In Manama, 5G and edge: unlocking new possibilities could have been perceived by all elites of the Gulf media as a reassuring means to help reach landscapes of a better future.
With 5G we’ll see an entirely new range of applications enabled by low latency of 5G and the proliferation of edge computing – transforming the art of the possible, said professional services firm Accenture in a new report.
“5G standards have been finalized late last year. We’ll soon start to see a growing number of devices rolling out across the regions. By 2025, it’s estimated that there will be 1.2 billion 5G connections covering 34% of the global population,” said Tejas Rao, Managing Director – Technology Strategy & Advisory, Growth Markets at Accenture in the company’s Business Functions Blog.
From digital to augmented consumer
The evolution of the consumer is one major leap forward. 3G and 4G helped to create the digital consumer, always connected to the internet through their mobile devices. But with 5G we’ll see an entirely new range of applications enabled by the low latency of 5G and the proliferation of edge computing – transforming the art of the possible. Rather than simply experiencing digital through their devices, consumers will have their experience of the world around them enhanced and augmented through real time data and the technologies such as augmented reality/virtual reality (AR/VR) that it enables through edge computing.
The edge cloud forms
The evolution of the network in this context is synonymous with the evolution of the cloud. So rather than what we typically see today in the public cloud, which is services residing in centralized data centers, those cloud services will move to the edge of a mobile network – the ’edge cloud’ – to drive real time cloud computing capabilities. And that development will support a wide range of new use cases across every industry, with network connectivity itself becoming the platform on which others can build new services and solutions.
From capacity and coverage to network as a platform
Accordingly, we are starting to see the strategic intent of maximizing capacity and coverage that informed network build in the 3G/4G world shift. Instead the focus is now on how to unlock 5G to deliver innovative solutions and services.
With networks no longer having to be the same everywhere, they can be built or sliced to support new use cases and opportunities for specific industries. Today’s web platform companies are already exploring this and making investments in order to capitalize on the transformational changes that 5G’s low latency can offer.
Low latency–currency for the 5G world
Ultra-reliable low latency is the new currency of the network world, underpinning new capabilities in many industries that were previously impossible. And these are not in the realm of science fiction. They are becoming possible today, ranging from real-time language translation to remote robotics and from autonomous logistics to AR-enabled industrial maintenance.
As they plan their future networks, operators need to understand how to intelligently direct 5G network investments from just pure coverage and capacity, and towards unlocking new revenue streams and business value. This is a significant departure from previous generations of network deployment. The network has moved from being a pipeline to instead becoming a platform and gateway for solution innovation and real-time connectivity services.
Partnering and collaboration will become more important than ever as operators sit at the center of new ecosystems developed around the ultra-reliable low latency, real time data at scale and responsiveness that the ‘edge cloud’ delivers.
New landscape of opportunity–and challenge
This emerging landscape of mobile edge networks can unlock many new opportunities to create value. These consist of new services to drive revenue and new possibilities for managing network costs. But the new networks also pose some novel challenges to preserving margins.
Today’s cloud world is characterized by the presence of a limited number of mega data centers in remote locations with data travelling from device to cloud and back again in order to execute a computational process or data analysis. Data typically makes the round trip travelling at 50 to 100 milliseconds over today’s 4G mobile networks.
Data travelling over 5G at less than five milliseconds facilitates the edge cloud and the ability to create new services that it empowers. But achieving that requires a proliferation of micro data centers numbering in the tens of thousands. To support edge capabilities, these will need to be deployed closer to the consumers and enterprises that use them and densely installed in urban settings.
They will need to handle the progression from millions to billions of connected devices. And move from remote connectivity to providing ultra-reliable, low-latency capabilities at the edge as data flows accelerate to real-time in order to execute time-sensitive services, from autonomous vehicles to real-time visual analytics.
Deciding where and how to play
As they create these capabilities, operators need to understand where they want to locate the edge and what the operational implications of their choice will be. That means understanding the likely demands of the territories they cover and the use cases for specific industries that are likely to be most relevant.
