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How Governments Can Lead Industry Toward Digital Tech

April 22, 2019
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Research by McKinsey & Co. suggests that governments can help clear a path to bringing new technologies into the construction industry, creating greater value from public and private spending on large capital projects.

In the U.S. alone, expenditures on construction reached $1.29 trillion in 2018 after rising an average of 7.4 percent annually over the previous five years, the article says. Alongside this growing need, public and private projects have struggled to keep costs and construction times within original projections. According to the article, some companies have already begun testing new technologies to improve project outcomes.

For example, some companies are using wearable GPS devices or smartphone apps to optimize workflows and resources. Others have begun using virtual-reality systems for supervisors and crew to “walk through” processes to prepare sequencing, and conduct safety trainings more efficiently.

The article’s research suggests five measures available to governments that can be powerful tools in accelerating adoption.

Set bold aspirations: Governments could craft a digital construction strategy that encourages the use of new tools to reduce time and cost.

Create meaningful incentives: Public grants could be offered to help companies adopt technologies that aid in production design and execution. National competitions and prizes that reward technology adoption in construction can also provide incentive, while publicly recognizing technology’s importance.

Manage risk: Governments can also reduce the risks that are unique to emerging technologies. Re-thinking acquisition regulations to make allowances for emerging technologies could also help with adoption.

Ensure transparency: Transparency around the costs and progress of public projects creates pressure to complete projects on budget and on time, which becomes easier when new technologies are being deployed.

Build capabilities: Governments can invest in training programs that build capabilities and provide opportunities to workers displaced by technologies.

Source: McKinsey & Co.

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