Future disruption and the race to collective intelligence
By David BowcottRisk Management mega trends risk risk management
If ever there were an industry ripe for disruption, it is construction. Mega-trends like globalization, asset management, and new technology are beginning to turn this long unchanged industry inside out. So, how do industry players stay on the winning side of future disruptions?
To avoid being run over by change, industry players need to identify what the disruption will be, and ultimately how to become an early adopter. Thus knowledge becomes gold in the future construction economy (in truth it has always been gold, but it will be the primary fuel of success in the future).
If knowledge is the key defense against being disrupted, who in the construction economy is best positioned to collect knowledge?
Going down that path, perhaps there is no better proxy measure for knowledge collection than a company’s annual turnover. The revenue a company books each year is its clearest measure of experience and knowledge. Who has the most knowledge within the global construction economy? On that front, I’ve decided to use the revenue from the top 280 global contractors as foundational data set to determine who has the best knowledge foundation.
The following is a pie chart that displays those countries with the largest annual revenue base (to produce this chart I’ve taken the revenue from the top 10 contractors in each of the top construction economies as a proxy measure of a country’s knowledge footprint):
China has a massive revenue footprint, and thus one could draw the conclusion that they have a massive knowledge footprint. Now, this chart gets even more conclusive if you consider that China’s entire construction supply chain, reports up to a single leadership group. Given this fact, we should consider the Chinese revenue base as a single construction entity that has the full capability to capture knowledge and share knowledge throughout not only its top 10 construction contractors, but its entire construction economy. None of the other countries referenced above has this unique attribute. Each of the other countries referenced do not have a system/structure in place to share knowledge (potential exception is Japan with its collective capitalism model). Given the fact that the other countries cannot, or do not, share their knowledge (for the most part) the pie chart below needs to be re-designed if we are looking to get a picture of true knowledge footprint via company annual revenues. In the following pie chart I’ve taken the revenue from just the top contractor from each country and compared it to China and its collective revenue/knowledge base:
The collective revenue of China is astoundingly large when compared to the revenue of the top contractor in each of the other top construction economies. Further, if we agree that revenue base is a strong proxy for knowledge, then one can see China, with its massive construction spends and its unique governmental structure, is poised to capture significant knowledge in comparison to the world’s largest construction contracting companies. Thus, one can draw the conclusion, as we sit poised on the brink of substantial disruption to our industry, that China is ideally positioned to take full advantage of the changes being driven through globalization, asset management and technology trends.
If you agree there is change coming and you agree with the above knowledge assessment of the global construction economy, then you should be reformulating your future strategies . The question, you should be asking yourself is: “How do I rethink the way I do business in order to ensure my company has maximum access to the collective intelligence of the construction industry globally?” There are several potential answers to this question, and some could provide you with the strategic position you will need to survive the future disruptions this industry will face.
David Bowcott is Global Director – Growth, Innovation & Insight, Global Construction and Infrastructure Group at Aon Risk Solutions. Please send comments to email@example.com.