The one-size-fits-all approach of the 3G/4G world is no longer useful. Instead, operators need to take a more targeted view of where they want to play and the likely returns they can generate from placing much more specific bets than in the past.
Randy Rivera, Executive Director of FinTEx, a member-led community focused on promoting innovation and collaboration within Fintech in Qatar and the MENA region, has said that his organization continues to work with international financial services industry participants.
During a June 23, 2020 virtual panel discussion (hosted by the US-Qatar Business Council) on “Qatar’s Growing Fintech Sector & Business Opportunities,” Rivera stated:
“We [aim to] … match talent with opportunity and what is going on in Qatar fits as an attractive platform not just for the Fintechs involved but for the Qatari market and the Middle East overall.”
“The design of these programs reflects thoughtfulness, broad participation and commitment of the right mix of leaders who can affect change and attract the talent to make that change uniquely impactful, not just to the market, but to the regional fintech community as well.”
Qatar is now a major financial hub in the Middle East. The country’s human development index (HDI) value is around 0.85, which puts it in the “very high” human development (and quality of life) category.
Qatar is ranked at 41 out of 189 countries and territories. Its HDI value has increased from around 0.75 to 0.85 in the past two decades – which indicates that the living standards of its residents may have improved significantly due to its booming economy.
As mentioned in a release shared with CI, Qatar aims to further support and develop a strong business community and a competitive environment that will help local SMEs while also attracting foreign SMEs.
The release revealed:
“Qatar has advanced 18 spots in the national level of entrepreneurial activity, securing the 15th rank globally and the 2nd in the MENA region for the Total Early-Stage Entrepreneurial Activity (TEA) index, according to the Global Entrepreneurship Monitor (GEM) Report 2019/2020.”
Amy Nauiokas, founder and CEO at Anthemis, a VC investment platform with over 100 portfolio firms, believes Qatar provides “a promising environment and set of opportunities for Fintech growth.”
Nauiokas, whose company supports an ecosystem of over 10,000 investors, incumbents, and high-potential Fintech firms, globally, stated:
“We look forward to solidifying some key relationships in Qatar as Anthemis further builds our MENA strategy.”
Mohammed Barakat, MD of US Qatar Business Council, who also attended the webinar, said:
“Considering Qatar’s large payment processing and remittance market and its strategy to become a regional gateway for a huge market, I foresee rapid growth in Qatar’s FinTech sector.”
The US-Qatar Business Council aims to support trade and investment between the two nations and to also build strategic business relationships.
As noted in the release, there are over 120 wholly-owned US firms operating in Qatar, and over 700 U.S.-Qatar joint projects currently active in the Middle Eastern nation.
As reported recently, the Qatar Financial Center will launch “Fintech Circle,” a co-workspace for qualifying financial technology firms free of charge for a year.
We asked our 2020 intake of Technology Pioneers for their views on how technology will change the world in the next five years.
From quantum computers and 5G in action to managing cancer chronically, here are their predictions for our near-term future.
1. AI-optimized manufacturing
Paper and pencil tracking, luck, significant global travel and opaque supply chains are part of today’s status quo, resulting in large amounts of wasted energy, materials and time. Accelerated in part by the long-term shutdown of international and regional travel by COVID-19, companies that design and build products will rapidly adopt cloud-based technologies to aggregate, intelligently transform, and contextually present product and process data from manufacturing lines throughout their supply chains. By 2025, this ubiquitous stream of data and the intelligent algorithms crunching it will enable manufacturing lines to continuously optimize towards higher levels of output and product quality – reducing overall waste in manufacturing by up to 50%. As a result, we will enjoy higher quality products, produced faster, at lower cost to our pocketbooks and the environment.
