Digital Transformation and the Next Generation

Right now, the industry has two important conversations going on.

The first is about the adoption of digital technology. Over the past two decades, global labor productivity growth in construction has averaged just one percent a year. Compared to an overall growth of 2.8%—and a growth of 3.6% for manufacturing—construction is in the stone age.[1]

Contracting has complex regulations, antiquated procurement processes, and owner/builder/contractor relationships that can be, frankly, adversarial instead of collaborative—but the main reason for that lag in productivity is that other industries have integrated sophisticated software and automation into their workflows.

Contractors have been slow to go digital for several reasons. The most obvious is the nature of the work. It’s physically dealing with physical things. Moving lumber, installing pipe, pouring concrete. Sitting at a desk looking at a screen won’t get that water heater off the truck.

Then there’s the work environment. A job site can be a hostile place for even rugged tools. Now imagine investing in, say, a dozen laptops for a crew knowing that, statistically, two will walk off the site and five of the remaining will be broken by the time the job is done.

Also, generally speaking, contractors are not “early adopters.” They like what they are used to—those things that have proven their worth. To gamble on a new piece of equipment or a new process—and digital transformation involves both—is a risk.

But the trades are starting to catch up. The near-universal use of smartphones is part of it. More digital technology has started to trickle into construction from architecture and engineering. And the pandemic has accelerated everything, remote inspections and remote commissioning in particular.

But perhaps the biggest driver has been the difficulty so many firms have in finding and retaining skilled workers. Going digital is seen by many contractors as a way to get more work out of the fewer workers available.

Which brings us to the second conversation: no one wants to work anymore.

If you read Al Schwartz’ column this month, he calls the current generation a bunch of “layabouts” who don’t want to show up on time, don’t want to put in the effort, and will quit at the drop of a hat.

I’ve heard that same story from too many contractors to dismiss it, but I wonder if it’s young people who have an attitude problem or the trades that have an image problem? Young people with strong work ethic get steered towards college, leaving the trades with those who, perhaps, lack the same motivation. (Read about the efforts the United Service Workers Union is making to change the image of the trades.) 

And because of technology, young people today have more career options than ever. Thanks to the Internet there’s a wealth of information available on anything a young self-starter might want to make a job out of. Teach yourself to make video games. To upholster boats. To brew beer. Technology has also ushered in a wave of new jobs that were unthinkable a decade ago. Podcaster? You-Tuber? Social media influencer?!? What’s next?

Likewise, technology might just be what draws young people back to the trades. As more contractors adopt digital tech, it might change the image of what the trades look like. And technology might just make some think twice about the value of that college degree. Artificial Intelligence isn’t just coming for the semi-skilled worker anymore. There’s an AI, ChatGPT, that recently passed the bar exam. In fact, it looks like it could do a fair job writing an editorial like this one!

Makes a job where you need to physically install things suddenly look a lot more secure…

[1] www.mckinsey.com/capabilities/operations/our-insights/improving-construction-productivity