Introduction

The rapid evolution of digital technology over the past few years has altered how people work in many sectors. "Disruptive technology" has significantly changed traditional practices. Although the word “digitalisation” sounds hardly intuitive in the context of a sector like construction, the shift to digitalisation has been increasingly demanded. The pressure to digitally transform the construction sector has intensified-due to the increasing complexity of construction projects, which necessitates higher safety standards and creative solutions to boost productivity and efficiency

The impact of the COVID-19 pandemic has accelerated digital transformation at an unprecedented rate, with 80% of respondents in a McKinsey Global Survey on businesses stating their commitment towards digital transformation. However, sustaining the digital transformation process for the coming years will become challenging as the push factors motivating people to embrace digital transformation during the pandemic may not be as strong in the post-pandemic era. In addition, the steep learning curve associated with implementing new technologies and digital tools may cause resistance or reluctance to embrace the required changes.

On one hand, the COVID-19 pandemic has taught us that the decision to adopt and implement technology was influenced by a every particular social situation namely a global health and economic crisis, highlighting the need to understand society’s unique concern areas first before adopting technology at the scale we have seen. On the other hand, it is also critical for businesses to recognise the long-term benefits of technology implementation and continue to adapt to stay competitive in the digital age. Therefore, ensuring that any digital transformation adds potential value to society and business sectors is crucial.

As such, this article aims to firstly highlight the factors that will shape the future of the construction industry, with a focus on human-centred and ESG-driven approaches. Next, it will include five essential technologies that are spearheading the industry's agenda for digital transformation. Finally, it seeks to educate stakeholders on the steps necessary to effectively transition the sector to its new, digitally-enabled future.

The case for a digital transformation

The construction sector encompasses multiple disciplines and activities in designing, constructing, and managing built environments, including buildings and infrastructure. With resilient and smart cities at the forefront of city and urban planners’ agenda, the desire for more sustainable and more efficient buildings and infrastructure in rapidly urbanising areas will necessitate incorporating emerging technologies into construction projects. In addition, the recent push to provide affordable housing, social services, transportation, energy, building or facilities, and other infrastructure projects is likely to raise demand for innovative and cost-effective construction practices. The construction sector can contribute to a more equitable and sustainable outcome by implementing appropriate technology to address societal issues such as rising costs, inadequate housing conditions, livelihood, climate and disaster risk, and other sustainability issues.

From an economic perspective, the construction sector contributes significantly to the nation’s wealth creation and economic growth through its two-time multiplier effect on 120 other sectors that rely on construction for progress and sustainability. The Global Financial Crisis of 2008-2009 revealed that many countries rely on construction spending to stimulate the economy and create jobs. The construction sector represents a unique form of stimulus due to its high and wide-ranging multiplier effect, generating significant economic spillovers through job creations. However, future investments in building and infrastructure projects will face challenges from the need to consider green and sustainable approaches, apart from digitalisation. Therefore, the future of the construction sector will require a significant shift towards more sustainable practices, which can be driven and assisted by digitalisation.

Despite being crucial to the country's economic and physical development, the construction industry has been identified as a laggard in terms of speed of adoption of innovation or technology, compared to other sectors. Hence, it is imperative that the construction industry accelerates its adoption of technology in order to maintain its competitiveness and enhance quality, productivity, and efficiency. Several Malaysian construction companies and firms (e.g., architecture and engineering firms) that have adopted technology have penetrated the international market and expanded their global reach. This demonstrates how adopting technology allows local players to diversify their businesses and enter larger markets. New global construction market opportunities will only be accessible to industry players who are ready to adopt technology and innovative solutions to overcome key future risks, such as extreme weather events, infectious diseases, an ageing population, limited resources, and urbanisation, among the top threats. Moreover, the urgent need to better equip construction players to meet Environmental, Social, and Governance (ESG) commitments will significantly impact their ability to compete in the global market for capital. Failing to comply with ESG requirements may result in missed opportunities for financing support. In addition, effective use of ESG data could be pivotal to drive business value for construction firms and provide insights into decision-making in achieving net zero.