In 2025, carbon footprints will be viewed as socially unacceptable, much like drink driving is today. The COVID-19 pandemic will have focused the public’s attention on the need to take action to deal with threats to our way of life, our health and our future. Public attention will drive government policy and behavioural changes, with carbon footprints becoming a subject of worldwide scrutiny. Individuals, companies and countries will seek the quickest and most affordable ways to achieve net-zero – the elimination of their carbon footprint. The creation of a sustainable, net-zero future will be built through a far-reaching energy transformation that significantly reduces the world’s carbon emissions, and through the emergence of a massive carbon management industry that captures, utilizes and eliminates carbon dioxide. We’ll see a diversity of new technologies aimed at both reducing and removing the world’s emissions – unleashing a wave of innovation to compare with the industrial and digital Revolutions of the past.
By 2025, quantum computing will have outgrown its infancy, and a first generation of commercial devices will be able tackle meaningful, real-world problems. One major application of this new kind of computer will be the simulation of complex chemical reactions, a powerful tool that opens up new avenues in drug development. Quantum chemistry calculations will also aid the design of novel materials with desired properties, for instance better catalysts for the automotive industry that curb emissions and help fight climate change. Right now, the development of pharmaceuticals and performance materials relies massively on trial and error, which means it is an iterative, time-consuming and terribly expensive process. Quantum computers may soon be able to change this. They will significantly shorten product development cycles and reduce the costs for R&D.
4. Healthcare paradigm shift to prevention through diet
By 2025, healthcare systems will adopt more preventative health approaches based on the developing science behind the health benefits of plant-rich, nutrient-dense diets. This trend will be enabled by AI-powered and systems biology-based technology that exponentially grows our knowledge of the role of specific dietary phytonutrients in specific human health and functional outcomes. After the pandemic of 2020, consumers will be more aware of the importance of their underlying health and will increasingly demand healthier food to help support their natural defences. Armed with a much deeper understanding of nutrition, the global food industry can respond by offering a broader range of product options to support optimal health outcomes. The healthcare industry can respond by promoting earth’s plant intelligence for more resilient lives and to incentivize people to take care of themselves in an effort to reduce unsustainable costs.
5. 5G will enhance the global economy and save lives
Overnight, we’ve experienced a sharp increase in delivery services with a need for “day-of” goods from providers like Amazon and Instacart – but it has been limited. With 5G networks in place, tied directly into autonomous bots, goods would be delivered safely within hours.
Wifi can’t scale to meet higher capacity demands. Sheltering-in-place has moved businesses and classrooms to video conferencing, highlighting poor-quality networks. Low latency 5G networks would resolve this lack of network reliability and even allow for more high-capacity services like telehealth, telesurgery and ER services. Businesses can offset the high cost of mobility with economy-boosting activities including smart factories, real-time monitoring, and content-intensive, real-time edge-compute services. 5G private networks make this possible and changes the mobile services economy.
The roll-out of 5G creates markets that we only imagine – like self-driving bots, along with a mobility-as-a-service economy – and others we can’t imagine, enabling next generations to invent thriving markets and prosperous causes.
Technology drives data, data catalyzes knowledge, and knowledge enables empowerment. In tomorrow’s world, cancer will be managed like any chronic health condition —we will be able to precisely identify what we may be facing and be empowered to overcome it.
In other words, a new normal will emerge in how we can manage cancer. We will see more early and proactive screening with improved diagnostics innovation, such as in better genome sequencing technology or in liquid biopsy, that promises higher ease of testing, higher accuracy and ideally at an affordable cost. Early detection and intervention in common cancer types will not only save lives but reduce the financial and emotional burden of late discovery.
We will also see a revolution in treatment propelled by technology. Gene editing and immunotherapy that bring fewer side effects will have made greater headway. With advances in early screening and treatment going hand in hand, cancer will no longer be the cursed ‘C’ word that inspires such fear among people.
Historically, robotics has turned around many industries, while a few select sectors – such as grocery retail – have remained largely untouched . With the use of a new robotics application called ‘microfulfillment’, Grocery retailing will no longer look the same. The use of robotics downstream at a ‘hyper local’ level (as opposed to the traditional upstream application in the supply chain) will disrupt this 100-year-old, $5 trillion industry and all its stakeholders will experience significant change. Retailers will operate at a higher order of magnitude on productivity, which will in turn result in positive and enticing returns in the online grocery business (unheard of at the moment). This technology also unlocks broader access to food and a better customer proposition to consumers at large: speed, product availability and cost. Microfulfillment centers are located in existing (and typically less productive) real estate at the store level and can operate 5-10% more cheaply than a brick and mortar store. We predict that value will be equally captured by retailers and consumers as online.
