Innovation and Disruption...
Context
The architecture, engineering and construction industry (AEC) has seen major technological disruption over the past two decades.
Yet all this disruption hasn’t much moved the needle in the industry and hasn’t caused the system change we have seen in other industries.
The introduction of building information modelling in the early 2000s changed the face of the industry in a similar way to how CAD platforms changed the industry in the decades prior.
The original 2D CAD platforms had the advantage of efficiency over hand drawing plans.
Now we have BIM platforms whose advantage over 2D platforms is data and information.
With all these disruptions, we still use the same project workflow and still produce the same set of 2D drawings.
Albeit more efficiently.
We still use the same fee structures and business models.
The output of our product, our business model, hasn’t changed.
In this article, I want to look at some other industries and see if there are any trends we can look to for guidance on where the AEC industry could move.
Examples
On the 31st of October 2008, pseudonymous creator, Satoshi Nakamoto released the Bitcoin white paper outlining a decentralised peer to peer finance system.
Then on 3rd of January 2009 Bitcoin’s ‘Genesis Block’ was first mined.
Little did people realise at the time, that this new technology would not only revolutionise the world finance systems but also create a 3 trillion-dollar industry out of nothing, in a matter of 15 years, that completely removed the need for institutions like banks and the Federal Reserve.
People are now able to exchange wealth with anyone in the world without any third part intervention.
Before Bitcoin, in 2007, Netflix completely ended the video rental market by moving their content online and allowing people to stream anywhere, anytime.
But was that Netflix’s biggest disruption? Or was the true disruption the monthly subscription business model that completely ended companies like Blockbuster?
Since 2007, there have been many more examples of major disruption to old systems in almost every industry.
In 2009 Uber was developed by Travis Kalanick and Garrett Camp in San Francisco and went on to completely change the worldwide taxi industry by decentralising who can drive and take fares.
Created in 2010, Airbnb disrupted the temporary accommodation market, in a similar fashion to Uber and the taxi industry, by providing the digital infrastructure to anyone who had a spare room to rent.
Consumers no longer had to go to a centralised accommodation chain to book a room.
In more recent times, especially highlighted by the 2024 US Presidential elections, mainstream media’s monopoly on information and news seems to have diminished and been replaced by social media apps like YouTube, Facebook, and X.
Giving rise to citizen journalists and powerful independent journalists that are no longer shackled by editors and managerial teams dictating what they publish and what they don’t.
All these examples have two core disruptions in common.
They all have pushed the core functionality of their domain onto the internet.
And they have all completely changed the business models of their field of expertise by removing the ‘middleman’ in transactions.
They have all looked outside the box and challenged the existing business models and the idea of ‘this is how it’s always been done’.
A trope I hear all too frequently in architecture.
So, the questions are.
Where are the major inefficiencies and areas that need disruption?
Which, if any, technology or technologies will have this level of impact on our industry?
Let’s first look at areas where inefficiencies exist.
What can be disrupted?
I would say within the front-end design of a building, the biggest inefficiency is creating a data rich 3D model and then having to create a very bloated 2D drawing package.
I understand this is mostly done for legal reasons, so is there a technology that could disrupt construction law?
Blockchain and smart contracts could be one such technology.
Imagine a smart contract that automatically triggers payment when a specific construction milestone is reached, reducing the need for lawyers, manual tracking, and payment delays.
With companies like Arcartera developing tools to facilitate smart contracts that automate and enforce agreements between stakeholders.
The inefficient legal framework that has traditionally shaped the industry may have to make way for a more efficient system.
These smart contracts will eliminate the need for intermediaries, reducing costs, increasing efficiency and minimising the risk of disputes as per their white paper which you can read at arcartera.com/whitepaper.
While blockchain has the potential to disrupt the legal side of construction, another massive shift will occur when robotics and AI come into play, fundamentally changing the way construction projects are executed.
There is incentive for contractors to replace the high cost of workers with robots.
If you have been paying attention to Tesla's self-driving cars and the development of Boston Dynamics robots, then you know this is going to happen rapidly.
This is when the death of 2D documentation will occur.
As robots begin to interpret 3D data directly, the need for 2D documentation will vanish altogether.
Rather than relying on traditional paper plans or PDFs, the digital model will become the key to both construction and operation - enabling seamless execution without the intermediary step of translating data into 2D drawings.
At this point, Arcartera's BIM integration and supply chain management systems start to make sense.
Everything can be automated directly from the model.
As blockchain disrupts facility management and real estate, could architects take on these evolving roles given their deep knowledge of the building?
When you think about it, who better to manage a facility than the architect who produced it?
Architects know the building intimately, have produced and stored all the data and have all the relationships with suppliers and contractors.
I see this as an area of potential growth for architects as automation and AI start to remove traditional roles from the industry.
Architects are going to have to rethink their roles and where they can provide value to clients.
They will need to change their business model, remove the middlemen and put their business model online.
One such way an architect could change their business model is moving from a fee-based service to a monthly subscription type payment for managing the facility from concept to operations.
To me, this makes sense.
The architect could use their role to gather data from the facility to inform future developments and optimise outcomes for the client.
Using such data could yield higher rents or increased foot traffic for clients, making their facilities more valuable.
This feedback loop would involve architects gathering real-time data from the building—such as occupancy rates, energy efficiency, or tenant satisfaction—to inform future projects and optimise building performance for clients, increasing both value and operational efficiency.
Conclusion
A disruption in the AEC industry like we have seen with the examples I explored at the beginning of this article likely won’t happen until robotics can catch up with AI and manual labour is removed from the job site.
While more conservative members of the industry may be slow to adopt new technologies, as they have been with BIM, and the inevitable push back from labour unions over the replacement of the workforce, this disruption will happen faster than people realise.
Architects need to plan ahead to capitalise on these disruptions and avoid being sidelined as the industry evolves.
We need to take inspiration from one of the most famous disruptors in history.
"Be ready to revise any system, scrap any method, abandon any theory, if the success of the job requires it.” - Henry Ford