Frost & Sullivan's recent analysis, Business Model Innovations in the Building Construction Industry, 2020, finds that the building construction value chain will shift from sequential (conventional value chain) to innovative business models with increased penetration of building construction technology. With rapid urbanization and suburban development in Asia-Pacific (APAC), the construction market in the region is expected to reach $14 trillion by 2021 from $10 trillion in 2017. However, the market will be impacted by COVID-19. In a conservative scenario, there will be a long delay in the completion of projects in the commercial segment; in an aspirational scenario, there would be a short delay in the completion of ongoing projects until the COVID-19 pandemic subsides.
"APAC is expected to witness an infrastructure and construction boom in the next five years with a healthy distribution of projects shared between the residential, industrial, and infrastructural segments," said Wen Hui Liu, Energy & Environment Research Analyst at Frost & Sullivan. "Additionally, in this period, innovative business models such as vertical integration, anything-as-a-service (XaaS), and off-site construction will be impacting traditional building construction business in the region."
Advanced technologies such as AR/VR, 3D printing, automation and robotics are expected play a major role in combatting industry challenges such as declined productivity, workforce scarcity and site safety issues. The move to a more modern and digital environment will also play a positive role in addressing the gap of skilled workers.
Liu added: "Besides advancement in technology, sustainability trends such as prefabrication construction, sustainable construction, and green building technology are likely to revolutionize the conventional way business is done in the building construction sector. Further, this trend will reduce carbon emission and gain new revenue streams from the conventional value chain."
To tap into the growth opportunities exposed by the innovative building construction industry, market participants should focus on:
- Investing in teaching employees how to operate advanced construction machinery and IT software.
- Encouraging the greater use of digital technologies such as cloud platforms, Internet of Things (IoT), and building information modeling (BIM) throughout the stages of the project lifecycle.
- Forming vertical integration by fusing large companies, small and medium-sized enterprises (SMEs), and start-up businesses to offer a one-stop construction service.
- Ensuring that products/services developed in the market are compatible with the BIM environment and creating a user-friendly feature for faster uptake.
Source: PR Newswire