One thing the current pandemic has shown us is how important technology is for maintaining and facilitating communication – not simply for work purposes, but for building real emotional connections. In the next few years we can expect to see this progress accelerate, with AI technology built to connect people at a human level and drive them closer to each other, even when physically they’re apart. The line between physical space and virtual will forever be blurred. We’ll start to see capabilities for global events – from SXSW to the Glastonbury Festival – to provide fully digitalized alternatives, beyond simple live streaming into full experiences. However, it’s not as simple as just providing these services – data privacy will have to be prioritised in order to create confidence among consumers. At the beginning of the COVID-19 pandemic we saw a lot in the news about concerns over the security of video conferencing companies. These concerns aren’t going anywhere and as digital connectivity increases, brands simply can’t afford to give users anything less than full transparency and control over their data.
9. Putting individuals – not institutions – at the heart of healthcare
By 2025, the lines separating culture, information technology and health will be blurred. Engineering biology, machine learning and the sharing economy will establish a framework for decentralising the healthcare continuum, moving it from institutions to the individual. Propelling this forward are advances in artificial intelligence and new supply chain delivery mechanisms, which require the real-time biological data that engineering biology will deliver as simple, low-cost diagnostic tests to individuals in every corner of the globe. As a result, morbidity, mortality and costs will decrease in acute conditions, such as infectious diseases, because only the most severe cases will need additional care. Fewer infected people will leave their homes, dramatically altering disease epidemiology while decreasing the burden on healthcare systems. A corresponding decrease in costs and increase in the quality of care follows, as inexpensive diagnostics move expenses and power to the individual, simultaneously increasing the cost-efficiency of care. Inextricable links between health, socio-economic status and quality of life will begin to loosen, and tensions that exist by equating health with access to healthcare institutions will dissipate. From daily care to pandemics, these converging technologies will alter economic and social factors to relieve many pressures on the global human condition.
Construction will become a synchronized sequence of manufacturing processes, delivering control, change and production at scale. It will be a safer, faster and more cost-effective way to build the homes, offices, factories and other structures we need to thrive in cities and beyond. As rich datasets are created across the construction industry through the internet of things, AI and image capture, to name a few, this vision is already coming to life. Using data to deeply understand industry processes is profoundly enhancing the ability of field professionals to trust their instincts in real-time decision making, enabling learning and progress while gaining trust and adoption.
Actionable data sheds light where we could not see before, empowering leaders to manage projects proactively rather than reactively. Precision in planning and execution enables construction professionals to control the environment, instead of it controlling them, and creates repeatable processes that are easier to control, automate, and teach.
That’s the future of construction. And it’s already begun.
11. Gigaton-scale CO2 removal will help to reverse climate change
A scale up of negative emission technologies, such as carbon dioxide removal, will remove climate-relevant amounts of CO2 from the air. This will be necessary in order to limit global warming to 1.5°C. While humanity will do everything possible to stop emitting more carbon into the atmosphere, it will also do everything it can in order to remove historic CO2 from the air permanently. By becoming widely accessible, the demand for CO2 removal will increase and costs will fall. CO2 removal will be scaled up to the gigaton-level, and will become the responsible option for removing unavoidable emissions from the air. It will empower individuals to have a direct and climate-positive impact on the level of CO2 in the atmosphere. It will ultimately help to prevent global warming from reaching dangerous levels and give humanity the potential to reverse climate change.
Jan Wurzbacher, Co-Founder and co-CEO of Climeworks
12. A new era in medicine
Medicine has always been on a quest to gather more knowledge and understanding of human biology for better clinical decision-making. AI is that new tool that will enable us to extract more insights at an unprecedented level from all the medical ‘big data’ that has never really been fully taken advantage of in the past. It will shift the world of medicine and how it is practiced.
