Opinion

Stop with the McKinsey statistic negativity

McKinsey
Image: Diego Vito Cervo/Dreamstime.com

Recently the BBC website ran a story proposing that technology has not transformed building. The story quoted the far-too-often-quoted McKinsey & Co report that suggests construction is a “digital laggard”, which drew some industry ire. Here, Johnny Furlong of Dalux springs to construction’s defence.

Everyone in our industry will have seen the chart below or heard the statistic from the McKinsey report. That construction is at the bottom of the table for digitisation, just above agriculture and hunting. This for me is a laughable statistic. As Homer Simpson would say: “Aw, you can come up with statistics to prove anything, Kent. Forty percent of all people know that.”

The McKinsey report is constantly thrown about as evidence that the construction industry is a “digital laggard”. This was recently quoted again in a BBC news article, headllined Why technology has not transformed building, by Emma Woollacott.

McKinsey report screen grab
A table from the oft-quoted McKinsey report.

Using the McKinsey report is infuriating, for a few reasons. First, it is often quoted by those in our industry (contech and proptech). Why these people are so negative about our industry is just weird. Sure, construction has issues. But what industry doesn’t? Our industry is awe-inspiring: we should be championing it.

We do such awesome things, all driven by innovation and technology. Look at some of the engineering on infrastructure projects like HS2, or visit buildings like Battersea Power Station to be truly inspired.

Second, I don’t believe that construction in the UK is a “digital laggard”. And the statistics back up what I believe and see every day on construction sites. Come along to Digital Construction Week and you will see first-hand all the technology that makes UK construction world-leading. 

When you dig a bit deeper into the McKinsey report, and more recent reports, I don’t think it says that construction is a “digital laggard” either. 

The devil in the detail

McKinsey’s Reinventing construction through a productivity revolution is a good report. I have used it myself quite a bit. Especially when it came out seven years ago. But I have grown to dislike it. Or, more precisely, how the report has been used. It is 138 pages long: and because of our collective attention deficit disorder and our love of a good quote (even if untrue), the whole report gets boiled down to one graphic and one quote.

The graphic and preceding article are often used to say construction is a “digital laggard”.  

The charts look convincing. So why do I not believe they are a fair reflection of UK construction?

First, it’s an international report and not specific to the UK. Go a bit deeper and you find the UK is one of the better-performing countries on all metrics used in the research. 

The report is not about digitisation in construction. It’s about labour productivity in construction. And yes, labour productivity when measured in gross value added (GVA) for construction is still lower in the UK compared with other sectors. But this is not due to a lack of digitisation and innovation.

The report is seven years old. Things have changed a lot in that time, especially in the UK. Seven years ago, BIM, robotics, MMC etc were not nearly as widely used as they are today. BIM, for instance, is now used on almost every project.

Technology demonstration at DCW
Technology demonstrations are a key part of Digital Construction Week, highlighting the industry’s forward thinking

Busting the myth

It is a myth that construction companies do not spend on technology, R&D and digitisation. The most recent research proves this. You can read about this in detail in the Productivity in the construction industry, UK: 2021 report by the Office for National Statistics, which states:

  • Construction is spending considerably more on technology and services than it used to;
  • Construction is outpacing the economy as a whole, in the shift from intangible assets to technology assets. This means construction is innovating quicker than the majority of other industries;
  • 14% of all assets in construction are now technology assets, which is higher than the economy as a whole;
  • Education levels and diversity are increasing faster in construction than in other industries. Although we have a way to go here due to starting from a low base.

In my job at Dalux, I am lucky enough to get to see first-hand how construction projects are run today. The BBC article states: “If you took a worker from a 1920s construction site and transported them to a present-day project, they would not be that surprised by what they saw.” This is simply untrue.

If we took a worker from a 1920s construction site, he (as it was only men back then) would not be able to do anything more than carry bricks on a modern construction site. There is so much tech, starting from when he first enters the site, where his fingerprint gives him access through the turnstile. That fingerprint is linked to his digital construction competency (for which he is likely to have used his phone to complete an online site awareness and safety exam).

Sci-fi tech now

Screen grab of Dalux being used on a phone
A 1920s construction worker would really struggle with modern site technology like the augmented reality app on Dalux’s phone app (Image courtesy of John Daly at John Sisk & Son).

Almost everything is digitised. All design is completed in 3D using BIM – with drawings and 3D BIM models available on mobile phones. Laser tools and point cloud data are used for setting out. Every tool, from a screwdriver upwards, is electrified. 360-degree videos are commonly used to record site conditions. So much paperwork is removed with CDEs and digital field tools. All of this is common on a construction site today.

Daily, most construction workers use their mobile phone on site. From common tasks such as viewing drawings and answering emails, to using tools such as Dalux model viewer with augmented reality (where you can use your phone and camera to seamlessly combine BIM models into your real-time physical environment for dynamic viewing and interaction).

If you attend the more advanced construction sites, you will see some insane tech, with exoskeletons and robot dogs. It feels a bit like you’re in a sci-fi film. The 1920s construction worker would be in shock and awe.

All of this tech and more will be on show at Digital Construction Week, where you will see hundreds of construction companies engaging with contech and proptech firms.

The construction industry in the UK is not a digital laggard. Technology has certainly transformed the building sector. So, stop quoting the McKinsey report.

Let’s be positive and champion UK construction as a leader in innovation, digitisation and technology.

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