Every industry I speak to thinks that they are the laggards. They believe that their industry is the least progressive, the one with the most work to do. This is almost never true, except for the construction industry. What would it look like if they were to modernise? Maybe it would look like a Deliveroo for builders.
Slow to modernise
In the face of terrifyingly low margins and high risk projects, the construction industry has largely refused to modernise its business practices, rejecting even government-mandated changes like the adoption of BIM, a system for the computerised transfer of building information. The result of this lack of modernisation is that construction firms are struggling. Many of the largest are losing money. We probably haven’t seen the last one collapse.
So what comes in their place?
Regular readers will know that I believe the shape of tomorrow’s economy is much more of a network than a monolith. Distributed resources assembled and connected to deliver against today’s objectives, then reconfigured to meet tomorrow’s needs. In some ways the construction industry already works like this: each project tends to bring together a different team, and much of the labour and services are contracted. But these relationships tend to be handled in a high-friction, low agility fashion. Information flow is slow, processes are manual, and many mistakes are made.
Imagine a different model. One where the interaction between the major parties was entirely digital, built on a shared set of data and more importantly, processes and principles of operation. Imagine if the contracted labour could be sourced through a similarly digital platform – an Uber for trades, or a Deliveroo for builders. You post your skills and labour requirements and the system matches it to the available labour, dynamically managing pricing to secure the required labour and balance it against budget. Each contractor would have a persistent digital CV, tracking experience, ratings, qualifications and perhaps any safety infringements.
This may not appeal to the contractors today, given the experience of many in the gig economy, of which this would be a clear part. But the power dynamics in this industry are rather different. We have a great shortage of skilled tradespeople. This would be a seller’s market for skills, and such a market would likely take much of the burden from them in terms of promoting themselves and ensuring consistency of work. It would also create a more transparent market for employers, who could equally be rated on their performance, financial stability, and safety record.
Whether or not we move to such a model, the construction industry has to change. It will change, as the current model is clearly unsustainable.