Leveraging Data to Solve Construction’s Population Problem 

By Brad Barth

Late last year, the world reached a significant milestone. According to the UN, our planet’s population now stands at 8 billion people. 

Understandably, hitting this milestone has not caused any immediate or direct changes to how the world lives and works, but it is a good opportunity to think about what the future looks like. While there is general consensus that population growth will continue in the near term (reaching 9.7 billion by 2050), forecasts vary for the long term, with some prognosticators expecting a population decline beginning around the year 2100. 

In the meantime, we can expect to see two population trends continue that directly impact the construction industry. First, the population will continue to trend older, with less workforce participation, meaning a (proportionately) smaller pool of potential employees to draw from. Second, many of the regions experiencing the fastest growth are areas of the world that require significant investment in infrastructure, such as Africa, the middle east, India, and the Philippines.   

Under pressure to perform 

These population trends pose a sizable challenge to those charged with building the world’s infrastructure. This future burden is only exacerbated by the immense pressure the construction industry is already under to repair and upgrade existing, ageing infrastructure, while also transforming it to achieve ambitious sustainability goals.

Funding is rarely the issue; the industry’s capacity to deliver is the bigger question. In the United States, for example, the Infrastructure Investment and Jobs Act – signed a little over a year ago – has already committed $185 billion in funding to deliver nearly 7,000 infrastructure projects. With similar public and private funding commitments in other countries, altogether the world has a project pipeline that the industry simply does not have the bandwidth to deliver. Add in ongoing labor challenges, supply chain disruption, and rampant inflation in many parts of the world, and you get a picture of a construction industry that is just able to stay above water to meet existing demand. 

Now add increased demand for construction from the population, demographic, and geographic trends, and the picture of how the industry will keep up becomes even fuzzier. Despite worthy and valiant efforts to expand employment participation in the construction industry, we cannot expect a sudden influx of experienced planners and skilled workers to “save the day” (the most realistic solution is to work more quickly with more efficient use of available capital). Plainly, the faster we can plan, approve, execute and hand over a project, the faster we can move onto the next one. If we think of the capital project delivery pipeline like an actual, physical pipeline, its size is largely what it is. The best way to increase capacity through that pipeline is to reduce the friction. Better planning and risk identification can lead to fewer delays and over-runs, and less capital held in reserve for contingencies. That in turn can lead to more projects moving through the pipeline more quickly, which benefits everyone.

Even incremental improvements over the coming years could have a significant impact given the industry’s current performance. In 2022, capital projects went over budget by an average of 17 percent, and only 35 percent of contractors reported completing their projects on or ahead of schedule according to respondents to the Global Capital Project Outlook (GCPO) report. The big question is, how do we ramp up the industry’s output while preserving the focus on safety, without diminishing quality or driving up costs? The answer is to leverage data. 

Exploiting data to build efficiently 

Opportunities to leverage data are vast, but one of the lowest hanging fruits is using data to generate appropriate risk-adjusted plans. Indeed, the impact that unmanaged or unexpected risk has on delivering projects on time and on budget is top of most owners’ (56 percent) and contractors’ (55 percent) minds, according to the GCPO report. Exploiting data to better manage risk will be especially important for meeting the infrastructure challenge created by the aforementioned population trends. As an industry, we collect a vast amount of data during the capital construction process, but a great deal of that data remains underutilized beyond the current project. To deliver projects more quickly and efficiently, historical project data can be leveraged to better identify, manage and mitigate risk, and uncover the most efficient way to deliver a project with the least friction. 

Doing that starts with standardization across processes and systems, an issue that currently hampers projects from completing on time and on budget, according to more than half (54 percent) of contractors. While no two projects are ever exactly alike, breaking them down to an “atomic level” during planning and execution can result in a valuable knowledge library of benchmarks to predict performance and risks for a specific operation, such as forming a slab for a concrete pour, welding a specific type of pipe, or putting up drywall. Each time a task is performed, it should generate a digital representation that can be scrutinized to understand the assumptions and actions taken to complete that task, and how they impacted the project’s scope, cost, and schedule. When used properly, historic data can be turned into powerful insights to improve the speed and efficiency of future projects.  

With the right software, an ever-growing historical knowledge library can become one of a construction organization’s most valuable assets, providing a greater level of confidence as a project moves through the conception and funding stage, through design and engineering, and all the way through construction execution and start-up.  By augmenting human intelligence, risks that might otherwise have derailed a project from being completed on time and on budget can be managed early, and opportunities for greater productivity highlighted. 

Data and the talent shortage

Exploiting historical data and benchmarks can also help overcome issues created by the industry’s talent shortage. Although technology will never be a direct replacement for human intelligence, automating some of the project checks and balances that would have previously been done manually will give the industry greater workforce flexibility. Companies will be able to put less experienced workers in more productive roles more quickly, confident in the knowledge that plans, estimates and schedules can be validated against historic data. Meanwhile, more experienced workers can focus on the company’s most complex issues to ensure project delivery continues to move forward efficiently. 

More broadly, progressive use of technology is an important facet in reinvigorating the industry’s image to attract ambitious, tech-savvy workers that will be needed to meet the world’s infrastructure challenge. A lot of the key skills required in the construction industry – planning, modelling, problem solving, risk mitigation, management, communication – are no different from those required by other industries that are often perceived as more alluring, such as aerospace or manufacturing. The construction industry represents a unique intersection of innovations such as artificial intelligence, virtual reality and simulations with enduring, amazing, and often beautiful structures that stand the test of time.  

With another 1.7 billion people to support the world’s infrastructure by 2050, and billions more that will benefit from infrastructure upgrades, the industry is feeling the pressure of construction demand expanding faster than delivery capacity. Connecting the past with the present through data, using standardized processes and systems, is a key part of the digital transformation currently occurring in the construction industry, and it’s the best bet for the industry to meet that demand.

Brad Barth is chief product officer at InEight.