Will Industrial AI Help Build a New Frontier for the Construction Industry?

The construction sector is one of the largest industries of the global economy. About $10 trillion is spent on construction-related goods and services each year — equivalent to 13% of the world’s GDP.* But despite this enormous value, it remains one of the least digitized industrial sectors. Can the tides be turned?

Productivity growth for the construction industry has been relatively stagnant globally, averaging just 1% annually over the past 20 years. In comparison, the manufacturing sector has been growing by more than 3% annually.* How can today’s construction companies — and the equipment dealers that serve the industry — gain new ground?

To put the opportunity into context: If the construction industry were to boost its productivity growth to around 2% then it would add $1.6 trillion more to the global economy each year, which would meet half of the world’s annual infrastructure needs.*

New technologies like industrial AI are laying the foundation to achieve this goal. It starts with the mountain of data that construction companies are sitting on, but have yet to fully capitalize on. The information is messy, siloed and until now has gone largely unused.

AI Will Do the Heavy Lifting for Tomorrow’s Construction Leaders

AI turns valuable, untapped data it into actionable insights that drive financial outcomes across the construction ecosystem. Specifically, the rising demand for increased productivity and improved safety at construction sites is driving rapid adoption of AI technology solutions. By 2023, the AI market among construction companies is expected to be worth $1.8 billion.~

Uptake’s president, Ganesh Bell, recently guested on the Association of Equipment Manufacturers’ podcast — CONEXPO-CON/AGG Radio — where he spoke with host and IoT expert Peggy Smedley about the role industrial AI is playing in reshaping the construction industry as we know it.

Here are the top three takeaways from the conversation:

1) Construction leaders are searching for ways to unlock financial value from the mountain of data they’re sitting on.

This includes data around machines, maintenance records, labor, inventory, operations, project schedules and project management. It also includes available data from external sources on weather, traffic, markets and pricing. AI synthesizes all of this information — the scale of which exceeds humans’ ability to process — and turns it into actionable insights that significantly increase the productivity, reliability, and safety of humans and machines alike.

2) Construction companies should start by identifying which outcomes matter most to the business.

Focusing on technology first ultimately leads to debates, delays, and not knowing how to effectively apply chosen solutions and drive adoption for them. Instead, construction leaders should focus first on the business outcomes they’re looking to achieve most immediately. For example, is it important to cut your unplanned downtime, maximize your available parts, reduce your inventory, or optimize your labor force? The key is to know your desired early outcome, as it ultimately guides all subsequent decisions. The right technology solution will deliver meaningful financial results in the near term while also establishing a foundation for supporting future use cases and business objectives.

3) In order to survive, compete and thrive, construction leaders must create their own belief system that digital technology will fundamentally reimagine the industry.

Construction companies need a journey map that helps them de-risk their businesses from the fundamental changes that are happening to the industry. The journey map must identify the immediate organizational areas and use cases where new digital technologies like industrial AI can make an impact. From there, it must outline the other avenues where they can continue to grow by gaining new efficiencies, achieving new levels of productivity, saving time and money where possible, predicting and preventing problems before they happen, and even unlocking new revenue streams and business models.

Listen to the full episode of the podcast below:

Find out how a major equipment dealer for the construction industry increased revenue by $540,000 in one year with Uptake:

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* McKinsey Global Institute, “Reinventing Construction: A Route To Higher Productivity”

~ Markets and Markets, “Artificial Intelligence In The Construction Market”