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– 7 min.

Why productivity could boost revenues in the UK construction industry by up to £45 billion/year

Martin O’Rourke
Director of Communications
Sometimes it’s in the figures and when Darren Martin at AtkinsRéalis told Trackunit NEXT better productivity could unlock an extra £45 billion/year of value in the UK construction industry alone, more than a few ears were pricked.

It’s easy to forget that among all the lofty ideals we regularly espouse as we look towards a better construction industry in the future, this still remains an industry that is fundamentally focused on efficiencies, costs and bottom-line considerations.

So when AtkinsRéalis’ Darren Martin said better productivity could boost revenues in the UK construction industry alone by up to £45 billion/year ($56.7b/year), you can bet the interest among the 1,000+ audience registered for Trackunit NEXT climbed a notch or two to understand how.

That’s not to say that ideals and bottom-line considerations like efficiency cannot coexist. AtkinsRéalis states its company purpose as ‘engineering a better future for our planet and its people’, and the website is full of examples of how improved efficiency and productivity can positively impact safety, sustainability, and stakeholder outcomes.

Well trodden

But Martin, Chief Digital Officer at the design, engineering and project management specialists, neither suggested becoming more productive is a formality nor that the path towards such value creation is easy to follow. The path is nevertheless there, he said, and in some cases, already well trodden.

“We’ve seen a big shift from concepts of material items being of value such as gold, oil and so on,” said Martin. “And now it is the digital elements, particularly data, that are emerging as being really powerful. Those organizations that can either harness the data and monetize it, or differentiate and grow will be those that are more likely to be successful in this disruptive period.”

Citing disruptors, he focused on electric vehicle manufacturer Tesla as a perfect example. “Tesla had taken a market leadership position early on by solving problems that had been perceived to be unsolvable,” Martin said. “For example, consumers considered electric cars to be less powerful, until Tesla designed the fastest production car on the market.

‘Those organizations that can either harness the data and monetize it, or differentiate and grow will be those that are more likely to be successful in this disruptive period.’

“Tesla has a market capitalized valuation that is now worth more than the next five companies together and those companies like Ford and others have been in the industry from the beginning,” he said. “So there’s real opportunity to get this right and disrupt and lead.

“Many companies are taking note and establishing how they’re going to reinvent themselves or have reinvented themselves,” said Martin. “We’re seeing more and more advancements in the march of the machines.”

Disruptive force

Martin also highlighted how Netflix had also harnessed better technology to establish a market-leading position in streaming services. He said the importance of having a platform completely aligned with a vision was essential to maximizing the impact of any disruptive force.

“We see Netflix displacing Hollywood demonstrating the link between having the right technology platform and then having the vision and dreaming big to make best use of that opportunity,” said the AtkinsRéalis CDO.

As far as construction is concerned, Martin particularly advocated for solutions that connect people with the data and technology they need to work smarter and more efficiently, citing a project AtkinsRéalis has worked on with the National Underground Asset Register to create “a new digital map or twin of the nation’s underground assets,” he said. “It’s envisioned that this will yield around £350 million/year of economic growth through increased efficiency.”

Martin also cited the work of the Construction Leadership Council in the UK which works with government, organizations and technology leaders in the industry across all facets of construction including creating an environment for a successful transition to net zero.

According to the CLC, the £45b/year productivity boost for UK construction could be broken down into three separate but interrelated segments which, if successfully integrated, would deliver that value.

The UK construction sector can unlock value of up to £45b/year

The first involved better preparation on projects for an added value of £30b and a 17% boost, a further £12.7b in better building processes for a 7% increment, and another £2.8b on better processes for a 2% rise with machine learning an integral part of facilitating that productivity boost.

The next chapter

“We’re now seeing the mobility of these machines out in the construction world, being used in different scenarios,” said Martin. “There’s a lot more operational technology relying on machines out in the field. Artificial intelligence has absolutely boomed in terms of public consciousness in the last year with gen AI and the use and ease of that.

‘We’re also at a design level, using technology more and more, and learning about our environments to optimize schemes for construction and the way in which we construct from a carbon perspective.’

“So we need the next chapter as there is a lot of opportunity in our industry, and if we can drive some of these productivity gains, make better links between the design process and integrate that into how we prepare and execute in the construction process, there’s an enormous amount of opportunity.

“We’re also at a design level, using technology more and more, and learning about our environments to optimize schemes for construction and the way in which we construct from a carbon perspective,” he said. “We’re seeing a lot more use of technology and bringing that into our thinking.”

Martin said companies can invest significantly in their own digital twin capability, but said the best results are likely to come from bolting their own data and IT infrastructure to a common platform.

“The real value here is the integration of the data on a common platform that effectively acts as a system integrator like we’ve been doing in partnership with the UK government,” he said. “When you are able to enable different technologies and data sets exist in a common data environment, that can drive real value across a multitude of suppliers accessing the data.”

According to Martin, companies need to work out how to harness these capabilities and what kind of tech stack they need to leverage gains.

“In the end, it’s about what data we need, how do we partner better and what are we doing with the data in our organization to enable these partner technologies, and the algorithms that drive value both internally and through the supply chain to customers.”

If you missed Martin Darren’s keynote at Trackunit Next 2024, you can watch the full show on-demand now.

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