The Future of Housing, Part 4: New Tech, Now
In the previous post in this series, I explored how megaregions in the US have formed, and where new opportunities for growth in the US housing market will arise.
In this post, let’s explore several of the major steps that the housing industry can, over the next ten years, take to increase construction productivity, address future labor shortages and begin to achieve significant project savings via use of the latest technology in the design and construction world.
Robotics
For several decades, robots have been a mainstay in other industries, taking on physically difficult, dangerous, or dirty jobs, such as welding and spray painting in the auto industry. Robots already take on dirty, dangerous, and labor-intensive construction jobs, such as inspecting and cleaning underground pipes, cleaning office buildings, or collecting trash.
But, as their productivity has improved, robots are being programmed for many common construction tasks, such as installing steel studs and sheetrock, laying bricks as well as cleaning and maintenance.
This technology is also being extended to new types of robotic prosthetics, such as “exoskeleton” braces that enable construction workers to use heavy equipment across a project site without constant interruptions due to fatigue. Robotics will shortly enable workers with limited mobility to function more normally, helping to keep partially disabled workers employed and off disability rolls.
Here is some good news: robot prices are already decreasing so that by 2025 (or maybe even earlier), you will be able to save 16% on labor costs by replacing human employees with robots.
And, as the cost of robots fall below $50,000, we will begin to see that they will create as many jobs in the housing industry as they will replace.
Modular Construction
Many developers and contractors already operate as design/builders. In my opinion, this facet of the industry will continue to evolve as the most cost-efficient and profitable way to manage construction operations.
Make no mistake; many of you have been operating in this sphere for years. Modular home builders and design-build companies are well on their way to perfecting this model.
These companies have known for some time that by combining high quality design with the identifiable benefits of manufacturing components off-site, they are able to provide a controlled project environment that improves both quality and worker safety.
Modular construction combined with some of the advanced technology I will now mention will prove to be the most revolutionary method home builders can use to shave months off typical projects and bring significant savings to the bottom line.
One of the most dramatic changes sweeping some, and eventually all industries, is the advent of cars, trucks and aircraft that are completely or partly autonomous.
The number of miles driven by Google’s autonomous cars in recent years has exceeded 1.5 million—with only one reported accident caused by a self driving car (in February 2016).
What this means for the construction industry is that drivers will not be hired solely to make deliveries to project sites. Think about the enormous implications for vehicles that can automatically program the most efficient routes for “as needed” deliveries to a project site via software imbedded in their frames.
Imagine members of your sales and marketing team meeting prospective purchasers in a car where a full preview of what they are about to see is made from a rear facing seat while the driverless car they are in tours the site. That will make some impression.
The potential benefits of autonomous cars and trucks will also lead to reduced CO2 emissions, more work time for drivers (with hands-off driving) and enable them to take on other project-related tasks, which will lead to increased bottom line profitability for every project.
Drones
Drones are not just for the military or hobbyists. Tokyo-based Komatsu has made a major commitment to the use of drones throughout its large domain of projects as part of its SMARTCONSTRUCTION strategy. Facing a shortage of workers? No problem. Komatsu is using drones and driverless bulldozers to bring down costs for excavation. The company is committed to have drones and unmanned excavators move along pre-programmed sites based on 3D models of the terrain scanned by drones that send images to its computers.
Why the impetus to invest heavily in the latest high tech gadgets? Komatsu’s president of Smart Construction had a simple answer: “We have to improve productivity.”
3D Printing
Most of us, by now, have heard about 3D printing. Maybe it has been from hobbyist friends, or we have been hearing that 3D printing represents a security risk from plastic guns that can’t be detected at TSA security stations in our airports.
However, the real value of this new technology to society may prove to be its ability to introduce cost reduction, efficiency, and replicability to the design and construction industry. With an expanding range of materials and rapid price declines, 3D printing has matured to the point where a bridge in Amsterdam is currently being designed using this new technology, and entire houses can now be 3D printed from concrete.
Because 3D printing can transform an idea directly from a 3D design file to a finished part or product, productivity is gained by skipping many traditional manufacturing steps. Most significantly, 3D printing enables on-demand production, with significant implications for supply chains and reducing the need to stock spare parts — a major cost for manufacturers, and a significant time-saving mechanism for construction projects.
By committing to adopting these new technologies, construction and development firms ensure exciting careers for current and future generations.
But is it worth it for my company?
Now, there are some who will challenge the wisdom of proceeding down the path of adopting new technology. They would warn against it for fear it will disrupt current operations, strain existing business relationships, and leave many of long-term employees jobless. Just as with the disruptive arrival of technologies like the cotton gin, the Jacquard loom, the locomotive, and the automobile, the inevitability of the technological advances we are discussing will not be delayed.
To those naysayers, I point out that the efficiencies to be achieved by new technology will lead to greater profitability that will enable each of you to re-invest those savings in future projects. It means that you will pay higher wages to those who operate and manage these new tools, and it means that you will design and more efficiently build better projects that will provide greater benefits to your shareholders, your highly paid workers and the communities you serve.
The youngest generation of workers is already demanding employment at firms that use the latest technology. Millennials change jobs more frequently than any prior generation, and they will not hesitate to move to businesses where they can utilize their technical skills to the fullest. Firms looking to retain talented employees have no viable choice but to embrace technological change.
One clear message is this: how we define and conduct the housing industry is changing. The need for high-level technical skills will grow with every passing year, even on your construction sites.
Though a financial and strategic challenge, embracing new technologies and new methods will bring greater efficiency to construction operations and an increased market share for firms that are ahead of the curve—improving their overall profitability.
If you are a real estate executive, you are being presented with the “bet the business” choice of a lifetime. You can stay as you are, continue to compete in the markets where you are comfortable and resist the future. Or, you can choose to seek out the brave new worlds outlined above, and adopt the new tools that will allow your company to increase productivity, attract the best and the brightest talent, and provide value-added profitability to your customers and your shareholders. I know which decision I would hope you make.
This blog post is adapted from a speech I gave at the 2016 Housing Leadership Summit in Laguna Niguel, CA.
