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How do we bring design and construction into the 21st century?

Design and construction have been luddites... but things are changing

Design and construction in the 21st century is characterised by unique components being brought together on-site, resulting in supply chains, materials and processes requiring precise alignment to avoid cost and time overruns, and ultimately, gross inefficiencies.

The result is that while increasing populations and urbanisation are leading to rising demand for construction, pushing up revenues, both profits and affordability are decreasing. Cost and time are therefore becoming even more of an imperative for return on investment (ROI) and overall growth. In 2016, McKinsey & Co. estimated that 80 per cent of construction projects were over budget, and 20 per cent ran over time.

Characterised by low productivity and high costs, the construction industry of today is lagging behind other sectors

Global Productivity Growth Trends*

BOTF design and construction have been luddites graph 1 BOTF design and construction have been luddites graph mobile

Figure 1: Labour productivity growth in the construction industry lags behind other sectors (Source: OECD; WIOD; GGCD-10, World Bank; BEA; BLS; national statistical agencies of Turkey, Malaysia, and Singapore; Rosstat; McKinsey Global Institute analysis) *Based on a sample of 41 countries that generate 96% of global GDP.

Compared to the auto parts manufacturing industry where the average return on equity (ROE) in the US is approximately 12.5 per cent, the engineering and construction industry ROE is 3.4 per cent as at January 2020. 

Productivity in the construction industry is also lagging behind, not just manufacturing, but the total economy, and has stayed relatively static over the past 20 years, as demonstrated in Figure 1.

House Price To Income Ratio*

BOTF design and construction have been luddites graph 2 BOTF design and construction have been luddites graph 2 mobile

Figure 2: House price to income ratio – House prices are rising faster than wages in over half OECD surveyed countries (Source: Organisation for Economic Co-operation and Development)

Affordability and accessibility of residential and commercial buildings is also not improving in most economies. Just like the automobiles of the late 1800s, housing, in particular, is becoming restricted to the wealthy few. 

In the latest research from the International Monetary Fund’s (IMF) Global Housing Watch, house prices have grown faster than incomes in over half the countries surveyed, over the five years from 2015 to 2019, as shown in Figure 2.

Yet, if we need to build 10,000+ buildings a day to cater for a 10 billion world population by 2050, how are we going to achieve that without significant change in the way we design and construct buildings?

The World Economic Forum in collaboration with Boston Consultant Group in their paper Shaping the Future of Construction – Future Scenarios and Implications for the industry, identified global megatrends such as climate change, shifting demographics, the cost of labour in some regions, urbanisation, automation and digitisation as creating a burning platform for change.

The report showcases three extreme versions of the future:

  1. Building in a virtual world – where virtual reality touches all areas of life and intelligent systems and robots run the construction industry
  2. Factories run the world – a corporate-dominated world using modularisation and prefabrication resulting in the convergence of manufacturing and construction
  3. A green robot – a world of scarce resources and climate change, in which we rebuild using eco-friendly construction methods and materials

Alternatively, a hybrid of all three may emerge, enabled by blockchain’s self-executing contracts, or smart contracts, which can create trust and transparency between project partners, making the construction process easier, cheaper, safer and faster.

BOTF design and construction have been luddites crane BOTF design and construction have been luddites quote

Case study Buildings clipped together like lego and delivered to site – ModnPods BOTF design and construction have been luddites lego

Modularisation has been around for some time, but finally gaining momentum due to new technologies and economic drivers. One example of buildings being clipped together like Lego in a factory, from standard components, then delivered to site, is ModnPods, designed and built on Australia’s Gold Coast. ModnPods are constructed using standard components such as shipping containers or a pre-designed steel frame. The build time is just eight weeks and each ModnPod comes complete with fixtures and fittings such as windows and doors, as well as all plumbing, electrical and mechanical components.

Customisation is also available in the form of ‘clip on’ extras such as timber decks. Sustainability aspects such as solar panels, grey water processing, wood panel composites (a blended composite of recycled PE bottles and used industrial pallets or other woods) are also available. Marketed as ‘backyard’ homes or offices, multi-unit developments and caravan parks, the pods range in size from a 3x3.4 metre studio for AUD 29,600 up to a 12x3.4 metre two-bedroom house for AUD 99,000. With a commitment to giving back, ModnPods donates a portion from the sale of each pod to third world countries, to provide more affordable housing and schools.

Prefabrication and the impact on construction

Prefabricated construction and automated technology, such as robotics to install these prefabricated construction materials, and additive printing, are all construction technologies that can be implemented to make not only construction but also building maintenance easier – driving down short- and long-term costs. Starting at the design stage, buildings with standard designs and pre-fabricated components are cheaper and faster to build.

These buildings are highly accurate, with small tolerances. They achieve a high-quality finish throughout any storey level and can be fully planned and documented very quickly. Because they are manufactured, not built, there are reduced weather delays and waste, and carbon generation and site time are reduced. This safer way to build requires only low or semi-skilled labour for fast onsite assembly/installation.

However, this still involves transporting very large components to a construction site, often at high cost.

BOTF robotics

In 2017, Aurecon designed two nearly identical buildings in two different cities in Asia. Building 1 did not utilise any BIM and pre-fabrication in design and delivery, while Building 2 did. The information regarding the impact on construction is provided below:

Building 1
Building 2
% impact
Size 6 storeys
6 storeys
Prefabricated components
Precast construction None Columns, life and stair, structural wall, facade walls, hollow core floor slabs, stair flights, fuel tanks
% of precast construction
0% 70%
Total cast-in-place concrete 34,290m3 6,779m3 -80%
Structure construction 8 months 4.5 months -43%
Total labour days 30,695 days 15,860 days -48%

Case study A tale of two identical buildings Buildings of the future - two identical buildings

Taking this one step further, construction companies like Katerra and Mace are exploiting opportunities to create factory-like conditions on-site to construct a building in an assembly line manner, using a building platform. As buildings can’t physically move along an assembly line, the idea is to take the ‘assembly line’ to the building site. Standardised, pre-fabricated components are assembled on-site to create a building or precinct, in a Lego-like fashion, as shown in Figure 3.

This form of design and construction is already occurring in cities like Dubai, Tokyo and Singapore where fast population growth is forcing new ways of working to achieve economies of scale.

BOTF design and construction have been luddites figure 1

Figure 3: Buildings are manufactured on-site using standardised components

Case study Are 3D printed buildings the way of the future? Dubai and Saudi Arabia think so... BOTF design and construction have been luddites abu dhabi

By 2025, 25 per cent of Dubai’s new buildings will be made using 3D printers. The aim of the 3D-printing strategy is to reduce labour by 70 per cent and cut costs by 90 per cent as well as solve the emerging homelessness crisis.

The city’s fascination with 3D printing in the construction industry was showcased as early as 2016 when the world’s first 3D printed office was created. Only one technician, seven installers and 10 electricians and specialists were required to build the office of the future. Labour costs were reduced by 50 per cent and it took just 17 days to print and two days to install on site. The total cost of the building was USD 140,000. It is now home to the Dubai Future Foundation, which was set up to provide a strategy and showcase for innovative design. 

Saudi Arabia is now owner of the world’s largest construction 3D printer, which can design and construct 12x27x9 metre buildings and three storey structures with 300m2 floor plates. As part of its Vision 2030, the Saudi Housing Program aims to deliver more affordable housing in faster time to the majority of its population.


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