not-so-distant future.  Also, the data above represents IT spending across the industry.  Some companies have increased their IT spending with very positive results.  However, the bottom line is that currently, the construction industry spends way less than other industries on IT and is not capitalizing on productivity gains enabled by IT.
9 Comments
Ari Isaak link
12/5/2012 12:57:00 pm

I am very interested in this topic. I think the game has changed for the construction industry with the advent of ubiquitous and robust wireless networks alongside mobile devices which can handle real processing. IT services can be easily brought onto the construction site. IT can encourage or streamline the implementation of principals outlined by groups like the Lean Construction Institute. As an the owner of an IT firm we make a real investment in understanding these goals and implementing technology which complements workflows for AEC firms. Below is a link to a short video where we have implemented this concept. We hope to replicate this idea moving forward. We see real opportunities here.

http://www.youtube.com/watch?v=B6jVqJ3E0_w

Reply
Justin
12/7/2012 03:34:03 pm

Cool video Ari. Do you work in other markets besides San Diego?

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Ari Isaak link
12/7/2012 04:45:37 pm

We work with firms across the country, but mostly we work in California. We are very interested in High Speed Rail. Please contact me if you would like to explore an idea. My contact info ca be found at our website.

www.evarigisconsulting.com

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