Four Technologies Shaping the Future of Construction

There have been many predictions of how technology will impact the industry—but the ones that stick must have a practical value to the job.
By Jeevan Kalanithi
February 7, 2022

It’s 2022, and construction is entering a golden age of innovation. At the outset of the pandemic, construction pivoted quickly to digital tools enabling virtual collaboration and remote site monitoring. Now, nearly two years later, many of these solutions have become embedded into daily operations and strategic planning, heralding a new era of construction technology (contech) that will impact the industry for years to come. In other words, the technology is finally catching up to the needs of project teams, and the pandemic created the context for the adoption of new ways of working.

Interest and adoption in contech continue to rise across architecture, engineering, and construction (AEC) value chains and stakeholders, even though COVID-19-related restrictions are being lifted in many places. In 2021, contech attracted record investment levels, driven by growing enthusiasm for the space among venture capital firms. In addition, policymakers are voicing support for technological solutions to pressing workforce, infrastructure and supply chain challenges, as shown by the $100 million allocated to contech development in the U.S. government’s Infrastructure Investment and Jobs Act. As new investment spurs advancements and innovation, the rate of change in construction will only accelerate.

Technology is clearly driving a paradigm shift in construction. But as the industry adapts to a new era of building, how will technology move construction forward? Over the years, there have been a lot—too many—breathless predictions of how technology will impact our industry. The technologies that stick must have a “no duh” practical value to the job, and a number are emerging as we enter 2022.

These four examples highlight how contech will impact the future of construction.

1. Advanced data analytics

Leading construction organizations are using data to inform nearly every decision, from which projects to bid on, to what key performance indicators to monitor. Through advanced data analytics, decision-makers can glean insights about how resources are allocated on the jobsite, providing valuable cost savings for projects with thin margins and tight timelines. Data modeling can also afford firms more contract opportunities by accurately projecting bids, essential in an industry with competitive win rates as low as 12%, according to research from McKinsey.

However, to make sense of these data insights and effectively harness them, the construction industry needs better data collection and organization practices. Improvements in workflow management and communication are key—everyone needs access to a single source of truth.

Until recently, experience and intuition were the key assets used in decision making, and that, unfortunately, doesn’t scale: it relies critically on an ever-decreasing pool of highly experienced experts. And it doesn’t work well on new and more complex projects. Data is now informing intuition and experience to enable better decision-making.

What do these changes look like? More and more processes will migrate out of paper form, or even spreadsheet and presentation form, and into more purpose-built cloud solutions that make it easier to see and act on project data.

As a by-product of technology adoption, firms can now turn to technology as a viable solution to attract new recruits to the construction industry. In a 2021 year-end industry survey conducted by OpenSpace, for example, 68% of respondents felt that technology would attract people who otherwise would not be interested in construction jobs. New technologies could go a long way in easing concerns about skilled labor shortages, as reflected in the U.S. Chamber of Commerce Commercial Construction Index for Q3 2021.

2. Digital twins and virtual site replicas

Bringing the jobsite offsite has become essential as builders and architects navigate through a new period of remote collaboration. Hybrid work is here to stay: 84% of construction professionals say that moving forward, they will use these technologies to reduce site visits in favor of a more flexible work environment. Put plainly, it was hard enough getting the right people to the site at the right time before the pandemic; new technology has finally made it feasible to get people to the site virtually, saving a lot of time and schedule implications.

As more work is achieved remotely, digital twins, which are virtual representations of construction sites, are becoming pivotal to the building process. These replicas connect digital tools and data to solve real-world construction issues, revolutionizing the way construction will be planned in the future. Providing a real-time 360-degree view of jobsites leads to more-efficient project monitoring, fewer site visits, and easier risk mitigation and troubleshooting. McKinsey projects that the construction industry could increase productivity by up to 60% in the future through digital twin technology.

Building information modeling (BIM) and BIM coordination provide additional digital planning tools. These 3D digital models are essential for formulating building design and structure, while virtual twins offer a live view of construction processes at work. These two types of virtual site replicas work together to illustrate potential problems and cost-saving solutions during the construction process. OpenSpace survey respondents support the idea that BIM improves collaboration and decision-making between engineering and architectural teams, with 79% of those surveyed citing BIM modeling or coordination as the most important contech skills for 2022.

3. Internet of Things

Data has enormous potential to solve challenges while opening new opportunities for project and resource management in construction. But to realize these possibilities, data must be accurate, timely and free of errors. "Internet of Things," a network of digitally interconnected devices, enables reliable, remote data capture to automate and streamline vital construction processes, like utility mapping.

Internet of Things applications deliver automated data capture and storage while unlocking further capabilities with analytics and even AI/ML. In the past few years, many firms have begun using Internet of Things-enabled sensors to monitor people and equipment on location. These sensors serve as a second set of eyes on the jobsite, which can help improve resource management, mitigate safety risks and preemptively identify maintenance needs.

However, implementing end-to-end Internet of Things solutions is complicated, requiring coordination between asset owners, solution providers and multiple network providers. These issues have been a show-stopper for the use of many Internet of Things solutions, and reasonably so: Teams don’t have time to deal with complex installation processes or solutions that need constant care and feeding. But some of these headaches will begin to ease, as advances in 5G provide always-on connectivity capable of performing large data transfers without the hassle.

4. Industrialized construction

Amid the labor shortage and rising demand for resources, the industry could greatly benefit from approaching construction with a manufacturing mindset. Industrialized construction (IC) relies on BIM and other virtual prototyping technologies to bring manufacturing-like standardization and economies of scale to projects. (IC is a sort of update to methodologies such as prefab and modular.) With IC, the production of project components shifts offsite. Builders report that manufacturing construction materials on a large scale and then shipping them to the jobsite for assembly allows for better quality control, less waste, lower costs and more. This update on yesterday’s prefab approach is gaining in popularity, partly in response to market pressures as well as demands for more affordable and sustainable construction methods.

To gain the full benefits of IC, companies need to reconsider core elements of their operations, from revenue planning to insurance. For instance, adopting modular approaches requires extensive planning on the part of builders to meet tomorrow’s IC standards for production and sustainability. Adapting to these stringent new benchmarks is critical to scaling production to meet the ever-increasing demand for new builds.

The future of construction

With the need for construction rising amid supply chain challenges and a persistent labor squeeze, achieving a competitive edge increasingly comes down to embracing and deploying technology solutions. It’s not enough, though, to simply introduce new tools. Implementation is as much about cultural innovation in organizations as technical capacity. Realizing the possibilities of tech-enabled construction, like the four examples cited above, requires new operating models. Builders must embrace these new contech skills, processes and partnerships to successfully move forward in the construction space.

The best technologies, of course, should help meet builders where they are, and help them solve today’s problems. Those that require too much change, too fast, should rightly fail. But of those technologies that do help in the here and now, some will emerge that not only solve immediate problems but in fact provide onramps to truly transformative ways of constructing our built world.

by Jeevan Kalanithi
Jeevan Kalanithi is the co-founder and CEO of OpenSpace, a construction technology company using off-the-shelf cameras and artificial intelligence to automatically create complete visual records of job sites and analyze site status and progress. Most recently, Jeevan was an Entrepreneur-in-Residence at Lux Capital. Prior to founding OpenSpace in 2017, Jeevan sold his first company, Sifteo, to 3D Robotics, where he eventually became President. At 3D Robotics, Jeevan helped build scanning tools for the construction industry.

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