4 megatrends transforming the construction industry
After being rocked by the recession, while harnessing social media and smartphones, everyday Americans are giving up the static suburbs to refocus on progressive yet practical city living.
At the same time, cities continue to be the traditional nucleus of emerging economies such as Africa and India. Following both green policies and greener profits, commercial and residential builders in turn must pivot sharply to keep up with internationally increasing pace, priorities and pressure.
According to a recent World Economic Forum report, "Shaping the Future of Construction: A Breakthrough in Mindset and Technology," urban centers are growing by 200,000 residents per day. The sustainable development of cities, as they are the anchors of education, innovation, financing and governance, will trickle out into the suburbs and help create a sustainable society.
However, according to the report, the Engineering & Construction sector has been relatively slow to adapt to the age of sustainable development. A reluctance to embrace emerging technologies such as drones, VR and 3D printing, along with a painful talent shortage, are contributing to their sluggishness in the face of demands coming from both above and below.
The future remains bright, though, as better building materials, intelligent building information management (energy analytics and Big Data) and autonomous equipment (basically, robots) will make sustainable urban development more attractive, affordable, efficient and accessible.
Below are four key trends that are affecting the global construction industry of tomorrow:
1. The market
While it depends on who you ask in the U.S, it’s clear that sustainability is indeed in big demand across the rest of the world. As the bulk of global population growth is increasing in developing countries — which also suffer from poverty and corruption — the demand for sustainable development solutions is out of necessity.
According to the report, 65 percent of the construction industry’s growth over the next 10 years will be taking place in emerging economies. On the subject of cities, and the high-flying world of international finance, we will need all of $1 trillion in investments annually in order to build and maintain a sustainable global infrastructure.
Natural disasters are up, according to the report — three times as many occurred globally in 2015 than in 1980. Unfortunately, another extreme weather event on the scale of Superstorm Sandy potentially could put New York City underwater.
As these effects of climate change become the new normal, the construction industry needs to meet this challenge, given that 30 percent of global greenhouse gas emissions are attributable to buildings according to the report. At the same time, half of all solid waste in the United States is produced by the construction industry, with little attention paid to the consequences so far. Construction needs to reduce its footprint now.
3. The workforce
Social inclusion is one of the four key tenets of sustainable development, which manifests itself in employment, or a lack thereof. Finding talented workers to join the urban construction boom is a major pain point. According to the report, 50 percent of general contractors are concerned about finding experienced crafts workers for their workforce.
Furthermore, healthy affordable housing is scarce, as volatile organic compounds are two to five times more likely to be found inside American homes than outside. The talent shortage, combined with a confused infrastructure, means that both the construction industry and its talent are struggling to conveniently access one another.
According to the report, $1.2 trillion in infrastructure could be added by 2030 if all countries committed to specific time limits for approvals, and if the construction industry speeds up its slow permit and approval process. The requirements are currently too complicated.
For example, in India, the report says that 25 procedures are required for a typical warehouse construction permit. Militants kidnapped 18 Turkish construction workers in Baghdad in September. Good governance, another key tenet of sustainable development, is needed now in order to curb the corruption and geopolitical uncertainty that is holding back the construction industry.
Construction is clearly at a crossroads. More inclusion, better governance and smarter energy usage are all pillars of sustainable development in general, regardless of industry. Therefore, it should not be a surprise that these issues are also some of the same trends we’re seeing unfold in the construction sector, along with other fields such as food. The convergence of emerging technologies and urgent political policies soon likely will provide the spark that this space needs.