One step change for construction and engineering, one giant leap for decarbonization

December 13, 2022 | 3 minute read
Rogier Roelvink
Insight Program Director
Mark Hardaway
Insight Program Director
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The construction industry is under pressure to make a huge productivity step change, with a predicted spend of $1 trillion needed to meet global infrastructure demands, and an additional annual capital expenditure of $3.5 trillion to meet net-zero carbon emissions by 2050.

Based on Oxford Economics estimates of the global construction market, the global engineering and construction industry will need to achieve 40% more annual output over the 2020 global construction market value to close the infrastructure gap and reach net-zero targets. Modernization of the global engineering and construction market is required to meet this demand, and digitalization can make a hugely positive impact on this effort.

The infrastructure and decarbonization gap

The construction industry has long relied upon traditional approaches such as manual labor, mechanical technologies, and established operating models to improve productivity and meet market demand. The stated infrastructure and decarbonization gap places a huge demand on the global engineering and construction industry’s delivery capacity.

The paradigm shift to drive productivity and efficiency

We now find ourselves at a tipping point where huge market demand-led productivity, efficiency requirements, technology advances, and capabilities are converging. It drives a paradigm shift in use of innovative (specifically digital) technologies that can connect teams, synchronize data sources, and empower informed decision-making.

The need to address climate change and meet global carbon net zero and sustainability targets is rapidly becoming a top priority, reinforcing the required paradigm shift. This makes sustainability a fourth critical element to the golden triangle of time, cost, and quality to be governed, managed, and controlled. Technologies in smart platforms provide the industry with opportunities to address the challenges and make the changes required to accommodate the industry paradigm shift.

Modern methods for construction—a new approach

While piecemeal digitization approaches that address time, cost, and quality deliver efficiency gains, it will not be enough to address the coming sustainability (carbon net zero) challenges. For example, technologies that enable impressive cost reductions and productivity gains in individual projects don’t necessarily pay due regard to the assets’ whole life sustainability impacts.

Modern methods for construction embrace manufacturing (production-based) techniques, encompassing offsite/onsite delivery, modular construction, and innovative technologies and materials. Increasingly, evidence surfaces that shows adoption accelerates construction project delivery, reduces costs, and helps fill the infrastructure and decarbonization gap.

Adopting modern methods for construction requires a combination of new technologies, platforms, and ecosystem partners to drive end-to-end value, increased readiness to exploit current and future market, and technology opportunities.

The roadmap to success

The engineering and construction industry is beginning to evolve and transform. Digitization is the launchpad that enables the much-needed paradigm shift. To address productivity, efficiency, and sustainability challenges, engineering and construction businesses need to adopt a top-down strategic transformational approach.

With a commonly accepted lifecycle of approximately 25 years for high-value installed assets and 50 to 60 years for built assets means that any net-zero or decarbonization targets aimed at 2030 or 2050 are one or even less of an asset lifecycle away. Decisions made today greatly affect our collective ability to meet any sustainability and net-zero targets. To optimize the potential benefits of modern methods for engineering and construction, businesses need to understand how they fit in and the industry’s evolving digital technology landscape.

Oracle Construction and Engineering, the global leader in construction management software and project portfolio management solutions, helps you connect your teams, processes, and data across the project and asset lifecycle. Drive efficiency and control in project delivery with proven solutions for project controls, construction scheduling, BIM/CDE, and more.

Read more about sustainability in construction and engineering:

Oracle helps industries transition to a low-carbon economy

Q&A: A sustainable conversation with Oracle CSO Jon Chorley

Sustainability practices a priority at new UK Oracle Industry Lab

Building a defense against climate change is a matter of national security

Take a tour of the Oracle Industry Lab

How collaborative planning shapes construction of renewable energy project

Rogier Roelvink

Insight Program Director

Mark Hardaway

Insight Program Director

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