The future of construction is digital
The architecture, engineering and construction sector, which has a current market value of US$9.7tn globally according to Oxford Economics has exhibited a comparatively sluggish pace in terms of digital transformation and innovation compared to other industries. Currently, the sector is experiencing an expedited surge in digital adoption due to a high demand for infrastructure, a scarcity of trained labour, heightened stakeholder expectations for data transparency and integration and a need to speed up construction timelines.
Digital transformation involves the integration of digital technologies, strategies and methodologies across an organisation or industry. It encompasses the adoption of automation, data-driven decision-making, cloud computing, artificial intelligence (AI) and other digital solutions to improve efficiency, agility, innovation and user/client experiences.
“Digital transformation is needed in construction. It is all to do with improving productivity, communication, certainty, quality and collaborating with clients and the supply chain.”
Chief Technology Officer Tier 1 contractor
Our survey results indicate that the Middle East construction industry is integrating digital technologies, with over 60 percent of respondents having a digital strategy. Gulf Corporation Council (GCC) countries are investing in digital initiatives, such as Saudi Arabia’s Vision 2030 and UAE’s Digital Government Strategy 2025. Enterprises have started using innovative technologies to overcome challenges in the industry.
Survey findings
of respondents said they were very familiar with the concept of digital transformation, 42.5 percent said they were somewhat familiar and 12.5 percent were unfamiliar with the concept.
of respondents said their organisation had a digital strategy (this included 85 percent of respondents working for contractors and 80 percent of respondents from developers).
of respondents agreed that digital transformation is essential for the future growth of the construction industry in the Middle East. A further 57 percent of respondents strongly agreed this to be the case.
Digitalisation and sustainability
Sustainability technology encompasses various tools and approaches specifically aimed at minimising environmental impact, preserving resources and encouraging eco-friendly practices. In the realm of construction, this involves implementing methods such as using green building materials, adopting renewable energy solutions, incorporating energy-efficient systems and implementing waste reduction strategies. Sustainable construction practices are being further developed by various technologies such as solar panels, geothermal heating and cooling systems and rainwater harvesting.
According to Strategy& Middle East, the region has a unique US$2tn opportunity to pioneer sustainable construction. The global consulting business also estimates that adopting a sustainable approach to the built environment could reduce life-cycle greenhouse gas emissions for urban development by about 50 percent. This would take the region halfway towards meeting the goal of achieving net-zero emissions in the next 25-40 years.
Contractor’s Green Construction Capability is key to achieving a project’s overarching green construction goals
Contractor’s Green Construction Capability (CGCC) is the capability of the contractor to successfully carry out green construction activities. It is key to ensuring that green construction activities are carried out smoothly, maximising resource conservation and minimising environmental burden.
Contractors have a social responsibility to deploy sustainable business practices that ensure the completion of highly efficient projects, minimising carbon footprint while adhering to safety standards. They are amongst the main implementers of green construction.
MDPI’s 2023 report discusses how CGCC directly affects the achievement of a project’s overarching green construction goals. Recent studies have also shown there to be substantial evidence that the realisation of green construction requires excellent CGCC, along with policy incentives, developer adoption and a mature supply chain. Below are a few examples of CGCC in the region:
- In October 2023 Khansaheb became the first contractor in the Middle East to leverage a battery energy storage system (BESS) for their large construction equipment.
- Alec has implemented annual ESG reporting and aligns this with multiple reporting standard mechanisms. They have also outlined a formal ESG framework and decarbonisation strategy.
The rise of smart cities
Sustainable city development is a practical resolution to mitigate the environmental and socio-economic consequences that urbanisation imposes on our planet. They centre around building urban landscapes that prioritise sustainability, advanced mobility solutions, digital connectivity and safety. This involves using environmentally friendly materials, implementing efficient transportation systems, establishing strong digital infrastructure and integrating state-of-the-art security measures.
“In response to ongoing population expansion and the increasing demands of their inhabitants for higher quality of life, we are seeing the most populous cities in the region, including Riyadh, Dubai and Abu Dhabi, undergoing rapid modernisation initiatives. Intelligent technologies and interlinked infrastructure will be indispensable in the future cities of the GCC.”
Georgina Bishop
Associate Director, UAE and Digital Transformation Lead, Middle East
Smart city developments in the Middle East
According to HSBC's latest insights report, it is projected that 70% of the world's population will live in cities by 2050. This presents a prime chance to cultivate eco-friendly and efficient cities for tomorrow, constructing resilient and sustainable urban infrastructure and services.
The Smart City Journal, estimates that the smart cities market could reach US$873.7bn by 2026, almost doubling from the recorded value of US$457bn in 2021, with a compound annual growth rate (CAGR) of 13.8 percent.
Smart city initiatives
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