Industries that have a high likelihood of being disrupted also tend to be the most reluctant to accept cutting-edge technologies. While traditional industries like transportation and energy have welcomed new technology, innovation in the construction sector has lagged. Despite the fact that many sizable construction companies run internal R&D departments, more than one-third of workers claim they are hesitant to accept new technologies. Since there are very low margins and everything is project-based, Heinrich Gröller, a partner at Speedinvest, claimed that “this is an industry fundamental problem.”
Finding a project manager who is prepared to take the chance to use cutting-edge technology on their project is challenging. Finding employees is one of the top industry difficulties, according to every investor we spoke with, but the squeeze doesn’t only affect job sites. The Great Resignation and limits on immigration regulations are to blame for the workforce shortage, according to Sungjoon Cho, a partner at D20 Capital. “We just learned about a regional office of a big construction business that lost about 10% of their white collar staff last year alone due to people quitting the construction sector completely!”
Nevertheless, investors are supporting firms that automate the building process and use robots, data management, augmented reality, and automation. A recent research by Deloitte found that the U.S. construction sector saw expenditure hit an all-time high of $1.57 trillion last year. With the business accounting for roughly 6.3 percent of the country’s GDP, there is a sizable market potential. The American government also aims to encourage innovation in this important field. Just $100 million for digital construction technologies is included in the country’s recently passed $1.2 trillion Infrastructure Investment and Jobs Act, but if new technology is applied in public infrastructure projects, it might be beneficial for the sector.
Insight Partners’ managing director, Nikitas Koutoupes, What recent advancement in building technology excites you the most? Which sector do you think investors and entrepreneurs are more interested in, residential or commercial? We are thrilled by how the sector is changing its focus from merely digitizing procedures to revolutionizing the way projects are developed utilizing analytics, automation, and AI. Each significant builder is investigating the potential for these new technologies to increase efficiency on the job site.
Currently, there is a greater interest in commercial enterprises. Because there are so many potential locations for delays and other problems in major commercial projects, new technology suppliers can significantly increase ROI by streamlining procedures. Being more effective may help save a lot of money on these projects’ enormous budgets and scale, and owners and general contractors (GCs) are prepared to spend extra for cutting-edge technology. It appears that GCs and owners are eager to adopt and pay like they haven’t previously, which is what excites us about the time right now.