The Future of Digital Construction: Innovations & Applications & The Role of Venture Studios

The Industrial Internet, often referred to as Industry 4.0, includes opportunities beyond original applications inside contained factories and manufacturing plants, where the impact is well-documented and understood.

One of the next big frontiers is emerging as new buildings are developed, new roads, bridges and tunnels are funded as aging infrastructure is being replaced, and as public transportation systems are being built which are more connected and more efficient than any we’ve seen in our lifetimes.

The construction industry itself is an ecosystem, which makes it particularly interesting for IIoT applications and ripe for innovation. The planning, architecture, supply chain, equipment, developing, permitting and ongoing maintenance of new physical facilities are intertwined, and given the many “moving parts” can be improved through connected systems.

Any healthy ecosystem in the future includes a “digital layer” that is transforming the entire lifecycle of large construction projects, and the ongoing management and evolution of those projects for sustainable value. It’s one thing to design and construct a LEEDS certified building, for example, but another to have the connected systems in place to ensure a reduced carbon footprint, reduced energy costs, and improved quality of experience for those living or working in that building for decades to come.

The opportunities for innovation in “connected construction” seem limitless, and for good reason: this is a massive, growing industry with many aspects and angles.

Segments include hardware, firmware, middleware, software, services, applications, safety, remote operations, fleet management, environmental sensing, energy and water usage, and more. Hundreds of companies are contributing components into a somewhat fragmented marketplace as revenue forecasts for the construction industry are being published by analysts more regularly, showing steady growth through 2025 and beyond.

Private and pubic partnerships are driving a lot of activity, as populations are growing, urban areas are attracting more people, governments are expected to build more – for less cost – and the construction industry finds itself lacking the tradespeople and skills required to keep up with demand.

In this naturally labor-intensive industry, those investing in new construction, especially on large-scale projects, are looking for innovation that can improve productivity and predictability, smooth out supply chains, help manage and control projects, create more profitable outcomes, and generally make it possible to have a line of sight into overall project costs and the related ROI.

Leaders and visionaries in the construction industry recognize the opportunity to improve the “built world” with digital augmentations, as billions of low-cost sensors are being manufactured leading to “silicon economics” and the combination of more scalable software and cloud-native systems, and more secure and pervasive broadband and other protocol networks are becoming more available.

The issue is less about technology and more about creativity – and creatively being able to identify problems the digital layer can help solve, from the inception of a project to completion, and the “long tail.”

Billions of sensors connected by ubiquitous networks generate exabytes of data, and that data is really the key to deriving value in the construction industry. Data improves decision making. Data provides transparency. Data connected to autonomous systems reduces the need for human intervention when a machine behaves abnormally. Data is the lifeblood of ecosystems, which comprise layers of hardware, software, connectivity and information systems, and in the built world, having intelligent ecosystems in place means any physical structure or part of a structure can be instrumented and understood, managed through alerts to humans, or autonomously managed based on policy.

This is not to say point solutions aren’t valuable; they are, but often their value is limited. For example, a point solution for building lighting can help control the cost of energy in such a way that it pays for itself in a relatively short period of time.

However, in more of an ecosystem approach, changing the way HVAC is also managed, the way security cameras are deployed, the way a “people counting” system is installed, and the way physical security of a new building is managed is thought through as part of the design and construction process.

Beyond smart buildings, there are also massive public works projects, where everything from valuable heavy equipment can be managed as a “fleet” and sent to the right area on the job site based on the construction plan, can be observed and scheduled for maintenance, can be measured based on usage and productivity yields, and can be checked-in and checked-out securely by licensed operators.

We are now living fully in a period where disruptive technology, especially the IIoT, is causing businesses and governments to adapt and improve, and depending on how we innovate, construction companies are now able to dramatically reduce uncertainty through data acquisition, reduce the costs of projects as a result of a real-time understanding of those projects, and create competitive advantages by delivering completed, high quality projects to their customers when their operations run more smoothly and – importantly – more safely and securely.

McKinsey claimed a few years ago, “On a global scale, we calculate that the adaptation of currently demonstrated automation technologies could affect 50 percent of the world economy, or 1.2 billion employees and USD $14.6 trillion in wages. Just four countries—China, India, Japan, and the United States—account for just over half of these totals.” And while the construction industry is just one which is being disrupted for the better, it has so much potential for improved economics and outcomes given the importance of control systems ripe for more creative automation.

As both IT and OT continue to advance and converge, we are finding that often the more “physically oriented” industries like construction do not always see themselves in an evolutionary mode when it comes to connected systems. It may be hard for them to imagine what is possible through innovation. The motivation to change, to do things differently – and better – comes less quickly to them than digitally-native companies.

Challenges in construction will always be the same – productivity, quality, cost control, safety, skilled labor, project management and ongoing maintenance. It’s a hard industry with constant struggles and getting a leader’s attention on the notion of using virtual reality to help plan and monitor a construction site for example can be difficult, if not impossible.

But there are leaders.

For example, Balfour Beatty published a vision for a human-free construction site by 2050, using drones, robots, 3D-printers, and autonomous systems.

Caterpillar’s CAT Connect is being deployed on construction sites around the world, combining sensors and services to make their equipment more valuable while also growing their revenue.

PCL Construction Canada’s Terry Olynyk says constructions companies should “turn over a new leaf, if you want to grow in the next five years. I would probably appoint someone in your organization…to take stock of what technology you are utilizing and then go through a strategic planning session and challenge yourself on what you will look like in three years, five years down the road,” he said at the Toronto Buildings Show in 2018.

Here’s where Venture Studios come in.

What is often missing when it comes to fundamental change (and big opportunities, like the use of IIoT in construction companies and projects) is a bold vision that includes a synthesis of physical things connected by digital systems. Success requires expertise and experience, and construction companies are not at the forefront of digital innovation but are expert at physical construction projects which can be extraordinarily complex.

Those construction companies that do not embrace Industry 4.0 or the IIoT, who do not take advantage of laminating a digital layer into the business operations, will experience increasing levels of competition when they become a less attractive choice than their tech-forward rivals.

Construction companies who ignore the digitization potential their competitors are embracing will end up at the bottom of the industry, forced into labor-intensive projects proven to deliver low or no profit margins. Venture studios are a natural doorway to a more modern future for construction companies, who do not need to build innovation teams inside, when they can invest in innovation guided by experts, and share ownership of inventions that keep them relevant, improve their operations and differentiate their offering in this new world where the built world is made better. Safer job sites, faster construction times, less waste, and opportunities to offer services beyond the completion of a project? Who wouldn’t want to learn more about that?

Please contact me with your ideas – there is so much innovation possible.