How to push the accelerator on a productivity gridlock
The promise of our future cities is great. Economic stimulus packages are seeing fresh funding with the infrastructure bill in the United States and similar infrastructure investments in other economies… but why is progress so painfully slow? More-so how do we push the accelerator and take hold of this opportunity?
Here's the opportunity
Right now there’s an expanding gap between what is being delivered and what is actually needed for roading and transit infrastructure in the US.
The same picture is playing out across developed countries - we have now reached the point where there is more work to be done in the next decade than can be achieved, no matter how much we spend.
It’s simply not possible to complete that many projects within the status quo.
If we 'take a look under the hood' we see the following storm brewing:
The United States relies heavily on road use, even within the post-COVID urban trends of micro-mobility and carbon reduction.
There is a large number of roads per capita and comparatively low levels of public transit use (Source: data.oecd.org and World Bank)
43% of all roads are in poor or mediocre condition - a statistic that will get worse without additional investment.
McKinsey identifies less than three per cent of projects are completed on time and in budget, largely due to historical inefficiencies that have too long impacted the way construction outfits work.
This is estimated to cost each motorist over $1,000 per year in wasted time and fuel.
By 2039, the overdue infrastructure will cost the average American household $3,300 a year...that's 10 Trillion in GDP
$786bn is required to address the infrastructure shortfall for roads and bridges in the US.
But the problems to be solved are not insurmountable.
This is such an important opportunity to make huge leaps in productivity, efficiency and the social impact of smart infrastructure planning and delivery. In fact, McKinsey have articulated this gain as the ability to achieve 60 per cent more infrastructure through the adoption of technology and best practice in the Construction industry.
This isn't pie-in-the-sky thinking. This is simply the benefit we will see when the construction sector undergoes the transition seen in industries like manufacturing
A U-turn for one of the least digitalised industries in the world
One of the causes of flat productivity has been the slow adoption of technology. Construction is one of the least digitised industries with only Agriculture and Hunting coming in below it in a review by McKinsey.
The sector can be said to be booming, with the largest increase in funding since the interstate network in the 50’s. President Biden's $1 Trillion USD infrastructure bill has passed, providing significant stimulus funding and growth for the sector, with an intention to repair a backlog in transport systems, modernise existing infrastructure and support the transition to a clean economy. But there is pressure to mobilise quickly.
This is an industry ripe for technology disruption.
A Techcrunch article articulated this well "Too many of the key processes involved in managing multimillion-dollar construction projects are carried out on Excel or even with pen and paper. The lack of tech sophistication on construction sites materially contributes to job delays, missed budgets and increased job site safety risk. Technology startups are emerging to help solve these problems".
Bringing together the themes of under-investment in aging infrastructure, rapidly increasing demand for improved public transit (in particular, which involves ripping up busy roads), an increasingly congested, complex and unpredictable roading network with limited digitisation… it starts to make sense why many developed countries are in their current situations. A literal gridlock, that has been unable to put the accelerator on productivity and efficiency opportunities.
Last year we worked with the Nasdaq Entrepreneurial Centre to test our thinking about how Mooven can solve these challenges at scale and why the US market is pivotal to our wider ambitions.
This year we are here in the United States, seeking to make a real impact on the efficiencies and productivity of the industry. Read more about Mooven's opportunity in the United States here in the American Journal of Transportation.
Mooven is a construction technology platform bringing the right data and contextual awareness closer to decision-makers, enabling them to accelerate the speed at which infrastructure projects are completed while minimising disruption to local communities.
The contextual insights illustrate the impact on the transport network caused by such works, such as traffic congestion or noise pollution, and enable delivery teams to plan smarter and adjust when needed.
If you are interested in collaborating on these important topics, reach out to me and read more about Mooven here.
CEO and Co-founder, Mooven
2021 Reportcard for Americas Infrastructure; America Society of Civil Engineers: https://infrastructurereportcard.org/cat-item/roads-infrastructure/
Bipartisan Infrastructure Law (Infrastructure Investment and Jobs Act): https://www.whitehouse.gov/bipartisan-infrastructure-law/
Construction Tech Startups are Poised to Shakeup a 13Trillion dollar industry; Techcrunch: https://techcrunch.com/2020/11/17/construction-tech-startups-are-poised-to-shake-up-a-1-3-trillion-dollar-industry/?guccounter=1
It’s Time for States to Invest in Infrastructure; Centre on Policy and Budget Priorities; https://www.cbpp.org/research/state-budget-and-tax/its-time-for-states-to-invest-in-infrastructure
Infrastructure productivity: How to save $1 trillion a year; McKinsey Global Institute McKinsey Infrastructure Practice https://www.mckinsey.com/~/media/mckinsey/business%20functions/operations/our%20insights/infrastructure%20productivity/mgi%20infrastructure_full%20report_jan%202013.pdf
Imagining Constructions Digital Future; McKinsey: https://www.mckinsey.com/business-functions/operations/our-insights/imagining-constructions-digital-future
Last year I worked with the Nasdaq Entrepreneurial Centre to test our thinking about how Mooven can solve these challenges at scale and why the US market is pivotal to our wider ambitions. Read more about this thinking here - https://www.mooven.com/blog/mooven-to-the-us
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