While new technologies emerge everyday that could help the construction industry—technology that generated $15-$18 billion in the last five years—it has been found that such technologies are often underused or not used at all primarily because of risk aversion and lack of processes: construction companies simply don’t want to switch over to unproven technology on large, expensive projects. Therefore, McKinsey & Company, a consulting firm, advocates the government coming in to carry a share of the risk.
In non-residential construction in 2018, an estimated $334 was spent by the construction industry. Of that money, 80% was on public projects, such as health care, education, and transportation. It is McKinsey’s hypothesis that the government should use their presence to force the movement of this new construction toward new technological improvements. With an estimated $500 billion expected to be spent in the coming decade on infrastructure alone, the government is poised to make a substantial change to the way business is done.
Some of the suggested methods for change are simple, such as awarding contracts to companies that offer new, innovative and advanced solutions to old problems. Other methods can include national competitions to drive technological growth, or even “consider publicly supported incubators that allow low-risk testing for new applications.” As an example, the UK estimated that it will spend $780 billion between now and 2027 and pledged to use its purchasing power to drive companies toward technological innovations.