Which Investments in Construction Industry Will Raise Productivity

by | Feb 21, 2023

Investments That Could Raise Productivity 2023-24

According to data from Cemex Ventures, investments in the construction tech ecosystem reached a record $4.5B in 2021, triple the amount invested in 2020. What will finally move the productivity needle from stagnant to positive? The affect on GNP growth would be substantial.

Investors and vendors are still betting contractors will be buyers of their platforms, tools and apps to automate manual tasks, replace paperwork with data, and streamline workflows and collaboration among stakeholders. Contractors will naturally look for the path of least resistance — low cost investments made out of current cash flow.


Do More With Less

Tech innovations will improve construction productivity:

  • Tech that tightens data integration and workflow automation among stakeholders. Enables more digital management and collaboration. Especially if such tech can automate the expensive professional services costs of implementation…
  • Tech that adds value to a existing investments, platforms like Procore, Trimble, CMIC, etc. Buyers have already heavily invested, products that augment those investments will be sought after.
  • Tech that leverages manufacturing efficiencies. Prefabrication can reduce field operations costs, although building codes and permitting will have to be relaxed.
  • Materials technology that improves building performance with less labor.
  • Tech for field operations: The jobsite and those who work there have to go digital and use the same data as HQ. Such technology must collect digital field data in ways acceptable to the culture of field operations. Consumer mobile platforms are key, as well as “smart” tools and machinery.
  • Tech that implements a “Six Sigma” approach to safety: In software and manufacturing, you can’t test-in quality, it must be built-in. The same principle should apply to safety during construction.
  • Tech that raises the productivity of our most expensive resources: People. Tech that creates an intelligent assistant to architects and engineers. Tech that automates routine jobsite and project management functions. Enables efficient hybrid offices for knowledge workers.
  • Workforce development: Public, private, union, education institutions will play a part. Software will play a role here to track skill development in an industry where specific skills used on projects matters more than who you worked for.
  • Tech that targets specific industries. Not all buildings are the same; roads are built differently from hospitals, etc. If a technology can help someone build a better data center, for example, the tech company owners of such projects will pay attention. 

Non tech innovations to improve productivity:

  • Business models enabling more “vertical” integration: One way to reduce stakeholder complexity is by combining design with build, for example, or even owner+design+build+operate. Such business structures could better absorb technology risk, increase the use of prefabrication, etc.
  • Increased M&A: The bigger the firm, the more it’s able to afford investments in tech and process improvement.
  • Regulatory reform: Restrictive residential zoning rules not only prevent building; they also drive up costs. Permitting needs to permit new tech to be tested, even though it’s riskier than today’s 30 year old technologies. Prefab!
  • Immigration reform: We need more skilled labor than we can quickly create ourselves. At a minimum, demand congress approve temporary work visas.
  • New leadership & management methods. Other industries have innovated and changed, construction can get out of its productivity slump too. But its leadership has to be open to new methods, calculated risks in new tech, investment — and likely a new generation of leadership.

Impractical tech innovations, wait and see

  • Sensors/Internet of things — Wait for 5G/6G/satellite communications networks.
  • Blockchain, Crypto — A technology in search of a viable use case. Databases are more affordable.
  • Robots — Wait and see for proof of quality, cost effectiveness
  • 3-D printing — Wait and see for proof of quality, cost effectiveness