Why Non-Innovation in Construction Is a Risk and a Costly Gamble

construction management planning

Recent technological advancements have shaped today’s industries at breakneck speed, and failure to keep pace can incite the danger of stagnation and obsolescence. With the current industry standards, not taking innovation seriously is too much of a risk and a costly gamble. The world hurtles toward a future driven by efficiency and sustainability, and clinging to outdated practices can put your business at stake.

Consider the cautionary tale of Nokia. The story of this multinational telecommunication company has dominated corporate history to this day. In 1998, Nokia Corporation was the market’s leading mobile phone provider worldwide, with a company profit of $4 billion. When Apple introduced the first iPhone in 2007, it became one of Nokia’s strongest competitors. For a while, Nokia retained half of its profit, but not until 2010 when matters took a different turn.

In a span of six years following Apple’s iPhone release, Nokia lost about 90% of its market value and never recovered. They claimed they “did nothing wrong, but somehow, we lost,” said Nokia CEO. The top reasons for Nokia’s dwindling profit and eventually, downfall, were resistance to smartphone innovation and ineffective marketing strategies.

Similarly, the construction industry stands at a crossroads, where failure to innovate could lead to the same fate. With the global construction market projected to grow $8 trillion by 2030, the stakes are higher than ever. Yet, a significant portion of construction firms continue to rely on antiquated and traditional methods.

The Perils of Non-Innovation

Recent studies highlight concerning trends within the industry. A report by McKinsey & Company found that construction productivity has stagnated over the past two decades, trailing behind sectors like manufacturing and agriculture. Additionally, project delays and cost overruns continue to plague construction projects globally, with non-innovation cited as a primary cause.

The consequences of non-innovation extend beyond financial losses. Outdated construction practices contribute to environmental degradation, worsen climate change, and endanger future development projects. Worse, safety concerns persist, with preventable accidents resulting in loss of life and substantial liabilities for companies reluctant to adopt innovative safety measures.

For instance, the collapse of the Skyway Extension Project in Muntinlupa City in November 2020 highlighted the dangers of outdated construction practices. Investigations revealed substandard materials, poor workmanship, and inadequate safety protocols as contributing factors. This incident underscores the urgent need for innovation in construction techniques and safety measures.

Innovative Project Management Solution

A cloud-driven intelligent model such as Building Information Modeling (BIM) is one innovative solution to optimize the entire construction project lifecycle. BIM revolutionizes traditional construction practices by providing a comprehensive digital representation of a building’s physical and functional characteristics. From initial planning and design to construction management and facility operation, BIM facilitates collaboration among project stakeholders and streamlines workflows.

Oracle Primavera is also among the cloud-driven construction management platforms that connect project owners and teams when planning, scheduling, allocating resources, and managing risks. The platform facilitates seamless collaboration among stakeholders, from engineers and construction professionals to contractors and subcontractors by centralizing project data and communication channels.

In addition to innovative construction solutions is the use of green architecture along with environmentally friendly processes, an attractive option for eco-conscious builders. Exploring alternatives to traditional Concrete Hollow Blocks (CHB) is one way to realize this, addressing the need for sustainable, cost-effective, and efficient building materials. This includes the adoption of prefabricated modular construction techniques while incorporating green materials such as sustainable timber or recycled steel.

Advancements in sustainable building materials, such as bamboo, hempcrete, or recycled plastics, offer promising alternatives to traditional CHB as well. These renewable and eco-friendly materials boast excellent strength-to-weight ratios, thermal insulation properties, and low carbon footprints, making them viable options for modern-day construction projects.

The widespread adoption of these alternatives may require overcoming regulatory barriers, industry standards, and market acceptance. Nonetheless, as sustainability and efficiency become increasingly paramount in the construction industry, exploring and embracing alternative building materials and green construction techniques play a crucial role in shaping its future.

While the upfront costs of smart, green construction may be higher compared to traditional building methods, the long-term benefits, including reduced operating costs, increased property value, and improved occupant health and productivity, often outweigh the initial investment.

AI in Construction Project Management

The good news is that integrating artificial intelligence (AI) technologies into the construction process can offer practical and cost-effective solutions. AI applications in construction processes will undoubtedly shape the future of the industry while driving efficiency, sustainability, and innovation.

AIMHI emerges as a game-changer in this department. AI Meets Human Intelligence (AIMHI) offers a profit-first approach to construction management tailored specifically to prioritize reducing costs in projects. The Mindanao-based AI startup harnesses the power of artificial intelligence to optimize resource allocation, reduce waste, and maximize profits and returns on investment, all while maintaining a focus on the bottom line.

Unlike traditional project management platforms, AIMHI’s affordability and accessibility make it an attractive option for construction companies seeking practical yet efficient solutions, especially in Mindanao. By integrating seamlessly with existing workflows and systems, AIMHI empowers construction teams to make data-driven decisions, mitigate risks, and drive profitability. While other project management platforms primarily focus on scheduling and organizing tasks, AIMHI has all-in-one project management features that use historical data to learn project inefficiencies and overall cost behavior. This allows them to offer real-time insights and actionable recommendations that help contractors proactively make decisions before the risk occurs. 

AIMHI is set to unveil a suite of innovative features in early June 2024 aimed at revolutionizing project management in the construction industry, with a focus on advanced risk assessment capabilities and AI-driven “Next Best Activity”. These new features offer strategic recommendations aimed at minimizing risk, lowering costs, and maximizing profits. Such recommendations encompass alternative work strategies and precise cost estimates, providing invaluable insights to guide decision-making processes and enhance project outcomes.

The choice is clear: adapt or risk obsolescence. Non-innovation in construction is not just a gamble—it’s a dangerous proposition with far-reaching consequences. The time to embrace innovation is now, lest the industry falls behind in an ever-evolving world.

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Planning Department Head

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