Digitisation matters in Singapore's construction sector

DIGITAL technology is unlocking big productivity gains in many sectors, but one has lagged well behind: construction. Construction is the second least digitised industry, according to the McKinsey Global Institute, well behind other labour- and equipment-intense industries like utilities and mining.

The gap isn't just a matter of sectoral pride. Construction activity constitutes 14 per cent of global GDP. In Singapore alone, the Building and Construction Authority projects that construction spending this year will total S$27 billion to S$32 billion. The public sector could account for two-thirds of that spending. Now consider that large construction projects typically overshoot their schedules by 20 per cent and their budgets by 80 per cent. Taxpayers and shareholders deserve better.

Streamlining construction projects has long been challenging, in part because the industry spends a smaller share of its revenues on R&D and information technology than most other sectors. But findings by McKinsey's Singapore Productivity Sciences Center point to a number of transformational ideas for the industry, all derived from innovations that are now being deployed or prototyped.