The risks and rewards of new construction technologies
A recent CEDA report found technological advances over the next 10 to 15 years mean 40% of Australia’s workforce faces a high probability of redundancy, writes Martin Loosemore.
A recent CEDA report found technological advances over the next 10 to 15 years mean 40% of Australia’s workforce faces a high probability of redundancy, writes Martin Loosemore.
OPINION: A recent CEDA report found that due to technological advances over the next 10 to 15 years, about 40 per cent of Australia’s workforce face a high probability of being made redundant.
Certainly, if we believe everything we read in the construction press, we appear to be moving inexorably towards a ‘machine-dominated’ industry which will revolutionise the way we work and interact in the future. Every day, we are bombarded with new technological breakthroughs which promise to ‘transform’ the construction industry and produce a step-change in costs, quality, productivity, safety, sustainability and even the gender balance. The apparent urgency to adopt these new technologies seems great, given stories of overseas competitors investing in this area.
Some of the new revolutionary technologies we hear about in the press include:
Certainly there is some reliable evidence that some of these technologies can produce productivity improvements in the range of 30 to 40 per cent. However, technology is also a dangerous and bottomless pit for the unwary and businesses must be very careful to assess the risks and opportunities for their business before making the decision to invest.
In doing this, a few key insights are useful.
First, it is important to appreciate that firms in different countries adopt technologies for very different reasons. For example, Singaporean firms often use technology to reduce their dependence on unreliable migrant labour, while Scandinavian firms to allow them to build in low temperatures and short days.
Second, it is important to appreciate that every business is unique in terms of its ‘absorptive capacity’ to successfully integrate a new technology into its business and will need a different strategy to do so.
Third, it is important to treat claims of business transformation with healthy scepticism. Many of these new technologies are in their experimental phases and are not yet backed up with clear evidence of benefits. As numerous well-intentioned companies who have rushed into the latest technology will sadly tell you, it is all too easy to be swept away with the excitement and euphoria of it all and waste huge amounts of money with little tangible return.
Admittedly, a few firms are willing to incur these costs in the anticipation of positioning themselves as ‘first movers’ in a lucrative market. But most regret their haste and get drawn into a bottomless money pit which is increasingly hard to retreat from. Not only can unary firms get drawn into a vicious cycle of investment, but they can see the technology they adopted become quickly redundant as their competitors learn their hard lessons for free to grab their market share. These firms have learnt the most important lesson in technology innovation the hard way. It is not the technology that gives you a competitive advantage, but how effectively it is used and integrated into your business and supply chain.
Certainly, there are many exciting technological opportunities for us all to explore in bringing about a much needed increase in productivity, efficiency, quality, safety and sustainability. Relatively speaking, construction remains a relatively low-technology, labour-intensive, craft-based industry in comparison to other industries such as manufacturing. The competitive advantage for those who adopt new technology could potentially be enormous. It is also true that other countries have developed clear plans, strategies and targets to automate and digitise their construction industries and that we seem to be falling behind in the global construction innovation stakes. However, it is also important to be cognisant of the many risks involved in adopting new technologies.
Apart from the obvious dangers associated with constant obsolescence, here are some examples of less obvious technology innovation risks:
The future looks exciting and different and one can only imagine what the construction industry will look like in 10 years. As technology rapidly changes and becomes more affordable, success will depend on shifting strategy away from the ownership and possession of technological resources to focusing on the ‘absorptive capacities’ which will enable firms to integrate and use the new technologies more effectively than their rivals. The trick in taking advantage of the many potential benefits which technology can hold is to develop an effective technology integration strategy which will navigate the risks and the opportunities carefully.
Martin Loosemore is a Professor of Construction Management at UNSW.
This opinion piece was first published in Sourceable.