Construction Industry Still Struggling with Digitalisation
ResearchWhen it comes to the use of digital technologies, the German construction industry is still lagging behind other industries at home and internationally. So far, the construction industry has invested little in digitalisation projects, often limiting itself to the use of basic digital solutions such as electronic invoicing or CAD applications (used by 38.5 and 36.2 per cent of companies in the construction industry including planning), while construction-specific technologies such as 3D scanners and virtual reality are rarely used (2.8 and 7.5 per cent of companies, respectively).
These are the results of a study on the contribution of digitalisation to productivity in the construction industry, which ZEW Mannheim conducted on behalf of the Federal Institute for Research on Building, Urban Affairs and Spatial Development (BBSR). The results are being presented today in Berlin during a joint final event by ZEW, BBSR and the Mittelstand 4.0-Competence Centre for Planning and Construction.
The main obstacles to the successful implementation of digitalisation projects are the excessive financial (62.4 per cent of companies) and temporal (61.5 per cent) costs associated with them. The majority of companies surveyed still perceive excessively strict data protection rules (57.5 per cent), inadequate broadband expansion (55.6 per cent), and a lack of standards and interfaces (54.9 per cent) as impeding factors. Also worth noting is that more than half of the companies (52.1 per cent) simply do not see any need for digitalisation projects.
A great untapped potential for digitalisation in the construction industry
“In particular, small businesses – particularly numerous in the construction sector – do not have time to deal with digitalisation. At the same time, it would be important for them to prepare for economic downturns; digitalisation can definitely help with this,” says Professor Irene Bertschek, project leader and head of the ZEW Research Department “Digital Economy”.
Nevertheless, the construction industry has recognised the potential digitalisation has for increasing competitiveness, innovation, and labour productivity – all economic variables that are crucial for success. This can be seen from the fact that significantly more companies expect positive results from digitalisation in the future. For example, 57.5 per cent of companies expect digitalisation to have a positive impact on their competitiveness in three years, while only 49.3 per cent of companies see these positive effects already today. And the effects of digitalisation on the overall success of the company (56.0 per cent in three years vs. 46.9 per cent today) and its ability to innovate (48.9 per cent in three years vs. 40.7 per cent today) are also seen in a much more positive light in three years compared to today. Importantly, 47.3 per cent of the companies judge the productivity effect of digitalisation as positive for the future.
“The study has shown that there is still a great untapped potential for digitalisation in the construction industry, and that the latter has recognised the opportunities offered by digitalisation for productivity and quality gains. With around two million employees and almost 330,000 companies, the construction industry is one of the most important economic sectors in Germany. It’s important to make the best of this potential – not just for the industry’s sake but for the country’s overall economic development as well,” comments director of BBSR, Dr. Markus Eltges, on the results of the study.