While construction remains the largest industry in the global economy, accounting for 13% of the world’s GDP, the annual productivity growth has been relatively flat. The profitability is low, with around a 3-5% EBIT margin, with 98% of all megaprojects running over budget and over schedule.

The building construction sector is rarely perceived as innovative regarding materials use or technology adoption. There are various reasons that contribute to this common perspective—or prejudice—towards the industry: each project is unique and tends to get increasingly complex as it progresses; construction companies are confronted with extensive regulations; and contracts between clients, contractors and subcontractors are often not properly aligned, harming collaboration. Moreover, transferal of risk to others in the supply chain, inefficient planning, traditionally limited standardization in processes and a lack of qualified workers are common industry pain points.

Reprinted courtesy of Romy Maunz, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.