27 MAY 2020
We are at an inflection point for the global construction industry. COVID-19 has disrupted operating conditions and brought extreme financial stress to construction firms in the short-term. However, it will also accelerate long-term change within our sector, making innovation essential to confronting longstanding issues such as lagging productivity growth.
This will change the way we work as an industry, making a new range of skills vital for RICS professionals to grasp the long-term opportunities that may arise, and deliver confidence to their clients in a changing landscape.
A challenging short-term outlook, but long-term support
COVID-19 has clouded the immediate outlook for the construction industry. Through forcing the closure of sites, output has been hit significantly, with repercussions up the supply chain. Meanwhile, for those sites that have remained open or re-opened, the introduction of social distancing measures is naturally reducing productivity. The economic impact of the pandemic will also reduce demand in the short-term, with the speed of the sector’s recovery tied to the shape of the global economic rebound and the nature of fiscal stimulus from governments globally.
Nonetheless, construction will remain a key driver of value creation in the global economy as we collectively rise to the long-term challenge of rapid urbanisation. Indeed, as we note in our recent Futures 2020 Report, more than half the global population lives in urban areas, with 1.5m people added to the global urban population every week. These long-term drivers for the industry won’t disappear. However, as the construction sector looks towards a post-pandemic recovery, it must be prepared to evolve further.
Mind the productivity gap in recovery
In collaboration with Autodesk , our latest research into the future of construction highlighted the scale of the extant productivity gap prior to the virus. Productivity within construction has grown at an average annual rate of just 1% over the past 20 years, compared with 2.8% annual growth in the overall economy. The benefit of closing this gap is significant. If construction productivity matched that of the overall economy, the improvement would be worth $1.6 trillion each year.
Faced with this gap, and a skills shortage in many areas, construction sector stakeholders are exploring industrialized construction as a long-term solution. We expect this to happen more rapidly as the industry reshapes itself following the pandemic. Our joint report explores the benefits and the implications for built environment professionals.
The benefits of industrializing construction
Industrialized construction is a system that uses innovative and integrated techniques and processes such as building information modelling (BIM) and common data environment (CDE) to connect the design-to-make process by embracing five megatrends:
This system has the potential to bring about a positive shift for the industry. Our joint report with Autodesk highlights that there was broad consensus on its potential, giving the companies that adopt it a competitive edge by improving efficiency, reducing construction costs and rework, and making construction processes safer.
Creating new roles, teams and embedding new skills
Embracing industrialised construction also means that skill sets, roles, and team structures will evolve. Greater automation will allow team members to increase time spent on value-adding tasks, whether management, decision-making, or planning, reducing time spent on manual tasks. This is already taking place among firms that have adopted industrialised practices, and there is evidence of existing roles incorporating new skills and new roles emerging to match the five megatrends - whether building in greater specialism in data analytics and AI or modular design.
The nature of teams will change too. We expect a greater blurring between offsite and on-site teams and greater collaboration between a broader range of departments to improve agility and efficiency and match client needs.
Collaborating to innovate
In the face of unparalleled upheaval and challenge in the light of COVID-19, we have seen incredible collaboration between parties. This collaboration will need to sit at the heart of long-term innovation in the construction industry.
All have a part to play. Academic institutions, for instance, are vital in ensuring the pipeline of new professionals have sufficient exposure to the megatrends and knowledge that will shape core skillsets for the future. Working with industry, they can identify and respond to the need for new specialisations. Private companies, whether architects, engineers, or contractors, will need to modify their operating models and embed new ways of working together in a tech-driven world. The role of governments will be crucial too, fostering environments where positive innovation can take place while supporting recovery. Professional bodies such as RICS also have a vital role to play in developing global construction standards, including qualifications, data and cybersecurity standards.
As an organisation, RICS is firmly committed to equipping our profession with the skills and knowledge a ‘new normal’ will require. With such disruption and technological development, supporting lifelong learning has perhaps never been more important. We also continue to review of own standards, guidance, and qualification routes to ensure that current and future RICS professionals can take advantage of opportunities that innovation will bring for the built environment.
Debra Pothier, Senior Global Manager Construction Strategist, Autodesk Education
Anil Sawhney, Director of the Infrastructure Sector, RICS