Construction tech is a thriving startup sector that has so far been flying under the radar. Technology is on the verge of revolutionising the construction sector, and a new report shows that it will have a profound impact on the Australian economy.
StartupAUS CEO Alex McCauley estimates there are over a hundred Construction tech startups on the rise in Australia, and they are hoping to partner with the local construction sector. In turn, this sector contributed $134.2 billion to the economy (8.1% of GDP) in 2015-16 and employs more than a million people.
Technology is on the verge of revolutionising the construction sector and that will have a profound impact on the Australian economy.
Increased digitisation could help boost the value of the sector by $25 billion year on year by 2020. Mapping technologies like Building Information Modelling (BIM), Virtual Reality (VR), project management technology, licensing, and workplace safety software are technological pathways that allow local startups to add value.
Now, a new report finds that close to $100 million has been invested in Construction tech startups since 2016.
The report, titled Digital Foundations: How technology is transforming Australia’s construction sector, was released in October 2017 by StartupAus at the Construction Technology Summit 2017 in Melbourne. It was produced in collaboration with Aconex, Lendlease, EY, and the Victorian Government.
Drawing on interviews with 42 individuals from 31 organisations in the construction sector, including 16 representatives of the startup community, the report has found that instead of disrupting the construction industry completely, startups are looking to provide digital solutions that add value, enhance safety, and ensure greater efficiency.
Startups are looking to provide digital solutions that add value, enhance safety, and ensure greater efficiency.
It details how some of the leading Australian technology companies are vying to transform the construction sector., It also provides in-depth analysis on the wave of the change we are already starting to see. Construction technology startups are defined in the report as those creating digital and technological solutions for the planning, design, and building processes of the construction industry.
The top 20 construction companies in Australia account for almost 60% of revenues. Getting construction tech startups and the larger, established construction companies onto the same technical page was a high priority.
The report makes 6 recommendations to help turbocharge the development of a construction tech startup in Australia, along with the necessary implementation times.
- Develop a consistent set of standards around technology adoption and use with support from government.
- Federal and state governments to lead by proactively incorporating adoption of new technology for large infrastructure projects.
- Ecosystem to establish a dedicated coworking space for construction tech startups, alongside a construction tech accelerator program.
- 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.
- Government and industry to support and expand events focused on identifying technology opportunities.
- Provide additional support for collaborative research initiatives focused on construction tech. 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.
Emerging trends and technologies in the space include BIM, 3D-printing, and smart buildings. Using such tech solutions to equip the traditional construction sector could potentially add $25 billion in value to Australia’s economy year-on-year within the next decade. It could also mean adding a further 100,000 jobs for Australians within the next five years.
It could also mean adding a further 100,000 jobs for Australians within the next five years.
Construction tech startup Assignar has recently raised $3 million for its cloud-based construction management offerings, and says construction companies are quickly realising the need to innovate. Otherwise, they face the danger of becoming obsolete.
Assignar co-founder and chief Sean McCreanor predicted that construction tech in Australia will boom in the coming years because of the federal government’s $75 billion infrastructure spend, not to mention the $16 billion in existing developments.
A leading Australian player in construction tech is ASX-listed construction management software firm Aconex. Nick Peace, Aconex’s head of corporate development, says the global construction sector knows that it has to change over the next five to ten years. Australian constructors are at the leading edge, he says, and implementing the recommendations will help put local construction techs and the bigger players upstream in a globally competitive position.
Australian constructors are at the leading edge, he says.
While FinTechs, RegTechs, BioTechs, and AgTechs have attracted much of the spotlight in recent years, it appears that construction tech is a sector where Australia is already a heavy hitter. With the adoption of technology from drones and robots to artificial intelligence and virtual reality, the way we think about the ‘bricks and mortar’ industry is about to change forever.
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