Construction, which encompasses real estate, infrastructure, and industrial structures, is the largest industry in the global economy, accounting for 13 percent of the world’s GDP. This industry is undergoing profound disruptions to the ways that projects are delivered. Recent McKinsey research highlights how the attitudes of construction CxOs have shifted from disbelief and resistance, to opportunity and action over the past five years. Not surprisingly, the COVID-19 crisis is accelerating the resulting anticipated changes.
On the 16th October 2020, McKinsey’s Global Infrastructure Initiative hosted a peer-to-peer roundtable for senior executives from the French construction ecosystem. Using the current French macroeconomic situation, the discussion focused on the future of construction and the project of the future. Participants debated market dynamics in the construction ecosystem across 3 major shifts—digitization, sustainability, and modularization.
The key themes that surfaced during the discussion are summarized below.
- Update contractual frameworks to support end-to-end digital integration. Contractual frameworks have traditionally regulated stakeholder relations in ways that impeded digital adoption. Contracts need to evolve to capture the opportunity of market-ready digital solutions and enable a step-change in performance and productivity.
- Upskill capabilities on sites and among project users. Despite a clear appetite to continue increasing digitization and big data usage, key players face adoption roadblocks. Even established tools, like BIM, remain a challenge on site for many project stakeholders. Workforces need to be trained to capture the maximum value from available tools.
- Use national relaunch plans to accelerate sustainability in projects. Generating an economic recovery while making progress on national sustainability targets will require stimulus investments that optimize the usage of sustainable materials (i.e. low-carbon, recycled and/or reused).
- Enroll the full value chain when shifting to modularization. Modularization’s success requires orchestration among owners, developers, designers, suppliers, contractors and regulatory agencies. While the potential value of modularization is high on major projects, the complexity of the stakeholder ecosystem will require dedicated buy-in across the value chain to realize the gains.
- Adopt to an ‘industrialization’ mindset. To increase offsite production and onsite assembly, stakeholders must significantly invest in their direct and indirect workforce, enhancing industrialization resources, capabilities, and mindsets.