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Construction in America

If Construction Revitalized the U.S. Economy By 2040

Photo: Courtesy of Flávio Santos

The construction industry — as well as the economy as a whole — is booming. Efficiency of the “construction-dollar” is at an all-time high. Construction projects today are finished much faster, with less mistakes and rework, than they were just 23 years ago. Dollar for dollar, construction projects cost 20 percent less than they did in 2017.

Roads, bridges and more

The infrastructure improvements of the last two-plus decades have had a big impact on the economy, job creation, and our overall quality of life. Clean energy systems are thriving and our roadways, bridges and tunnels have been modernized to account for our now common self-driving vehicles. U.S. transportation systems are the envy of the world — gone are the days of references to our “third-world airports.”

And it’s not just infrastructure — commercial buildings and homes have also enjoyed the construction revolution. The speed at which we can now construct and renovate these properties has enabled both businesses and consumers to reinvest in their built environment. Over the past two decades, our homes, offices, stores and factories have been rapidly modernized, and the result has been a significantly more enjoyable personal and professional life for all.

Efficiency reigns

Rapid gains in efficiency drove construction costs down significantly over the past two decades and construction is now as predictable as manufacturing. We have schedules that we can trust, fewer mistakes that require rework, and a more efficient use of both manpower and materials.

But the most impressive component of our incredibly efficient construction-dollar in 2040 is the ancillary impact throughout the greater economy. The advent and rapid proliferation of the Internet of Things and “smart everything” — coupled with our investment in advanced technology and communications infrastructure — created a massive business advantage in private industry. Businesses in 2040 can realize unprecedented levels of efficiency because of the competitive advantage made possible with our new communications infrastructure.

Improving projections

As these massive advantages of more transparent costs of construction and greater efficiency of maintaining and running modern properties became clear, governments, businesses and consumers all began re-investing in their built environment. With this re-investment came massive job growth — and not just in construction jobs. All our new infrastructure improvements created a new wave of good paying service-based positions, and the private sector was able to expand under the lift provided by their re-investment in their own infrastructure. Better buildings and better infrastructure have resulted in better-run, more profitable businesses. Growth begets growth, as we are now continually investing in our newly predictable and scalable construction industry.

How did we get here?  

Most of you might remember 2017 as an incredibly volatile year — with a severe partisan divide the country hadn’t seen for almost 50 years. We were embroiled in debate around multiple issues, but in hindsight it’s easy to recognize that the real core of our problems stemmed from an economic system that was failing huge portions of our population.

“It’s the economy, stupid” never rang truer than it did in those troubled times, as people came to understand that repairing the financial health of what we’ve historically considered the middle or working blue collar class was the best way to bring us all together again.

At the time, campaign rhetoric claimed that the answer was to “bring back the manufacturing jobs.” But reality quickly set in that the days of factory floors swarming with thousands of workers were behind us. The manufacturing industry had traditionally employed 25 percent of our workforce, but had already declined to less than 10 percent by 2017. This was in large part due to automation of the manufacturing process, not simply offshoring.

Infrastructure bill of 2017

But there was one potential solution that had bipartisan support. In 2017, a $1 trillion infrastructure bill was passed, with both Democrats and Republicans agreeing to make it happen. The bill passed in the Summer of 2017. New projects were planned and bid out. Schedules were aggressive, as it was imperative that the bill quickly have an impact.

And it did have an impact. But not the positive one that everyone hoped for. Schedule and budget overruns plagued every major project. Worker injuries were increasing so much so that projects were understaffed, as builders struggled to recruit new employees. Projects didn’t even get off the ground as contractors found themselves unable to scale their processes and workforce.

Rock bottom hit around the mid-term elections of 2018 — when the public was being flooded with campaign commercials showing the failing infrastructure projects wasting billions of tax dollars. Municipalities were left with half-built projects and major construction companies went bankrupt. Budgets were gutted and projects were shelved. The Infrastructure Bill was deemed a complete failure.

At stake in those highly volatile times was nothing less than the well-being of our future generations. Luckily, a small group of contractors, technologists and real estate developers came together to search for a solution.

Construction’s role

The group believed that sustainable job creation and economic stimulus could not occur unless the construction industry took bold steps to reverse its historically poor productivity trends. While the 2017 Infrastructure Bill had good intentions, it was extremely short-sighted, as it ignored core efficiency problems within the construction industry.

