This report is the second publication of the multi-year Future of Construction project, guiding and supporting the Engineering and Construction industry in its current (digital) transformation. The first report, Shaping the Future of Construction: A Breakthrough in Mindset and Technology, was launched in May 2016. It described the state of the industry, assessed relevant global trends and their impact on the industry, called for action at corporate, industry and government levels and outlined a comprehensive industry-transformation framework with over 30 measures and best practices. A key finding is that many innovations have emerged but have not yet been broadly adopted.
The second report looks at possible remedies, drawing key lessons and policy recommendations from leading innovators and disruptors, with a focus on fostering wider adoption of innovation. By describing how flagship projects have implemented innovations, it showcases the transformative potential of innovations. This report showcases and analyses 10 Lighthouse innovation cases – prominent flagship projects as well as start-ups and pilot projects – that demonstrate the potential of innovation in construction and give a glimpse of the industry’s future. Their stories not only serve as an inspiration but also describe vividly the typical challenges that innovators face, and show how to engage and overcome those challenges.
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Many industry players have yet to fully adopt BIM, despite its advantages. Design and engineering firms lead the way, followed by construction firms. Even though BIM could significantly transform operations and management (O&M), asset operators lag behind other industry players, mainly because BIM is still inaccurately perceived as being a purely 3D design application, and because commercial BIM applications to support O&M remain scarce.
O&M applications account for just 10 of 206 commercial applications listed in an industry database of open-source BIM applications. The Future of Construction initiative created three scenarios depicting how the IU (infrastructure and urban development) industry could look in the future. To develop the scenarios, the World Economic Forum and The Boston Consulting Group hosted a workshop on 27 July 2017 in Berlin.
This report explains the three scenarios and the strategic implications for each. It also identifies the transformation imperatives companies should address regardless of which scenarios materialise. The Future of Construction initiative provides this analysis to encourage IU decision-makers to think strategically about the future and take appropriate actions to adopt digital technologies and change business models sooner rather than later.
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This plan was created by the World Economic Forum’s Future of Construction Initiative in collaboration with The Boston Consulting Group (BCG) based on discussions at a roundtable held on 26 July 2017, in BCG’s Berlin office.
At the roundtable, 32 representatives from leading global design, engineering and construction firms, industry associations, government and academic institutions discussed key issues and developed measures to be implemented at company-, industry- and government-level. These are detailed in the action plan outlined in this report.
To improve productivity and address global challenges, the IU (infrastructure and urban development) industry must overcome talent obstacles to attract, qualify and retain a sufficient number of people with relevant skills. This report provides an action plan with steps that companies, industry organisations and government can take to reduce the talent gap.
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The World Economic Forum engages the foremost political, business, cultural and other leaders of society to shape global, regional and industry agendas. It was established in 1971 as a not-for-profit foundation and is headquartered in Geneva, Switzerland. It is independent, impartial and not tied to any special interests.
BIM adoption varies greatly by country and level of economic development. In more advanced economies, most firms use BIM, though not on all projects and not at the highest levels. A mandate to use BIM on government-sponsored projects has made the UK a frontrunner. Even so, only 46% of the country’s infrastructure companies describe themselves as using BIM Level 2. In Germany, where BIM use is not yet fully mandated, just 25% of infrastructure companies use BIM Level 2. In emerging and developing countries, adoption rates are even lower.
To improve productivity, the IU (infrastructure and urban development) industry must accelerate BIM adoption. Towards that end, governors of the World Economic Forum’s Future of Construction Initiative have prioritised BIM adoption as a critical step toward transforming this industry. This report summarises the key insights and recommended actions that were made at the October 2017 roundtable in London. It highlights the recommended actions that companies, industry organisations and governments are advised to implement to accelerate BIM adoption and to better capitalise on what the technology can offer.
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In this report, the McKinsey Global Institute (MGI) and the McKinsey Capital Projects & Infrastructure Practice examine the root causes of poor productivity growth in the construction industry. They explore practical ways to improve the situation and discuss the beginnings of a shift in parts of the sector toward a system of mass production, standardisation, prefabrication, and modularisation – a production system that has the potential to boost productivity by five to ten times, depending on the sector.
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The world invests some $2.5 trillion a year in the transportation, power, water and telecom systems on which businesses and populations depend. Yet this amount continues to fall short of the world’s ever-expanding needs, which results in lower economic growth and deprives citizens of essential services.
Building on the report Infrastructure productivity: How to save $1 trillion a year, this report updates the previous estimates of the world’s infrastructure needs and projected investment shortfalls. It also offers refined recommendations for bridging those gaps.
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Based on McKinsey & Company’s work with governments and private-sector infrastructure players around the world, an extensive literature review and drawing on insights from more than 400 case examples, this report by the McKinsey Global Institute (MGI) advocates that if infrastructure owners around the world were to adopt proven best practice, they could increase the productivity of infrastructure investment and achieve savings of 40%.
Scaling up best practice could save an average of $1 trillion a year in infrastructure costs over the next 18 years. A productivity boost of this magnitude is achievable in many countries if they are willing to invest in a systematic approach to infrastructure that drives improvement across agencies and private-sector owners and contractors.
This report looks at the high-level challenges in infrastructure delivery and how these can potentially be addressed. Action topics include eliminating waste, improving the selection of projects and streamlining their delivery. It also includes best-practice examples from around the world, which would make a major difference if scaled up globally.
The report identifies three strategies that could help deliver savings:
- Optimise project portfolios.
- Streamline delivery.
- Make the most of existing infrastructure.
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Advances in digital technologies and data are transforming the way we live our lives. The built environment is becoming smarter, with the rise of intelligent infrastructure – enabled by the use of machine learning and artificial intelligence. Innovative technologies drive efficiencies, accelerate the transition to net zero and optimise the performance of national built assets.
Access to information (as data) of the right quality and at the right time, in a format that is trusted by all parties, is increasingly recognised as a critical enabler of the construction sector’s digital transformation. It has the potential to drive down costs in the construction and operation of built assets and improve quality. This report aims to answer two main questions, while highlighting the benefits of information management:
– How are construction and infrastructure organisations creating, managing and making use of quality and timely information?
– What value does this deliver for organisations, their customers and other stakeholders?
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In the past 10 years, the KPMG’s Global Infrastructure practice has been offering insights of emerging infrastructure trends.
In 2020, even the best laid plans were hijacked by COVID-19.
The 2021 report strives to go beyond identifying the trends to offer a global perspective on how they are creating new opportunities and challenges for infrastructure professionals. It explains how each trend will evolve, predicts how the infrastructure industry will respond and focuses on the wider impacts on society, including the opportunities these trends will unlock.
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The construction industry, one of the world’s top 10 employers, faces growing demand as urbanisation accelerates, especially in developing countries. The UN predicts that 68% of people will live in cities by 2050. And, across the globe, there is a growing need for new infrastructure. However, labour shortages threaten the industry, especially in Europe, and productivity has not increased for decades.
The industry has also been slow to adopt the technologies that are needed for higher productivity and to meet the demands of an increasingly digital world. Enterprises must tackle legacy issues, as well as plan for a digital future.
The construction industry faces ongoing issues around low productivity and margins, but digital disruption is challenging the status quo. In Q4 2017, EY (Ernst & Young) took on two significant initiatives to assess and benchmark how leading construction and engineering companies see the impact of technology in their sector. The first was a series of in-person interviews and workshops with over 80 top players in the industry. The second, running parallel to the series, was EY’s Global Construction & Engineering Survey, which analysed where the industry stands today and how the majority views the potential impact of technology in the future. This report presents the survey’s findings and relevant market trends.
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