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Disrupting the construction market

The TESLA gigafactory in Nevada outside of Reno. It is the largest building in the world covering half a million square meters. Image credit: Wikimedia Commons

The construction sector is probably one of the less efficient sector, in productivity terms: constructions takes longer than planned, uses more resources… The Digital Transformation has not made a dent in this sector, with few, notable exceptions.

ARUP, as an example, has shifted a good portion of its construction life cycle to the cyberspace, in particular the design, part of the supply chain and part of the operation and maintenance becoming a Digital Transformation leader, in this sector. In addition, data harvested from construction and from buildings operation feed back into the design process of new buildings constantly improving the processes and the result. They are using Digital Twins throughout the whole process.

An interesting article on GeekCulture discusses the evolution of the construction sector taking as example the Tesla Gigafactory 1, a gigantic construction designed in 2014, now fully operational, covering a surface space of over half a million square meters, as much as 17 football fields, in Nevada.

The factory has been designed to be modular and the first module became operational, i.e. produced batteries, in 2016. Subsequent modules have been added to reach the full designed capacity. Actually, the experience gained in the construction and in the operation, as it progressed, led to fine tuning the design of subsequent modules resulting in exceeding the production capacity foreseen at the start of the project.

In other words, using a new approach to construction and to operation has led to a result that was on time, started to generate revenues during the construction phase (as soon as a module was completed it started operation), and overall exceeded expectation.

Interestingly, as pointed out in the article, as soon as rumours of the intention to build such a huge factory surfaced, construction companies started to call Elon Musk offering their service in what was to be a big business. Yet, it seems that Tesla did not turn to those companies for the construction because they did not want to use “classic” construction approach and felt that by assigning the job to an established constructor they would not have the possibility of “re-inventing” the construction paradigm.

Obviously, such a huge endeavour does not translate to the construction of a one family villa or apartment. However, some of the ideas, involving modularity and step by step completion, supported by a full digital design do carry over to other (smaller) types of constructions. The rise of 3D printing in housing construction goes hand in hand with the approach of full digital design.

We might expect a reshuffling in the construction value chain, with possibly new entrants that take care of the basic digital design, offering customisation tools, and a new wave of constructors that use those digital mock up for the actual implementation. A further set of companies may leverage on the digital design to provide remote operation of the house and proactive maintenance. This, in turns, might result in a reshaping of the whole realtor business.

About Roberto Saracco

Roberto Saracco fell in love with technology and its implications long time ago. His background is in math and computer science. Until April 2017 he led the EIT Digital Italian Node and then was head of the Industrial Doctoral School of EIT Digital up to September 2018. Previously, up to December 2011 he was the Director of the Telecom Italia Future Centre in Venice, looking at the interplay of technology evolution, economics and society. At the turn of the century he led a World Bank-Infodev project to stimulate entrepreneurship in Latin America. He is a senior member of IEEE where he leads the New Initiative Committee and co-chairs the Digital Reality Initiative. He is a member of the IEEE in 2050 Ad Hoc Committee. He teaches a Master course on Technology Forecasting and Market impact at the University of Trento. He has published over 100 papers in journals and magazines and 14 books.