The present state of play.
At this point, the economic power of the Australian construction industry is undeniable. It generates over $350 billion in revenue and has a projected annual growth rate of 2.5 per cent over the next five years. As it currently stands, the construction industry represents around 7 per cent of Australia’s Gross Domestic Product. That is enormous. For perspective, that’s more than the contributions of manufacturing nationally (6 per cent), and just 1 per cent less than our mining industry (8 per cent).
On top of this, the ‘construction tech’ industry, wherein builders are encouraged to adopt new technologies, represents the potential to add $25 billion year-on-year value to the Australian economy within the next decade. If the value potential wasn’t enough to motivate relevant parties to invest in this frontier, you need only look at the adoption patterns in parallel industries.
While browsing LinkedIn recently, I started to notice that traditionally non-tech companies have begun investing in skilled technology jobs such as web development, software development, AI engineering and more. It’s apparent that these companies are now aggressively integrating technology to drive innovation and compete within their fields.
Innovation on the horizon
While the Australian construction industry will continue to have an immense pipeline of work thanks, in part, to Australia’s rapidly growing population, the industry’s ability to build quickly and smartly for our growing population is questionable.
Australia’s use of ageing building methods and materials, coupled with the rising cost of raw materials and restrictive government regulations has seen the local construction industry fall behind significantly. Pair this with a lack of adoption in overseas technologies and practices, such as 3D printing and drone-based site surveying, and a shortage of funding in technological advancements and you begin to see a pretty bleak forecast on Australian construction’s horizon.
This is before even considering issues with internal communication, such as poor correspondence between stakeholders, lack of confidence in data accuracy and delays in receiving information– which is equating to $8.4 billion in rework costs annually across the ANZ region. It is clear that radical changes to the industry need to be explored urgently.
Here’s the good news: if our industry underwent these changes and embraced a cultural shift of stopping the reliance of c-suites being the sole innovation generators, it could lead to a plethora of grounded and insightful ideas bringing our sector out of the dark ages.
We must engage technology professionals, young workers and uni students across different industries to help promote cross-disciplined forward thinking in the construction sector. Without this step, there is little hope for meaningful, competitive progress.
Are millennials key?
It’s easy enough to recommend this level of engagement, but what palpable methods can we implement to incentivise millennials to act upon these aims? For starters, construction firms should hold hackathons to promote innovative thinking on how construction methods could be improved and made more efficient. Even one hackathon orchestrated by three or more firms working in conjunction with each other would be a significant step forward.
This hackathon could bring together professionals such as software developers, project managers, engineers and designers who could collaborate to solve the problems facing the relevant industries. The final product could be any manner of solution – from a simple process update, to a completely new software element or product.
Firms could incentivise participants through prizes, employment offers and/or commercial collaboration to develop the winning idea into a real-world solution. This initiative could also help with recruiting talent, increasing brand awareness and fostering new forms of leadership in the industry. Overseas, there are already construction-focused hackathons such as the AEX Hackathon in the US, and ‘Hackathon: Digital Construction’ in Brussels. The latter of the two is in very close alignment with what I’m proposing here.
If all of this seems like wishful thinking (which is perhaps a symptom of the disproportionately regressive state of Australia’s construction industry), then internal innovation from current staff is another avenue that companies should invest greater funds towards. It is at least one step in the right direction.
The change within
What does internal innovation look like? For larger construction companies, implementation of an innovation fund for staff could promote innovative thinking and the nurturing of unconventional ideas.
The issue facing companies today is keeping millennials engaged. By creating avenues where staff can get involved and feel part of the company strategy, they are given freedom to explore new approaches and the liberating freedom to fail.
The main advantage for corporations adopting this particular path would be they would own the IP and gain valuable technological benefits across all facets of the business.
At WT, members of our Innovation Excellence Committee developed a software for post contract works. This program allowed for greater efficiency and accuracy with assessing builders’ construction claims. It automates simple tasks to quicken the claims process to create greater efficiencies and accuracy in our service.
If WT is capable of developing these future-facing concepts and acting swiftly upon their success, then the rest of the industry has no excuse.
Innovation in the Australian construction industry has stagnated for long enough, it’s an investment into a company’s growth and survival, not an expensive exercise for outdated senior management. We cannot hope for a bright future in this industry if we do not work together towards improving the present.