High Stakes for Implementation of ConstructionTech in Aus

ConstructionTech startups will be a key driver for change in Australia’s $134 billion construction industry according to Digital Foundations: How Technology is Transforming Australia’s Construction sector[SB1] , released today by StartupAUS, Australia's peak national advocacy group for startups.

StartupAUS produced the report on digital construction technology (ConstructionTech) in collaboration with Aconex, Lendlease, EY and the Victorian Government. It will be officially launched at ‘Construction Technology Summit 2017’ in Melbourne on 25 October.

The report sheds light on a rapidly growing area of innovation, with over $98 million invested in ConstructionTech startups since the start of 2016 in Australia.

The Australian construction sector is the largest non-services sector in the Australian economy – contributing $134.2 billion to the economy (8.1 per cent of GDP) in 2015-16 and employing 1.1 million people. Successful digital solutions could provide an increase of $25 billion year on year within the decade.

International demand is vast. Global construction output was valued at over US$8 trillion in 2015 and forecast to grow to US$15.5 trillion by 2030, creating many opportunities for Australian startups to export their technology overseas.

StartupAUS CEO Alex McCauley says we are on the threshold of a new age of innovation in the construction sector.

“ConstructionTech is a thriving startup sector that has so far been flying under the radar. Australian startups are providing world-leading innovation in the construction space and between mapping technologies like Building Information Modelling (BIM), Virtual Reality (VR), project management technology, licensing and workplace safety software, and digital hardware like drones, there are a wealth of ways in which technology can have a huge impact on this sector, both here and overseas.

“The collaboration here between large tier one firms and startups is particularly exciting. Startups can’t take on billion-dollar construction projects by themselves – instead, they’re looking at ways to integrate with existing firms to use digital technology to increase safety, quality and efficiency,“ said Mr McCauley.

The industry’s current growth trend is positive – with the Australian Bureau of Statistics’ Construction Work Done, Australia data for the June quarter showing a 9.3 per cent increase in the seasonally adjusted estimate for total construction to $51.7 billion.

The Victorian Government has already used digital technology like advanced building information modelling, 3D drafting and virtual reality components in key construction infrastructure projects such as the Victorian Comprehensive Cancer Centre, Melbourne Park Redevelopment and the Level Crossing Removals project.

The report draws on detailed discussions with 42 individuals from 31 organisations in the construction sector and construction-focused technology space. The interviews included 16 representatives of the startup community and 26 construction stakeholders – including tier 1 and 2 construction company representatives, engineers, investment asset managers and sub-contractors.

Minister for Industry and Employment, Ben Carroll said: "Victoria is the nation's leader in construction technologies thanks to a massive pipeline of infrastructure projects. Through our Future Industries Fund, we are investing in high-growth sectors of our economy to secure Victoria’s future as the innovation capital. We will continue to get behind ConstructionTech startups, and I congratulate StartupAUS, Lendlease , EY and Aconex on this important report"

Steve Thomas, General Manager Applied Insight, Lendlease Building, said: “The smarter use of technology in the design and construction space has the potential to be a major game changer, particularly in terms of project design, procurement, manufacture and delivery.

“As an international property and infrastructure group, Lendlease has a vested interest in supporting the emergence of new technologies that will help us create the best places and continue to push the boundaries of our building and development projects globally. But we also have a responsibility – to challenge and change the industry for the better.

“That can only be achieved through disruptive thinking and increasingly, the availability and adoption of digital solutions. We’re confident this report will drive innovation and help unlock the potential of the industry.”

EY Real Estate & Construction Market Segment leader Selina Short said: “EY were the lead researcher on the report. Property developers and construction companies are entering a new phase for their industry.

“The existence of a healthy start-up community in Australia means local property developers and construction companies can put themselves at the leading edge of the digital evolution of the industry. The opportunity here is considerable. One of our largest industries that has historically been slow to innovate is now on the precipice of major change. The future will be defined by the impact of the successful innovators and implementers.

“Organisations need to ensure their culture evolves as quickly as their technology does. This cannot be about just plugging in a tech solution, it has to be about changing the way the organisations operate,” said Ms Short.

Dean of the UTS School of Design, Architecture and Building, Professor Elizabeth Mossop, said: “StartupAUS’ latest industry report on the status of ConstructionTech is an important and timely showcase of Australian R&D in digital construction technologies. The sector’s ability to respond to changes in our environment and global market depends on Australia’s capacity to grow innovation. The initiative brings together contributions from individuals and organisations who are striving to make a difference to the sector and deliver the benefits of technology-led innovation across the built environment. The report will assist organisations by providing a snapshot of success across the Australian construction tech landscape, and demonstrating how new opportunities are being captured via investment in digital innovation.”

Future Recommendations for ConstructionTech

The StartupAUS report identifies six recommendations for Australian ConstructionTech to reach its full potential, noting the priority of each.

1. Develop a consistent set of standards around technology adoption and use, with support from government. Very high priority – immediate action required.
2. Federal and State governments to lead by proactively incorporating adoption of new technology for large infrastructure projects. High priority – set minimum requirements for government projects within six months.
3. Ecosystem to establish a dedicated coworking space for ConstructionTech startups, alongside a ConstructionTech accelerator program. High priority – investigate implementation within six months.
4. An independent review into the implementation of the universal adoption of BIM in the UK, with a view towards adopting a similar mandate in Australia. High priority –action required within a year.
5. Government and industry to support and expand events focused on identifying technology opportunities. Medium priority – networks to continue to be developed.
6. Provide additional support for collaborative research initiatives focused on ConstructionTech. The CRC for Construction Innovation came to a close in December 2009 and – according to a 2012 Allens study of the program – contributed $7.5 billion to the Australian economy. Medium priority – development over the next year expected.