Technology is seeping slowly but surely into a variety of large industries. As the technology family grows and marries other sectors, a new portmanteau of sub-sectors keeps emerging. Terms such as EdTech (Education Technology), FinTech (Financial Technology), PropTech (Property Technology), and Reg Tech (Regulatory Technology) are now widely in use. As the multi-dollar industries continue to influence the global markets, a new neologism has emerged from the marriage of construction and technology – ConTech.
ConTech, in a nutshell, is using innovative technology such as Building Information Modelling (BIM) to simplify the entire project cycle of the construction industry. BIM is an intelligent 3D model-based process that gives architecture, engineering, and construction (AEC) professionals the insight and tools to plan, design, construct, and manage buildings and infrastructure more efficiently. As a testament to the wide adoption of Building Information Modelling (BIM) is the increased need for its user training as the construction sector gradually adopts a work smart, not work hard approach.
Differences between the ConTech and PropTech
Although ConTech is under the umbrella of PropTech due to overlaps in activities, they are distinctively different.
PropTech covers the application of information technology and platform economics to the property market which encompasses residential real estate, construction, commercial property, finance, and property management. This digital transformation of the property industry offers more convenience over the traditionally time consuming manual processes and one of the biggest opportunities is in making smarter and faster decisions using the huge swathes of data to which real estate organizations have access to.
The ConTech ecosystem refers to a vision where all parties in construction such as the contractors, owners, architects, equipment manufacturers, and insurers are digitally connected in real-time. However, having and continuing to improve a solution’s Application Programming Interface (API) will go a long way towards making these solutions truly integrated and enabling a safer, efficient, and stronger future for the construction industry.
Trends for ConTech
A push of proliferation for ConTech (Remote Work)
While many employees continue to work remotely on their laptops during the lockdowns, Covid19 has forced many hands-on sectors like construction to come to a halt. This has led to an acceleration of adoption of ConTech in the construction industry with many pushing to invest in bringing robotics, AI, and other automated tools into building sites to ensure the safety of their employees while maintaining productivity. This current situation has also caused a paradigm shift to focus on the viability of the entire construction rather than the return of investment when investing in a new digital product. A virtual tour is an example of new tools being used to monitor and update stakeholders on the site progress. Precise features such as digital recording can also be used during the tours for managers to track multiple projects or to aid in resolving conflict should they arise in the future.
Data and predictive analytics will reshape the industry
Construction is one of the few industries that is still centred on the use of pens and paper especially for blueprints and design drawings, due to the additional cost needed to switch. However, these traditional workings are fine till the construction is met with issues, then the time spent on searching for answers on these papers will impede the sharing of information and stun productivity. By migrating data onto seamless paperless technology, data can be used to identify substantial improvement potential, optimise processes, or realise efficiency gains. Figure 1 further illustrates more benefits by optimising the large swathes of data and turning them into current useful or future insights.
These predictive analytics have proven to provide more efficient and effective solutions to reduce the project cycle timelines and increase cost-savings. As a matter of fact, big data and its related technologies have been identified as part of the industry transformation framework of the World Economic Forum (WEF) that will profoundly change the industry system. Hence, while it will take some time, data and predictive analytics will slowly but surely reshape this “brick and mortar” industry.
Untapped market segments
With the introduction of new working models due to the advent of ConTech, productivity has significantly increased but there is still a vast potential for investing and innovating in this burgeoning field. Investors have identified the construction sector as the next pot of gold and some of these opportunities are:
- Developing building information modelling systems
- Employing low-cost, sustainable building materials and autonomous construction equipment
- Using drones and wearables at construction sites
- Applying augmented/virtual/mixed reality in design and development
- Leveraging smart signalling systems and predictive monitoring
- Productising blockchain
It is considered a low-hanging fruit for investors to catch on considering the slower adoption of ConTech compared to the rest of the hybrid sub-sectors. Visionary investors are poised to jump at the massive untapped opportunities in this industry as returns are expected to be higher. When an investment vehicle offers a high rate of return, a higher risk accompanies it. Thus, before one invests, this is prudent to obtain the right advice and do background research before making a decision.
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Imagining construction’s digital future, Mckinsey.com
PropTech: What is it and how to address the new wave of real estate startups?, Medium.com
How AI and remote collaboration tools could help the construction industry get back to work, Venturebeat.com
Shaping the Future of Construction A Breakthrough in Mindset and Technology, Weforum.org
The Skyrocketing ConTech Sector Is Capturing New Market Segments, Forbes.com