World Econ Forum urges AEC innovation

Burj Khalifa in Dubai is now the world’s tallest tower, but its multiple records “would have remained pipe dreams had it not been for a series of innovations in building materials, technology, and techniques,” according to the 2017 WEF report.

Sometimes, it’s not the message, but the messenger, that carries more weight when new research enters the arena of policy debate and fiscal priorities.

Such is the case this month with the release of two new reports by the World Economic Forum (WEF) that fully endorse the ongoing transformation of global design and construction, and underscore the necessity of utilizing existing and emerging technologies to speed change. Granted, those are not earth-shattering insights for many inside our industry. But when a venerable group as internationally influential and well-heeled as WEF gets on board the innovation train, there really is no going back. Critical mass has been achieved.

“Incremental change is not an option,” says Michael Buehler, WEF’s head of infrastructure and urban development. “By redefining the ultimate frontier, leapfrogging innovations in construction will finally help to address major societal challenges, from mass urbanization to climate change. Their widespread adoption… is going to make a serious impact, socially, economically, and environmentally.”

“The future of construction is here now; it is just not evenly distributed… We see a widening gap between
the innovation laggards and leaders”

— Philipp Gerbert, boston consulting group

Working in collaboration with the Boston Consulting Group (BCG), WEF also has launched an online “knowledge-sharing platform,” Future of Construction, to make its research available to industry, owners and government agencies, and accessible for updates, ongoing analyses, and expert assistance for public and private visitors seeking process and/or policy solutions. “There has always been a mismatch between the need for infrastructure assets and the capital to fund them,” notes John Beck, CEO of Calgary-based Aecon Construction Group, one of Canada’s largest and oldest heavy contractors. “By leveraging all the remarkable innovations that have emerged in recent years, we have a new opportunity to narrow that gap,” he contends. Of note, Aecon participated in the research.

AECOM is just one of several global industry players supporting the WEF initiative. Active supporters include Fluor, Skanska, Arup, Arcadis, JLL, PCL Constructors, the U.S. Army Corps of Engineers, the University of Waterloo, and numerous other research universities, private institutions and public agencies across Europe, Asia, and the Middle East.

  • Below, the 10 Lighthouse case studies highlighted in the ‘Inspiring Innovators’ report.

Released March 1 and March 7, respectively, the two new Shaping the Future of Construction reports are entitled Inspiring Innovators Redefine the Industry and Insights to Redesign the Industry. They follow on the initial report in the series, A Breakthrough in Mindset and Technology, which was published last May. At that time, WEF kicked off its three-year Future of Construction Initiative with these words:

The world is changing faster than ever before. Consider just one of the global mega-trends shaking up the construction industry: the population of the world’s urban areas is increasing by 200,000 people per day, all of whom need affordable housing as well as social, transportation, and utility infrastructure. In the face of such challenges, the industry is almost under a moral obligation to transform.

Amsterdam’s ‘The Edge’ opened in late 2014 as the world’s most sustainable building. Now home to 1,700 employees of Deloitte Netherlands, the structure boasts of 21 innovations that enhance tenant safety, comfort and energy efficiency. More than 30,000 sensors feed a ‘big data’ network that monitors temperature, lighting and even detects for movement.

That moral obligation is what is driving the overall initiative, and those behind it are determined to push principles of sustainability and resilience, as well as the wide application of emerging technologies, all of which are now seen as essential pillars of productivity and efficiency. From the March 7 report:

Considering the recent push to build and upgrade infrastructure in an affordable way in North America and many other regions around the world, the construction industry has to step up by improving its productivity, environmental performance and social impact… New technologies —– such as building information modeling (BIM), 3D printing, wireless sensing and autonomous equipment — offer the potential to transform the construction industry. However, adoption remains low as companies are uncertain about the value proposition of these new technologies and how to implement them in their organizations’ strategy.

The 10 lighthouse innovation cases in the report illustrate the value of embracing innovations and applying them in the field. Prominent flagship projects, such as Dubai’s Burj Khalifa, the world’s tallest building, and The Edge in Amsterdam, the world’s most sustainable office building, showcase state-of-the-art innovation. So, too, do the various pilot projects or startups that the report analyzes, such as the 3D printing of houses by the Chinese company Winsun (see below) or the vast predictive analytics of construction data collected by the Chicago-based, Caterpillar-backed startup UPTAKE.


“To paraphrase (sci-fi writer) William Gibson: the future of construction is here now—it is just not evenly distributed. Innovative companies and projects, as described in the report, demonstrate the art of the possible and how to address the challenges involved,” says Philipp Gerbert, a BCG senior partner and coauthor of the report. “The impact of these innovations on the traditional construction ecosystem will be interesting to follow. We see a widening gap between the innovation laggards and leaders, in particular with regards to their digital transformation.”

According to the report, pioneering firms create an innovation-friendly culture that rewards risk taking; they take a longer-term product perspective, rather than thinking in terms of individual projects; and they proactively shape the regulatory environment. Firms have nothing to gain from delaying, it contends. Once they implement innovations, the benefits — lower costs, shorter delivery times, and reduced environmental impact — can begin to accumulate. Acknowledging the crucial role of government, the report also recommends that municipalities must update building codes, move to performance-based and forward-looking standards, and introduce more flexible procurement models in infrastructure projects to overcome typical hurdles for innovation.

Future of Construction – Solutions

Online, the new centralized platform for sharing best practices now offers insights from six working groups who met several times throughout 2016 to develop and analyze innovative ideas, their impact, the barriers to implementing solutions, and the way forward to overcoming obstacles and implementing modern approaches in the industry. Comprised of industry leaders, practitioners, academics, and public and private experts, each group has posted initial recommendations for innovative solutions that address the key challenges specific to their given area of concentration. They are:

1. Project Delivery – Creating certainty of timely delivery for budgeting, and improving productivity;

2. Lifecycle Performance – Reducing the lifecycle costs of assets, and designing for re-use;

3. Sustainability – Achieving carbon-neutral assets and reducing waste in the course of construction;

4. Affordability – Creating high-quality, affordable infrastructure and housing;

5. Disaster Resilience – Making the built environment resilient to climate change and natural disasters;

6. Flexibility, Liveability and Well-being – Creating a built environment that benefits its end-users.

  • Below, Six Challenges, as detailed in the new ‘Insights’ white paper. To access details, click here.

Looking ahead, WEF and BCG now say they will wrap up their ambitious initiative next year, but not before much more data is gathered, feedback is incorporated, and more best practices are shared.

“During the next year of the Future of Construction initiative, the aim is, therefore, to tie all elements together – innovation and new technologies, sustainability and circular economy, talent and skills, and investment in and financing of built assets – and to explore how business and governments can advance from to better serve their clients and society,” writes BCG’s Gerbert. “A successful implementation of the success factors and policy recommendations will help to accelerate innovation in the construction industry and thereby achieve higher productivity, greater sustainability and enhanced affordability.”

A challenging agenda to be sure, but now one seemingly recognized as a global imperative, as well.