UK: Is The Legal Landscape Ready For The Digitisation Of The Construction Industry?

Last Updated: 12 September 2017
Article by Richard Green and Sarah Rock

The opening line of Balfour Beatty's Innovation 2050's executive summary sets the tone for the rest of the horizon scanning report (A Digital Future for the Infrastructure Industry) - 'The construction site of 2050 will be human-free'. This statement, which evokes visions from scenes of a world run by machines popular in science fiction movies of the 1980s, kicks off a report that recognises that the construction industry is on the precipice of the next industrial revolution.

Digitisation of construction has in fact already begun: Building Information Modelling (BIM) is becoming more commonplace throughout the industry; the skills gap in construction has diversified from shortage of manual workers to now include a need for trained drone pilots; and robots are being piloted for manual, repetitive or dangerous on-site tasks.

Innovation 2050 looks at the developments so far and makes ten predictions about where the industry will find itself by the year 2050. The report provides suggestions of the procurement routes and methods of construction which will need to be contracted for as we move into the digitisation of the industry. We review the report's predictions below.

1. The industry will become increasingly focused on innovation and both contractors and customers will become less risk-averse

The report suggests that as more innovative solutions become possible, acceptance of risk will follow. Trialling untested procedures is of itself a risk, acknowledged by the report, but in order to stay one step ahead of their competition, construction companies are now finding themselves needing to be creative and take risks on new solutions. The construction industry has traditionally revolved around risk transfer and indeed contract negotiations are almost entirely focused on this transfer, setting the tone for projects and the mind-set of its participants.

The report does not go as far as to suggest that this common place 'risk averse' attitude will be lost entirely. The risk conscious culture in place at the moment will be challenged as the next generation of designers, contractors and clients, who were born into the digitally collaborative world of Facebook and Minecraft, take up positions in the construction industry.

2. The shape and offer of the infrastructure industry will change significantly, with new business models, products and services

Innovation 2050 suggests that new business models, such as those introduced by Uber and Airbnb which have disrupted their own industries, could well occur in construction. Disrupters shake up industries and challenge the status quo. In our increasingly digital online world, they have the opportunity to do this at a much faster rate than ever before. Large organisations with standardised, rigid practices may well struggle to adapt to the changes ahead. The ability of large corporations to be flexible and adapt to change is a particularly interesting issue in light of the report's comment that some of the problems lying ahead have not occurred or even been imagined yet.

3. Infrastructure will move on from concrete and steel to include new materials which respond to their surroundings

As technology evolves, so will the materials which lie at the heart of the construction industry. The Internet of Things is fast changing the world in which we currently live. Smart cities, which use the Internet of Things to integrate and manage a city's assets, will become more prevalent over the next few years. So why not smart materials? Buildings that are connected to other buildings and to the infrastructure around them will require more interface points so, as the report suggests, surfaces have a part to play in this. Testing and standards of materials must not be forgotten in the exciting race toward the future, however.

4. New jobs and industries will be created - and some will disappear, especially low or zero skill roles and those relying on repetition of tasks

As Balfour Beatty acknowledge, new jobs which were not even imagined 20 years ago are now a reality and there is already a shortage of skilled operatives to perform them. Innovation 2050 suggests that 65% of school children today will work in jobs which do not yet exist and acknowledges that this will result in a skills gap in the short to medium term. With the construction industry entering its digital revolution, it is now competing with technology companies for the best talent. In order to attract the best talent, the industry needs to sharpen its image and show potential recruits that it is dynamic, progressive and inclusive.

5. Thinking only about design and construction will become an outdated concept as infrastructure becomes multi-functional

As design and construction becomes smarter, managing built assets will be driven by technology and intelligent ways of working. Already falling into history are the days of rooms full of operation and maintenance manuals and files full of hard copy drawings through which a facilities team member would have to pore to locate a piece of information. BIM has the potential to fully revolutionise the facilities management industry. Adding information to 3D models and allowing for virtual walk-throughs of buildings to locate and manage faults will make this industry smarter, faster and more receptive to end users' needs.

From a legal perspective, it will be interesting to see how traditional procurement routes will fit with the concept of multi-functional projects. The facilities management industry has identified a 'BIM gap' in their commonly used contracts. In the near future there may well be an increased use of contract forms such as the NEC4 Design, Build and Operate. Looking further ahead, BIM Level 3 seems unlikely to fit with any of our current procurement routes, and perhaps its highly collaborative nature will require a new tailor-made procurement route.