How did this group come to realize that construction could be the catalyst the country so desperately needed? They had seen first-hand how technology adoption on construction projects can move the needle in a big way. The members’ experience spanned across the industry, having worked on residential, commercial office, heavy highway and even a futuristic (at the time) new amusement park at Disney World. Collectively, they had already experienced massive efficiency gains through technology adoption in the field. Having seen up to 25 percent overall reductions in project schedules, they knew that a bigger, more coordinated effort could move not just the needle, but move mountains.

The small group, which started at a very grass-roots level, began adding new members and their collective voice started getting heard. Once enough momentum was created the group formalized into the Construction Productivity Coalition — a community of like-mind professionals and business owners that saw incredible potential to drive economic growth through constant, iterative improvement in the application of technology to the business of building. They saw opportunity to improve the entire end-to-end process — designing, planning, building and maintaining — by leveraging technology throughout the lifecycle to create efficiencies not previously possible.

Incorporating tech

This new coalition challenged themselves to imagine a construction project where a worker never waits around for direction, where design clarifications are provided in real time, and where all installation details are always up to date and available instantly. To imagine a construction project where predictive technology helps managers make better decisions about where conflicts or slow-downs may occur —before they occur. What if workers could be deployed in exactly the correct crew size at the moment the work is ready for them to complete? And what if every project was a zero-injury project?

This aggressive shift in thinking drew some criticism at the time, as people were concerned that construction automation via technology adoption would potentially curb job growth by eliminating many industry jobs.

But the coalition relied on first-hand experience as well as research that made it clear that while automation was able to target routine work — the cab drivers of old, as an example — it is much more difficult to replace the activities of non-routine work that have an inherently human component.

What workers do

A construction worker’s day-to-day involved — and still involves — constantly changing conditions and interaction with other workers. Construction foremen, superintendents, and project managers spend most of their day dealing with constant change and iteration — there was and is nothing routine about it.

Was any component of construction subject to automation? Of course. The pre-fabrication movement has proven to be a crucial part of our advancements. 3-D printing of routine parts and materials has also been critical to our success. But they knew that the core fundamentals would not change — construction still happened in the field, and the complex job of installing and coordinating was ripe for efficiency gains, not just automation.

Seamless technology

Even then, researchers knew that social intelligence couldn’t be automated. You couldn’t replace a superintendent with a robot anytime soon. But you could help that superintendent, and the project team that he or she was managing, be a lot more efficient.

In 2017, it almost went without saying that a construction project would suffer from budget overruns due to re-work, delays and lack of coordination amongst all the trades on the project. Estimates of total financial impact due to the lack of productivity ranged anywhere from 5 percent to 25 percent of total construction dollars at the time.

The coalition believed that even a 5 percent increase in efficiency would have a massive impact on the construction process. They looked at the $1.2 trillion spent on construction in 2016 and argued that a 5 percent efficiency gain would have made an extra $60 Billion available for the construction of additional infrastructure, businesses, homes, etc.

Recruiting younger talent

But it didn’t stop there — the coalition was determined to provide a new set of skills to the construction worker of the future. With a focus on education and new skill development, construction workers were trained on both traditional construction practices as well as the latest technologies that could help them be more efficient on the job.

Technology companies were challenged to provide tech tools that were easy to use and easy to deploy. A deep focus on making tech less intimidating and truly focused on solving problems in the field helped to build trust with construction workers. Young people began flocking to the industry, excited about construction’s massive adoption of technology and the opportunity to have a sustainable, long-term career while also having a direct impact on economic growth.

As more talented people joined the industry, and the overall economic impact became apparent, the coalition set their sights higher. This culminated with the 20 Percent Goal — meaning that construction projects would cost 20 percent less in 2040 than they did in 2020.

Hitting this goal was an incredible achievement, particularly considering that we got there in just 20 years. The impact of the construction revolution has been felt in every industry and by all members of society. The impossible was now possible — lower tax rates for individuals, but larger overall tax revenues as innovation drove up profits throughout the economy. Within the last several years it was decided that this increased tax revenue should be focused on the education of our youth to ensure that the middle class never gets left behind again.

Looking back at those troubled times, it is amazing how the actions of a small, dedicated group of people mobilized an entire industry and fundamentally changed our economy.

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