This issue of Constructech is all about innovation. I will be honest upfront, I struggle with the term a bit, with all its marketing-related hype. Let me explain.
The dictionary defines innovation as simply the introduction of something new or a new idea, method, or device. Thus, a product can be innovative—such as those found in this year’s Innovations Showcase—or a company can be innovative—such as those found in this year’s Constructech Vision Awards winners.
The challenge is innovation is a buzzword that has come up the ranks recently, and I am concerned that many in the space don’t know what it truly means. Even Merriam-Webster suggests that the words innovation and invention overlap some, as both can refer to something which has not previously been in existence before. But here is the key difference. Innovation can be something new or it can be a change made to an existing process.
Merriam-Webster even suggests this: the first telephone was an invention, the first cellular telephone either an invention or an innovation, and the first smartphone an innovation. Interesting, right? It gave me pause to really think through what an innovation is—and I encourage you to do the same.
I think central to innovation is change. Something needs to change—a technology or a process—and change is critical in the construction industry today. We know there is a labor shortage, low productivity, and a whole host of other factors that the construction industry needs to address head on if it is going to continue building complex, yet sturdy, houses and buildings at a rapid-fire rate. At the same time, construction needs to be careful not to get lost in the hype. There are many new processes and technology tools out there that promise big change and ROI, but one company’s innovation might not be the same as the one down the street.
Thus, I would encourage you to really give this some thought as you are flipping through the pages of this issue. What does innovation mean for your construction company today? Is it changing a business process? Is it addressing a challenge head on with new, emerging technology like all of this year’s Constructech Vision Award winners did? Or is it something completely different? It is time to understand and explore what innovation means to you.
… The dictionary defines innovation as simply the introduction of something new or a new idea, method, or device …
Thinking Smart, Leveraging Tech
Many construction companies I have interviewed have reported “feeling more confident” about the economy than in the past few years. However, as we begin to look ahead, and I ask these same companies are they “feeling more confident about the future,” we begin to see a different pattern emerge. And it’s not to say the construction industry is not booming, it’s just some of the issues that are hovering over the industry might soon also be hindering it.
More specifically, as construction companies grew more confident about the overhaul of the tax code in early 2018, their concerns appear to be only heightened by the skills shortfalls, rising interest rates, and an increase in materials prices.
The CFMA (Construction Financial Management Assn.) results of its quarterly CONFINDEX survey rose during the third quarter to 123, up 3.4% from the second quarter’s reading of 119. The Business Conditions Index, which reflects how well things are doing, jumped during the third quarter by a percentage point to 125; but dipped down 2% from the previous year. It’s interesting to note that anything less than a 100 reading indicates pessimism among the survey participants, while a score of more than 100 reveals optimism.
Even the ABC (Associated Builders and Contractors) CCI (Construction Confidence Index) remain very upbeat about the remainder of the year and heading into 2019. Many are reporting sales will continue to surge during the next several months coupled with higher profit margins.
What’s more, a key component of the economic outlook revolves around the housing market. It’s no surprise the construction market is very volatile and a period of falling house prices is likely to discourage investment and building of new homes. A decline in construction will surely contribute to lower economic growth. Take the housing recession between 2007-2009 when the bubble burst, only to be followed by a lagging housing sector. Is the current growth sustainable?
The point here is not to bring up all the negatives, but rather to take a good hard look at technology such as the IoT (Internet of Things), AI (artificial intelligence), machine learning, sensors, big data, and other predictive analytics tools.
The key focus now needs to be on finding new talent and building the necessary skills in tech that will help lead your construction company well into the next economic turn.
Preparing now when times are good is the best way to shape the future of construction now and in the next several years.