From Blueprint To Open For Business. Aon The One Brief.
Our buildings, roads and public transport systems are quickly becoming more than bricks and mortar, steel, glass and concrete. Internet connectivity, coupled with the ever-advancing ability to gather and analyse data, is finding its way into the construction industry. As a result, we’ll live and work in structures that are “aware,” and cities that are “smart.”
Dubbed “constructech,” dramatic advances in technology are quickly emerging in the construction industry, turning physical structures into data-collection devices. Once the structure is built, the technology used in the operations phase – “proptech” – is poised to revolutionise the way infrastructure and other physical assets are managed and operated.
Smart assets such as internet-connected heating and air-conditioning systems are designed to run at peak efficiency based on the time of day or whether spaces are in use. Smart elevators, ventilation systems or other pieces of building equipment can sound an alert whenever they are due for maintenance – thereby saving on repair and replacement costs. And sensing systems can detect safety issues on the construction site, preventing worker injuries as buildings are erected. This digitisation of physical assets is part of what’s been called the “Fourth Industrial Revolution.” At the heart of this revolution are innovations in such areas as robotics, artificial intelligence and the Internet of Things (IoT).
“Smart” buildings and infrastructure will evolve into “smart cities,” which will reduce construction and operating costs, and even, possibly, help to reduce climate change. This new technology can be used in any number of ways: smart buildings could provide more energy-efficient housing and offices, smart traffic lights could reduce traffic snarls by adjusting to traffic flows and congestion and sensors in bridges, roads and other public infrastructure could alert officials that maintenance is needed before any deterioration becomes apparent. And outside of everyday structures such as buildings and roads, technological advancements with energy refineries and power plants could change the oil and gas industry as a whole.
Geoff Heekin, president of Aon’s Global Construction and Infrastructure Group, notes the rise of “infratech” – the use of technology across more phases of an asset’s life – both its construction phase as well as its operational phase. “Growing populations and increasing urbanisation are raising the pressure to employ technology to better deliver infrastructure,” he states. The opportunity he points to is a blend of efficiencies and overall return on investment benefiting asset owners and the public alike.
In-depth
The rise of “infratech” isn’t the stuff of the future. “It’s already happening and it will accelerate in the next 10 years,” said David Bowcott, global director of Growth, Innovation and Insight for Aon’s Global Construction and Infrastructure Group. Ultimately this application of technology to our buildings and infrastructure will create a seamless connection between the structures and the people occupying and managing them, he said.
Using this new technology, sensors will connect buildings, roads, water systems, bridges and other infrastructure, providing data that allows them to be maintained more effectively, rein in energy usage and costs, and introduce new efficiency and safety to their operation. Recognising the trend, some major tech companies are already making significant investments in smart building technology.
“What’s happening is that these physical structures, even in their very beginnings in the construction phase, are becoming more aware,” Bowcott said.
For the construction industry, the new technology can lead to increased productivity, improved workplace safety and better project quality control.
Digitising The Construction Industry
The construction industry lags far behind most other industries in digitisation, ranking just above agriculture and hunting according to a McKinsey Global Institute analysis. But the industry is making rapid advances to employ technological solutions to improve efficiency and reduce costs.
Challenges in the construction and infrastructure industry have inspired the creation of a raft of start-up companies offering solutions aimed at helping companies modernise operations, improve productivity and reduce risk. Back in 2008, venture capital firms invested just $4.5 million in two construction tech deals. In 2017, they invested $538 million in 40 deals.
Increasing Asset Efficiencies and Return on Investment
The cost of operating a building is often 80 per cent to 90 per cent of the total cost of owning the asset, Bowcott said. If smart building technology can reduce those operating costs by 10 per cent, the impact on the owner’s bottom line can be significant.
“Paying a bit more in construction to include these technologies ultimately is a question of long-term rather than short-term thinking,” Bowcott said.
Building developers’ and owners’ interest in these types of smart assets is also driven by the demands of their technology-reliant tenants and clients who expect connected buildings and smart, energy-efficient systems.
Bringing The Physical World Online
This new technology is not without risks of its own. Connected structures and building systems are potentially vulnerable to cyberattacks, with a reliance on IoT increasing the exposure. Proper cyber risk management will be essential. There are also risks associated with failing to maintain the smart systems properly, so maintenance protocols must be in place.
Nonetheless, the application of technological innovation to construction and building management is inevitable, driven by the promise of lower costs, increased efficiency and productivity, safety improvements, environmental benefits and improved quality of life for those using the various facilities.
Design firms, construction contractors and building owners all recognise the potential benefits of infratech, and are moving quickly to increase its adoption. At the same time, technology firms – both established and start-ups – have spotted the demand for technology solutions in the physical space and are delivering them at a healthy pace. For those who live and work in the buildings, drive on the roads or rely on other infrastructure, the result can be higher-quality facilities at lower cost, improved quality of life and reduced energy use.
The infratech age has arrived and with it the increasing digitisation of physical assets.
