Bricks and Bits: Transforming the Construction Industry Through Innovation

Notwithstanding the current surplus in housing, over the next quarter century the U.S. will need to invest trillions of dollars in construction to meet the demands of a growing population and to refurbish aging infrastructure. Doing this efficiently will be critical to America’s economic future. However, when benchmarked against America’s leading industries, the construction industry is anything but efficient. Indeed, measured growth in construction industry productivity has actually declined over the last two decades. And one key reason appears to be slow adoption of new technologies, particularly IT.

This challenge has been known for decades, but the industry has largely been incapable of solving it on their own, in part for two main reasons: 1) the relatively small size of the firms, making it difficult to attain the economies of scale needed for large scale technology modernization; and 2) the coordination challenges involved in getting so many disparate players to adopt common technology and standards.

In short, the industry faces unique challenges which suggest that absent a proactive national construction innovation policy that it will continue to be an innovation and productivity laggard.

As such, the federal government can help spur construction industry modernization and productivity, through a variety of tools, including R&D and standards coordination and purchasing. Indeed, through GSA and the DOD, the federal government is the largest purchaser of construction services in the world. Could they use that power to help drive industry innovation? And with its focus on technology and standards, NIST can play a key role in enabling industry interoperability.

To explore these issues, ITIF is holding a forum on Innovation in the U.S. Construction Industry. The forum will explore the challenges facing the industry, particularly around the use of information technologies and examine the role the federal government can play to help spur innovation, IT adoption, and productivity.