The construction industry often gets a bad rap when it comes to adopting technology. It is perceived by many that construction lags behind other industries, but not many take the time to ask why that may be the case, if at all.
Recently, Bridgit’s COO and Co-founder, Lauren Lake, had the opportunity to sit and talk with René Morkos, CEO and founder of ALICE Technologies, about construction digitization and how it compares with other industries.
If you’re unfamiliar with ALICE Technologies or Morkos, here’s a quick overview:
- René Morkos is the Founder and Chief Executive Officer (CEO) at ALICE Technologies Inc., as well as a Professor at Stanford University.
- Morkos invented the World’s first Generative Construction Simulator that ingests BIM models and automatically generates millions of valid simulations to build a project.
- Through ALICE, Morkos has already helped contractors reduce project durations by an average of 17% and labor and equipment costs by average of 13%
- As a professor of Managing Fabrication and Construction at Stanford, Morkos is on the front lines teaching a new breed of construction production management. By using artificial intelligence, machine learning, and other theories Morkos has changed how the problem of construction production management is both formulated and solved.
Needless to say, René is one of the leading minds in artificial intelligence for the construction industry and has plenty of insight into the future of construction digitization and contractor data management.
Here are some of the key takeaways from our conversation with René.
It’s unfair to compare construction tech adoption with other industries
We often hear that construction is lagging behind other industries when it comes to adopting new technologies. McKinsey has a now-infamous graph that shows technology adoption across industries, clearly indicating that construction has fallen behind, but the graph doesn’t tell the full story.
There is validity to McKinsey’s study, the report is basically saying that the dollar of value produced per hour of work has stayed the same since the 60’s, whereas other industries have become more efficient through technology adoption. While this report has been validated and is certainly true, it often paints construction as a non-innovative industry. Though construction is the second least digitized industry across the globe, blaming it on a lack of innovation is something Morkos takes exception with.
“The question the report doesn’t answer is ‘Why?’. Most people think that construction folks are just generally not that innovative,” explains Morkos, “The only industry less digitized than construction is agriculture. The reason that I’ve found, from over a decade of research, is that construction tends to work on bigger, more difficult problems than other fields.”
Think of it this way, the construction industry is tasked with building custom buildings and factories, for unique clients and products, sometimes hundreds of miles away from civilization. That’s not something many other industries are asked to do. In some cases, according to Morkos, “these projects represent the most difficult and complex problems our species needs to solve.”
The other reason why construction lags behind other industries is actually quite simple – for us to digitize construction we have to wait for the input, which means that design needs to be digitized. This has happened, to a degree, with the advent of Building Information Modelling (BIM).
With BIM, it’s important to keep in mind that it’s essentially two kinds of technology:
- Object oriented – For example, the software understands there is a column made with concrete on the third floor.
- Parametric – For example, the software understands that when a window or staircase is moved, the design needs to update to reflect those changes.
The technology for BIM has been around since the 80’s, but the key issue is that buildings are bigger and more complex than the software engines can handle. It’s actually a matter of the processing speed of the software not being able to catch up to what the construction industry needed.
“It’s only in 2015, in my mind, that the processors started to become fast enough that they could actually crunch buildings in 3D, put them in the cloud, and locate and visualize them,” explains Markos. “I don’t think we could really digitize construction until 2015 or later.”
How digitization moved the needle in the finance industry
The “Construction Renaissance”, as Morkos calls it, only really started in 2017 with over $140 billion of VC funding poured into construction. Research has shown that construction actually rapidly adopts technology within specific sectors like masonry or electricity, but the challenge is that technology that spans across multiple disciplines is taking a little more time.
“What I’ve seen, and my really strong opinion is that it’s not because we aren’t innovative. Simply put, it’s that we’ve had to wait for the machines to catch up,” says Markos. “If you look at the history of digitization, the first thing to be digitized was finances. How hard is that? You’ve got a bunch of numbers moving between accounts, that’s really easy in comparison.”
There’s reason for excitement when looking at the strides the finance industry has taken when it comes to digitization though. In the 1980’s, the finance industry represented between 10-12% of the GDP. Today that number has grown to 22%, meaning that salaries are higher and that people are better paid.
“What I think will happen with construction,” explains Morkos, “is that as we start to digitize construction and introduce more efficiency, we will tend to have better jobs that are higher paid for less work hours.”
The evidence of change
As a construction software company, we’ve had our own challenges when dealing with the assumption that construction just isn’t an innovative industry. When starting out, our co-founders were constantly faced with people outside of the construction industry expressing their concern that the industry just wasn’t ready for digitization.
However, through countless conversations with construction professionals, we found a clear disconnect between how people perceived construction innovation and how willing the industry is to adopt new technologies. In short, construction professionals want to use more technology to drive the efficiency and effectiveness of their work, but like mentioned earlier, the software and technology needs to be able to keep up with the complex nature of the industry.
So we pushed forward and created Bridgit Bench, the construction industry’s leading workforce intelligence solution. As it turns out, general contractors across North America are not only willing to re-evaluate their current workforce planning process, they immediately see the value in having a centralized database that can house, and forecast, their entire workforce strategy. Here’s a look at how some of our customers are using Bridgit Bench today:
- Power Construction is using the project phases in Bridgit Bench to track projects through to completion and quickly update resource allocations when construction becomes fluid.
- Kajima Building and Design Group have improved visibility across their management team and are building project team templates to show upcoming staffing needs that need to be assigned.
- WCS Construction is doing resource planning in a fraction of the time and improving collaboration with the larger team.
- Skanska is saving 9-14 hours each week managing their workforce and have also improved accessibility across their management team.
When it comes down to it, construction is constantly innovating and coming up with new ways to build more efficiently and effectively, so to say that construction is lagging behind in this regard is, well, nonsense. The industry simply needs tools that can manage the complexity of construction projects and organizations, and the construction tech industry is excited to help close that gap. For more information about workforce planning, or tips for improving the effectiveness of your workforce planning, visit our blog.