Construction companies could unlock an estimated £89 billion in value over the next decade and significantly lower the cost of housing by harnessing digital technologies, according to new research from Accenture.
The study found that by investing in digital technologies, the UK construction industry could create value equivalent to 7% of industry GVA over the next decade. On top of £6.1 billion in new revenue opportunities, the industry could reduce costs by more than £82.8 billion and pass on significant savings to housebuilders.
Accenture's analysis used the methodology developed in partnership with the World Economic Forum to understand the value of digital transformation, for both industry and society.
The research identified several ways in which digital technologies can transform the sector and boost productivity. Offsite construction sales can be increased through virtual reality marketing, project design costs can be reduced by using 5D building information mapping to visualise the impact of design alterations in real time, and artificial intelligence and machine learning can diagnose maintenance problems and autonomously order new parts.
Individuals will also benefit from higher standards of living and more connected homes.
"Most construction companies we work with recognise that digital technologies can drive transformation and growth, but many aren't yet realising this potential. This research quantifies the potential prize for industry, individuals and society if they get this right," said Ben Salama, Managing Director at Accenture Digital. "The solution is what we call Industry X.0, an action plan for embracing profiting and profiting from technological change. More than just transforming into digital businesses, construction companies must look at how to reinvent operating models, production and value chains."
Industry X.0 is how Accenture defines the digital reinvention of industry, when businesses use advanced digital technologies to transform their core operations, their worker and customer experiences and ultimately their business models.
New levels of efficiency are achieved in the core of R&D, engineering, production and manufacturing through integrated systems, processes, sensors and new intelligence. Worker and customer experiences are redesigned and personalised.
The level of demand for Industry X.0 is revealed in Accenture's survey of 931 executives from 21 countries. Only 13% of respondents say their businesses are getting both greater efficiency and business growth as a result of their digital investments. 80% want new efficiencies, new growth and new experiences to be delivered all at the same time, and 64% agree that failure to leverage the components of digital value will cause them to struggle for survival in the future.
Yen-Sze Soon, Managing Director at Accenture Digital, said, "As today's figures show, the UK construction industry continues to struggle with dwindling growth. There are many reasons for this decline, but new and emerging technologies like robotics, artificial intelligence and additive manufacturing could provide the industry with a much-needed shot in the arm, helping to accelerate growth and unlock an estimated £89 billion over the next decade.
"Most construction companies recognise that digital technologies can drive transformation and growth, but many aren't yet realising this potential."
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