6. Robots will become more prevalent in construction

As Balfour Beatty acknowledge, robotics is a fast moving area of our industry with huge potential but with costs which are currently prohibitive. As with all new technology, costs will eventually fall as the processes and materials become more commonplace and accessible. The report presents a controversial image of the future by suggesting that decision making will move away from humans as the industry becomes driven by better data and predictive analytics. An industry controlled by algorithms and machines has the potential to provide efficiencies, but it is difficult to envisage design and aesthetics ever being generated by machines. Monotonous or dangerous tasks may well be taken over by machines but a world entirely driven by machines seems a remote prospect, even if human traits could become programmable.

7. Construction will get faster, using 3D and 4D printing, and self-transforming objects which self-assemble

3D printing of houses is happening now in China, and only last year Dubai opened the world's first 3D printed office. It is premature to be able to fully analyse this additive manufacturing process as a new construction technique because the longevity of such buildings is yet to be tested. Self-transforming objects are stated in the report to be undergoing research at the Massachusetts Institute of Technology (MIT). Such ground breaking technology has the potential to give power to users to alter buildings to suit their own needs. The example given of temporary repairs for bridges in an emergency situation carries obvious benefits. This is an area where new jobs not currently in existence could really come to the fore.

8. New, disruptive ideas will emerge, for making mass transit faster, safer and less damaging to the environment

Hyperloop is referenced as a new method of transportation which uses electric propulsion and levitation to send pods from one city to another. This futuristic sounding transportation method may well be in place within a decade but, as with the increased use of drones, the infrastructure around it will most likely be playing catch up.

A UK Government response to a consultation paper around use of drones was issued by the Department for Transport on 22 July 2017. The response introduces two measures to increase accountability of drone users. Firstly, users of drones of 250g and above will be required to register themselves and their drone and secondly, mandatory competency testing is to be introduced for leisure users (commercial drone users already have required standards to meet). Further measures outlined as still being explored include updating the Air Navigation Order 2016 to reflect incoming European drone regulations and the possible banning of the use of drones within the proximity of airports.

Whilst the response is a welcome step in the right direction, as one can currently purchase and pilot a drone at will, there are not yet adequate laws and regulations in place to govern the use of this technology. Anyone who was caught up in the chaos caused by a drone flying close to Gatwick airport recently (leading to a runway being closed and five flights being diverted) would probably suggest that the law needs to catch up with the technology available for use in practice.

9. We will increasingly use wearable technology such as exoskeletons

Balfour Beatty suggests that the industry will become known as number one for those putting health and wellbeing as their top priority, predominantly through the use of wearable tech. The use of advanced clothing to carry out tests and monitor workers' health brings with it concerns around data protection and privacy. The General Data Protection Regulation (GDPR), which gives more control to individuals over the use of their personal data, comes into force next year and will impact upon this area. The debate around privacy versus the benefits of data gathering is recognised and discussed in the report and it seems this will be one contentious area to be manoeuvred if the futuristic construction sites detailed in the report are to be fully achieved.

10. Direct neural control over devices and vehicles will be accessible to the industry

In perhaps the most futuristic prediction, Balfour Beatty propose that the use of implantable microchips or 'digital people' will be able to control 'hands free' robots using the power of their mind. Whilst the Star Wars fans amongst us may find this incredibly exciting, the potential for hacking and other security issues suggest that this final prediction may be a prediction too far, at least for the mind-set of the current workforce. Liability for the robot's actions would need to be very carefully thought through, the potential for a slip of the mind or, in fact, a conscious thought process and the resultant actions raise obvious concerns.

What next for the construction industry?

Innovation 2050 is in itself one of the most innovative and thought provoking reports to hit the construction industry for a while. In making its ten predictions, the writers challenge the status quo of our industry and provoke thought around disruptive technology, business models and practices. The report recognises the issues which may follow such as increased energy demands, cyber security and privacy - all of which need to be considered now.

Within the legal context, the technological advances happening in the construction industry are already light years ahead of the legislation, regulations, contracts and governance which will be needed. Key stakeholders will no doubt consider Innovation 2050 in detail and start thinking now about how our existing structures, contracts and rules need to adapt to the inevitable digital revolution articulately envisaged in Balfour Beatty's report.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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