This $8 Trillion Industry Impacts Your Business Daily, But You Barely Even Notice It
Imagine that it’s Monday morning and you leave home at your normal time.The gym is your first stop, but it’s still closed for renovation despite a sign on the door that says it will reopen today. You head toward work and find your normal route closed in preparation for a building demolition.
Once at work, you wait ten minutes for the one elevator that’s in service.
Finally, you arrive at work. There, at your desk, two newspaper headlines catch your eye: A crane has collapsed in your city, and the cost of building your local baseball team’s new arena has soared. You’re grateful that no one was killed in the crane accident, and you hope the millions of tax dollars the arena costs will result in solid returns for your area.
But while all of this is interesting enough, you probably don’t consider what you've really been reading: how you’ve already been impacted in five different ways by the global construction market, when it’s still only 9 a.m.
The most expensive elephant in the room ever
Here are some striking facts:
Over 50 percent of the global population lives in cities today and by 2050, that percentage will rise to 70 percent.
Nearly $8 trillion dollars is spent on construction around the world today annually, and that figure is projected to increase to $25 trillion by 2025.
- City dwellers regularly spend nearly 90 percent of their time in and around buildings undergoing some type of construction or maintenance.
Every one of these data points has a very real impact on you and me. So, shouldn’t we entrepreneurs expect building owners and managers (whether private or public entities) to be as diligent about managing cost and efficiency as they are about safety?
Let’s break it down
Cities all over the globe are culturally worlds apart, but from a construction perspective they are remarkably consistent: Every building is run by an owner, manager, investor or public agency responsible for daily decision-making. And every building has (or should have) routine maintenance and upgrades, improvements or construction projects to make sure it is safe and suitable for occupants.
However, every building is different, and every project is different. If these complexities are not managed efficiently, the consequences ripple out into the community, impacting the public in a number of ways:
The places where you spend time are inaccessible.
Noise pollution worsens.
Traffic congestion is exacerbated.
Tax dollars are wasted.
People's daily routines are disrupted.
Construction accidents increase.
Overall quality of life is reduced.
These problems are widespread but unavoidable, right? Uh, no.
Many of these problems occur because the real estate and construction industries still rely on pen, paper and fax machines to manage complex processes. Believe it or not, the industry that uses incredibly sophisticated tools to engineer buildings relies on word-of-mouth and text messaging to find and negotiate with those engineers.
Here are the consequences of this decentralized, low-tech approach:
Important conversations turn into a game of telephone. If you have an important piece of news, you’ll have to pass it along on a person-by-person basis. If the news changes along the way, start over and hope you don’t miss anyone. Or, you can copy everyone on an email and hope they all open, read and act on it.
Every time is like the first time. Between archived spreadsheets, the "sent" folder in Outlook and, no joke, a cabinet of manila folders, you will likely find it incredibly difficult to access details from past projects, like the cost of materials or details on how a technical issue was resolved. You'll have to reinvent the wheel again and again.
It’s too easy to hire the wrong person for the job. Already know that a contractor is sketchy from having worked with him on a past project? Without a way for teams to store and easily access that information, that guy will probably get hired again.
Everyone else will follow your lead and take the laziest option. Want a quote from a sub-contractor? Get ready to receive a text message with a photo of a number written on a napkin.
Better late than never
In the mid 1900s, prior to adopting technology, traders on Wall Street kept paper binders of key information. With the advent of enhanced tech tools, these financial pros can now establish prices quickly and enhance daily workflows to drive value.
At long last, the construction industry is now reaching this point in its growth curve. Extraordinary value is being created for the building owners, operators and developers who use technology to better communicate with vendors, manage project time lines and address problems well in advance of a project kickoff.
This shift will help the owner of your gym to reopen on schedule, and maybe even manage the process well enough to not close at all. It will protect the public from shoddy contractors who hide their checkered work history. It will mean that we can all spend more time enjoying a new office or riding safely in a well-maintained elevator -- and less time dealing with unexpected detours.
Building and construction activities impact entrepreneurs -- and everyone else -- in very real ways, so we have a right to expect them to be planned and executed in the safest, most efficient, cost-effective way possible. On the other hand, owners of buildings worldwide deserve the best tools to make their projects great.
Fortunately, technology has finally reached this $8 trillion dollar industry, and cities and businesses alike will be better as a result.