DiPP - Construction 4.0: A Once in a Generation Opportunity

The 3 million enterprises, mostly SMEs, that make up the construction sector in Europe account for 9% of EU’s GDP and employ 18 million people. Yet this major driver for economic growth and jobs is far from being fully digitised: less than 6% of construction companies make full use of digital planning tools today, thus robbing the EU of 13%-21% savings in design, engineering and construction.

Although we spend 90% of our time in buildings, the construction industry receives almost no attention when it comes to opportunities for digital enhancement. It is time to speak about the tight, productive relationship that has developed between the construction sector and ICT. Together those two industries are critical actors in helping tackle challenges like energy efficiency, job creation or even an ageing society. Under closer scrutiny, there seems to be no limit to what digital technology can do for this sector: from VR headsets that allow operators to manage several cranes at once, to videos that feed databases used in training.

BIM, the unsung hero

Policy makers are as keen as DIGITALEUROPE to take a wider view of the ongoing digital transformation. Digital applications like Building Information Modelling (BIM) have a proven track record of saving time and resources throughout the value chain. Owing to the resounding success of BIM, some suggest that the acronym should command a wider reading: Better Information Management. BIM’s ultra-fast uptake across the construction trade – as illustrated by the success of the BIM Manifesto or the BIM Box – owes a lot to the active, continuing support of the Commission. This example also provides conspicuous evidence that the construction sector is quickly catching up with the digital transformation.

Government leadership

While prevalent today, the BIM approach is only a piece of a much larger puzzle. Indeed Construction 4.0 includes all kinds of productivity-enhancing tools. Today, eleven governments across the EU are contributing to design and implement the Construction 4.0 strategy. This is most welcome as there is no denying of the preeminent role of the public sector, not only through public procurement – it is the sector’s single most important customer – but more generally as a partner expected to lead by example. After all, it is legislation which makes our buildings properly designed and maintained, hence safe. Governments around Europe and the world ought to require that digital technology and workflow be used on public works projects to stimulate the digital transformation of the construction sector.

This is not to say that the future of ICT-enabled construction industry should be construed on a regional basis: this sector is undeniably global. There is a massive potential to turn existing slow and expensive processes in the real estate lifecycle into data-driven services, especially from the owners’, financiers’ and end-users’ perspective. The success of Construction 4.0 plans lies in creating a) interoperability, b) automated trust and c) a cross-industry marketplace for digital services through data-driven platforms.

Besides, all products, equipment and services that make the achievements of the construction industry possible are also produced and managed on a global scale. The role of every item in the value chain should be optimized: ICT provides potent leverage to contain between 2 to 3 trillion dollars yearly in cost overruns, assuming that M2M data flows are unfettered. In this regard, the governments play a crucial role. Unfortunately, a quick look at the e-Privacy Directive reveals that it may throw a huge spanner in the wheel of such optimization whose benefits are not limited to productivity but also include safety and sustainability.

Other drivers of trust: standards, certification, skills

Finally, the ICT-driven industrial revolution is anything but linear: flexibility is needed at all times to address never-ending challenges. But this will not happen without flawless interoperability: standards should be designed as facilitators, not as barriers. Associations can help promote trust-enabling certification that serves environmental purposes too.

Sadly, construction companies are not immune to the e-skills deficit which runs rampant across Europe. Supporting state of the art university teaching by ICT professionals has proved very effective at bridging this gap, and so has the well-trodden path of apprenticeship.

Moving forward, the ICT and construction sectors look set to unleash huge potential savings, growth and jobs across the EU. It only takes careful, well-informed lawmakers and regulators to make the most of this bounty.

More information and video on construction 4.0.