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Urban Construction

Framing the Opportunity:
The Case for Construction Technology 

Every four years, the American Society of Civil Engineers (ASCE) releases a report card assessing the quality of bridges, roads, transit systems, and other similar assets across the US. With each report card, ASCE underscores that our nation’s infrastructure is in a continued state of deterioration which puts lives at risk and will impede our ability to compete in the global economy and build for our future. The $1.2 trillion Bipartisan Infrastructure Bill represents a massive injection of capital––the kind of increased investment that ASCE has been advocating in order to address an estimated $2.59 trillion 10-year investment gap. But because the construction industry has failed to increase productivity over the last 30 years, this sizable investment in our nation’s infrastructure will be insufficient.

Over the next ten years, the US construction market is projected to grow by 42% from $10.7 trillion to $15.2 trillion according to Oxford Economics. How will such growth unfold and who will benefit?

As it stands, the construction industry is antiquated and inefficient. According to McKinsey, construction is among the least digitized industries in the US, and nearly $1 trillion in construction costs is wasted every year. Furthermore, the construction workforce is aging and retiring. According to the U.S. Bureau of Labor Statistics, the average worker age in the construction industry is increasing at a faster rate than all other U.S. industries combined. Thus, even as the construction sector receives the capital that it has long required, this labor shortage means these dollars may not stretch as far as anticipated. In response to the shortage of workers, employers must offer higher salaries and other benefits to attract both new talent and the skilled workers necessary for large-scale infrastructure projects. The labor shortage also means that many projects may be delayed, pushing them over-budget. The American Association of General Contractors approximates that on average, publicly funded projects cost 20% more than estimated due to these increased labor costs.

The industry looks to apprenticeships and other job-training programs in an attempt to increase the labor supply and talent pipeline. But these approaches require longer time frames than those necessary to improve ROI for this round of capital investment. Innovation and technology can be leveraged to address these problems in the short term, while continual innovation can have beneficial long-term effects, such as the elimination of costs related to labor shortages altogether. For example, one reason that young workers pass over jobs in construction is that they perceive them as dirty and dangerous. New technologies are enabling improvements to worker safety through automation and robotics that can therefore attract a younger, more diverse workforce. 

Other innovations and technologies are revolutionizing the efficiency with which capital can be allocated. For instance, digital twin technologies from companies like Willow and AI innovations from companies like Aren enable construction firms to harness data and perform condition-based maintenance, which results in more efficient investment of capital in infrastructure. 

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