Alex Gruszka
October 30, 2017

Digital builds a new revolution

StartupLand

Digital builds a new revolution

Alex Gruszka: Construction technology should give Australia a reason to be cheerful

Five years ago, the global Chief Innovation Officer at a multi-billion dollar construction firm was making the case to move away from printing out paperwork to take on-site.

It was a hard sell – paper had always worked, technology was unreliable, expensive and difficult to roll out.

Two years ago, that same CIO received an email from a subcontractor, the sort of guy who can lift a fridge without breaking a sweat, asking ‘what kind of tier one firm are you when you don’t have an app for this?’

Stories like this are becoming more common in the construction sector by the day. Over the last six months we took a deep dive into the ways in which the construction sector is being transformed by technology.

The result is a report, supported by some of the biggest players in the space (Aconex, Lendlease, EY, and the Victorian Government), detailing this unique and exciting moment in the history of Australia’s largest non-services sector.

The tipping point of adoption of construction technology has been reached – digitisation is hitting like a tonne of bricks (pardon the pun), and Australian firms are leading the charge.

This isn’t the usual startup story about ‘disruption’. Startups in the construction space aren’t looking to suddenly compete for billion-dollar building projects – high capital costs mean that established industry players remain firmly in position.

Rather, startups are looking to collaborate with existing players to provide digital solutions that improve existing businesses and overcome the most enduring and costly challenges of the sector. And construction firms are keen to be involved.

Startups like SignOnSite let workers sign into a construction site simply by walking in with an app on their smartphone running.

Victorian startup Snobal creates virtual reality spaces from 3D modelling of construction works, allowing stakeholders to see what the finished product would look like from inside before it’s built.

Perth tech firm Fastbrick has developed a brick-laying robot prototype and has signed a deal with Caterpillar in the US to roll out their technology.

DoneSafe overhauls WHS systems so tradies can upload their qualifications and licenses on an iPad. Propeller uses drones to create detailed visual reporting on construction sites.

SafetyCulture, from Townsville, has built the world’s most used checklist inspection app and has facilitated more than 30 million inspections with its product, iAuditor.

These are just a handful of examples of the hundreds of startups who have identified a problem to solve in construction and are looking to technology to provide quality, safety and efficiency.

With $98 million of VC money invested in Australian ConstructionTech startups since the start of 2016, investors are taking notice.

The opportunities here are vast. The Australian construction sector accounts for about $134 billion in annual output, around 8.1 per cent of our GDP.

Yet it has not been able to increase productivity per worker in real dollars since 1993, and the ABS ranks its rate of innovation very poorly, ahead of only transportation and agriculture.

Globally, construction contributes US$8 trillion to GDP and yet similarly lags behind peer industries in terms of innovation.

There is huge potential here for increased value – BCG estimates that within the decade some US$1.5 trillion could be added to global GDP year-on-year with successful implementation of current digital construction technology alone.

Australian entrepreneurs, therefore not only have a flourishing local industry to target, but global expansion possibilities are enormous.

There are still some levers we can pull to create a better environment for ConstructionTech.

For example, some years ago the UK mandated the use of Building Information Modelling (BIM) on projects of a certain size, making a clear statement about the implementation of digital technology in the construction phase. We can look to implement and expand on that successful policy here.

We also need to standardise our IT systems – tech solutions need to be cross-platform and work with any firm.

A dedicated ConstructionTech co-working space and accompanying accelerator would do wonders not just in supporting startups, but in providing a physical ‘home’ for this technology.

Given the desire for collaboration and integration, startups and established firms need a space to meet and co-develop solutions.

This is a critical time for construction and indeed the broader Australian economy. There is now a critical mass of innovators, investors and implementers ready to significantly overhaul outdated legacy systems and processes and usher in a new era of quality, safety and value.

With these recommendations, and more outlined in Digital Foundations, Australia can hold a global leadership position in an international market with trillion-dollar potential.

Alex Gruszka is COO of StartupAUS and lead author of the Digital Foundations report.

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