The Future of Utility Construction

July 26, 2017 Arnold Fry

Utility construction faces an unprecedented level of disruption today. Disruptions are coming from all sides, including global workforce challenges, issues arising from distributed generation, new safety improvements, increasingly adverse weather conditions and cyberattacks on infrastructure.

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How did we get here and what can we do about it?

First, it’s important to understand how large the construction industry’s impact is on the global economy -- it represents 6% of global GDP and there are up to 180 million construction workers worldwide, 75% of whom are in developing countries.

Construction is the progenitor of other industries, so issues faced during construction can also impact the economic ventures housed by the finished buildings and infrastructure it produces. In the UK alone, every British pound invested in construction delivers £2.84 of economic activity. By 2030, worldwide construction output is forecast to reach $17.5 trillion, some 85% greater than 2014 levels.

UMass Boston J Cannistraro construction utility.jpg

Compounding the problem in utility construction, however, is that productivity in the construction industry has stagnated the last 20 years. In 2015, only 25% of construction projects in the last three years came within 10% of their original deadlines. What’s more, average global construction project margins fell to 6.1% in 2016.

 

Risk in Utility Construction

Surprised? We’re not. There’s chaos in the traditional approaches to construction -- paper plans are often out of date by the time they get to the field, decisions are often based on gut feelings or best guesses instead of data -- which carries part of the blame.

Against a backdrop of rising project complexity, levels of risk, uncertainty over the flow of money into projects, skills shortages, the growing globalization of construction, and other factors, securing a profitable place in tomorrow’s market is increasingly going to be linked to a contractor’s ability to innovate.

workers utility construction.jpeg

Today, the construction market is still frequently burdened by an emphasis on risk and money. This has habitually suppressed productivity levels, kept margins low, introduced cost and waste, and reduced the industry’s ability to add value to the built environment.

The root causes are many, varied, and well-documented: Opposing business goals of project participants, the manner in which projects are procured, fragmentation of the supply chain, lightly capitalized balance sheets, the uniqueness of each project, and the variable cost nature of contracting, to name a few.

 

Construction Technology Presents Both Challenges and Opportunities

The breadth of change that we’re currently experiencing is broadening, and the pace is accelerating -- bringing both the challenges mentioned above, but also opportunities and solutions. Here are some of the technologies that are driving these changes, and that will continue to make seismic shifts in the industry:

Individually, each of these has the potential to change one or more aspects of the industry. Collectively, the interaction between these trends is giving rise to something bigger. They’re fundamentally disrupting the very way in which we design, build, and operate buildings and infrastructure assets. And those disruptions are about to transform the way utilities are built and operated.

Achieving success in tomorrow’s market isn’t going to be a simple case of scaling up today’s practices. If technology is to help the industry, then it needs to do more than just tweak a process or incrementally increase productivity, it must have grander aspirations.

Future power plan utility construction.jpeg

For more on how the construction industry can face its challenges and help turn them into business opportunities, Autodesk industry thought leader, Dominic Thasarathar, recently published a report, Construction with the Power of Digital, on how we can deliver better outcomes for our built environment.

 


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