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Global construction industry trends: AI, sustainability and inclusion

Global construction industry trends: AI, sustainability and inclusion

Dr Gretchen Gagel shares insights from her collaborative study on global construction industry trends, exploring the current landscape of artificial intelligence, sustainability and inclusion.

By Dr Gretchen Gagel.

By Dr Gretchen Gagel. (Image: Heidi Victoria)
By Dr Gretchen Gagel. (Image: Heidi Victoria)

In February 2024, I once again had the opportunity to share the results of a global study conducted with the US-based Construction User Roundtable (CURT) on key challenges and associated solutions in the construction industry. I initiated this study back in the 90s because I wanted to understand what was keeping industry leaders awake at night and what they saw as critical opportunities to improve our industry.

This year, I chose to focus on three key topics – artificial intelligence (AI), sustainability and inclusion – and spoke with dozens of executive leaders within large contractors, engineering firms, and global clients such as Microsoft, Johnson & Johnson, and the US General Services Administration (GSA). I began my presentation of the study in Tucson with a picture of the infamous scene from Indiana Jones where he is running from a large boulder. These three topics – AI, sustainability and inclusion – are coming. We can’t outrun them and the organisations that adopt and adapt the fastest will outpace their competitors. Here are the study highlights on each topic.

Artificial intelligence

When asked, “How well is our industry leveraging AI?”, those interviewed for the study rated our efforts as 1.6 on a scale of one (low) to four (high). Clearly, there is room for improvement. Here are some of their comments:

  • “I’m seeing some cool things presented at conferences, but I’m not sure these ideas are being adopted.”
  • “There are pockets doing well, but it’s just the tip of the iceberg.”
  • “There are very few examples. This is not something our industry is rapidly adopting.”
  • “There is a lot of reluctance. Everyone wants to see someone else do it first.”
  • “Clients aren’t willing to pay for it on their projects.”

The theme of the last comment persisted throughout the study: if the client isn’t willing to pay for it, we aren’t motivated to bring ideas to the table.

Participants mentioned several potential AI applications, ranging from analysing jobsite photos for safety hazards and risks to optimising project schedules, selecting the right contract model and conducting intricate financial analysis.

A conference panel on AI by TDIndustries and its technology partner FactorLab stood out as a shining example of utilising AI to drive safety results.

Over a four-year period, TDIndustries collected 500,000 self-recorded videos of foremen and superintendents giving pre-job planning talks. The company used AI to analyse and rate 90,000 of these videos, identifying specific words and phrases that increased crew engagement and evaluating which foremen and superintendents needed more training. Over this four-year effort, TDIndustries achieved a significant reduction in their Total Recordable Incident Rate (TRIR) by leveraging AI to improve pre-job planning meetings and safety discussions. This is a great example of leveraging the power of AI.

Sustainability

Those interviewed rated our focus on sustainability at 2.3 on the same one to four scale, with many comments focused upon the fact that environmental, social and governance (ESG) standards, investors and the worldwide regulatory climate are driving a greater focus on sustainability.

  • “Awareness is kicking in; pressure from ESG and publicly traded companies; it’s at the low end but will pick up significantly.”
  • “ESG pulls it together, stating how you are really measuring it in an objective way so that you can continue to improve; we will stay on the path because it is the right thing to do.”

Participants did, however, reflect the flip side of this message in that maybe we are saying all the right things but not achieving the desired results.

  • “Most owners have huge sustainability commitments but it’s not coming through to the actual capital projects, it’s the dirty little secret.”
  • “Challenge is about short-term costs; business demands as fast as possible at the lowest possible cost, and no one says that out loud. Contract partners, get bids, ask about sustainability, etc., – but start with the price.”
  • “I am disillusioned with Lead ‘box checking’; there are a couple of things we have to do as a baseline, but we are rarely innovative.”
  • “We are trying but money is always going to get in the way; it’s nice to have sustainable energy, etc., but a desalination plant costs way more to operate than what you get out of it; good things cost more, and people don’t want to pay for it, they want the cheap thing that will last forever but that’s not great for the environment.”
  • “The struggle in construction is that we rarely do things together. We have different companies moving at different speeds with different agendas and no industry standardised platform. Twenty years ago in safety we developed standardised measurement – we understand it, can measure it, and can improve.”

At the International Women’s Forum conference in Helsinki last year, I came across a new term, “green hushing”, that captures the idea that corporations are not putting their ESG goals out there because many executives believe they are not actionable. When I asked one key construction industry executive about this, his response was, “Are the big goals actionable? Yes. It will require a mindset of possibility. If it’s important, smart people will rally around it and make it happen, being willing to endure the pain of investments.”

Clearly our industry has room for improvement, but ideas like this are encouraging.

Inclusion

I dove most deeply into inclusion because of the book I’m currently writing for Wiley Publishing US on women leading in construction. The study participants rated the inclusivity of the construction industry a 2.1 on a scale of one to four and generally believe that 1) we are making progress, and 2) much work remains. I shared the work of Australia’s Construction Industry Culture Taskforce (CICT) with the audience as I believe these efforts are bringing about change.

However, it is clear that work remains, as evidenced by these two quotes:

  • “It’s a traditional culture. The business is designed by men for men, and we can’t see the forest for the trees. Culture is killing off those that you’ve got. The younger they are, men 35-45, they are leaving; they are going too, overworked. People are a commodity. Not that the leaders don’t care, they don’t know what to do, so they don’t do anything. They lack vision and creativity, vulnerability – all the stuff that’s needed to shift to a more humanised culture. The machine is never-ending, cash flow machine, project-driven, no vision of the industry as a whole.”
  • “Aggressive is worse than rude. I will sit through locker room talk, but when people raise their voice, curse at me, that is where I draw the line. The last time I was physically threatened at work was 2001. He came over the table, and now it’s happening again in the last couple of years – post COVID-19, maybe more stress in the environment. I’m being cursed at by clients, physically threatened. Maybe it’s just the projects I’m on right now.”

We are making progress and more needs to be done.

The bottom line

I love the construction industry. We humbly build and maintain the assets of civilisation, and I believe we do not receive the recognition we deserve. Each of us has the power, as leaders in our industry, to shape the future, to embrace the boulders that are barrelling down upon us – AI, sustainability and inclusion – in order to help build a better industry.

Dr Gretchen Gagel is chair of Brinkman Construction (US) and a member of the Global Risk Committee for GHD Engineering, the National Academy of Construction (US), the Construction Industry Culture Taskforce (AUS), and the Associated General Contractor (AGC) of America National Diversity and Inclusion Committee. Gretchen is passionate about leading change in the construction industry and developing its future leaders. You can hear more from Gretchen on her Spotify podcast, “Greatness”.

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