Opportunity for innovation in construction
Construction matters to the global economy. Every year, there is about $10 trillion in construction-related spending globally, equivalent to 13 percent of GDP, making it one of the largest sectors of the world economy. The construction sector employs 7 percent of the world’s working population and, by building the structures in which we live and work, which create our energy, materials, and goods, and on which we travel, has an impact well beyond its own boundaries. However, the sector’s annual productivity growth has only increased 1% over the past two decades. Contrasted with growth of 2.8 percent in the world economy and 3.6 percent in manufacturing, this clearly indicates that the construction sector is under-performing.
It is estimated $1.6 trillion of additional value added could be created through higher productivity, meeting half the world’s infrastructure need. It is possible to boost productivity by 5–10 times for some parts of the industry by moving to a manufacturing-style production system. Obviously, there is plenty of room in this sector for our innovative thinkers!
Barbosa et al. (2017). MGI Reinventing Construction: A Route to Higher Productivity. Retrieved from: https://www.mckinsey.com/~/media/McKinsey/Industries/Capital%20Projects%20and%20Infrastructure/Our%20Insights/Reinventing%20construction%20through%20a%20productivity%20revolution/MGI-Reinventing-construction-A-route-to-higher-productivity-Full-report.ashx.