Improvements in AI will finally put access to wealth creation within reach of the masses. Financial advisors, who are knowledge workers, have been the mainstay of wealth management: using customized strategies to grow a small nest egg into a larger one. Since knowledge workers are expensive, access to wealth management has often meant you already need to be wealthy to preserve and grow your wealth. As a result, historically, wealth management has been out of reach of those who needed it most. Artificial intelligence is improving at such a speed that the strategies employed by these financial advisors will be accessible via technology, and therefore affordable for the masses. Just like you don’t need to know how near-field communication works to use ApplePay, tens of millions of people won’t have to know modern portfolio theory to be able to have their money work for them.
14. A clean energy revolution supported by digital twins
Over the next five years, the energy transition will reach a tipping point. The cost of new-build renewable energy will be lower than the marginal cost of fossil fuels. A global innovation ecosystem will have provided an environment in which problems can be addressed collectively, and allowed for the deployment of innovation to be scaled rapidly. As a result, we will have seen an astounding increase in offshore wind capacity. We will have achieved this through an unwavering commitment to digitalization, which will have gathered a pace that aligns with Moore’s law to mirror solar’s innovation curve. The rapid development of digital twins – virtual replicas of physical devices – will support a systems-level transformation of the energy sector. The scientific machine learning that combines physics-based models with big data will lead to leaner designs, lower operating costs and ultimately clean, affordable energy for all. The ability to monitor structural health in real-time and fix things before they break will result in safer, more resilient infrastructure and everything from wind farms to bridges and unmanned aerial vehicles being protected by a real-time digital twin.
15. Understanding the microscopic secrets hidden on surfaces
Every surface on Earth carries hidden information that will prove essential for avoiding pandemic-related crises, both now and in the future. The built environment, where humans spend 90% of their lives, is laden with naturally occurring microbiomes comprised of bacterial, fungal and viral ecosystems. Technology that accelerates our ability to rapidly sample, digitalize and interpret microbiome data will transform our understanding of how pathogens spread. Exposing this invisible microbiome data layer will identify genetic signatures that can predict when and where people and groups are shedding pathogens, which surfaces and environments present the highest transmission risk, and how these risks are impacted by our actions and change over time. We are just scratching the surface of what microbiome data insights offer and will see this accelerate over the next five years. These insights will not only help us avoid and respond to pandemics, but will influence how we design, operate and clean environments like buildings, cars, subways and planes, in addition to how we support economic activity without sacrificing public health.
16. Machine learning and AI expedite decarbonization in carbon-heavy industries
Over the next five years, carbon-heavy industries will use machine learning and AI technology to dramatically reduce their carbon footprint. Traditionally, industries like manufacturing and oil and gas have been slow to implement decarbonization efforts as they struggle to maintain productivity and profitability while doing so. However, climate change, as well as regulatory pressure and market volatility, are pushing these industries to adjust. For example, oil and gas and industrial manufacturing organizations are feeling the pinch of regulators, who want them to significantly reduce CO2 emissions within the next few years. Technology-enabled initiatives were vital to boosting decarbonizing efforts in sectors like transportation and buildings – and heavy industries will follow a similar approach. Indeed, as a result of increasing digital transformation, carbon-heavy sectors will be able to utilize advanced technologies, like AI and machine learning, using real-time, high-fidelity data from billions of connected devices to efficiently and proactively reduce harmful emissions and decrease carbon footprints.
Despite the accelerating regulatory environments we’ve seen surface in recent years, we are now just seeing the tip of the privacy iceberg, both from a regulatory and consumer standpoint. Five years from now, privacy and data-centric security will have reached commodity status – and the ability for consumers to protect and control sensitive data assets will be viewed as the rule rather than the exception. As awareness and understanding continue to build, so will the prevalence of privacy preserving and enhancing capabilities, namely privacy-enhancing technologies (PET). By 2025, PET as a technology category will become mainstream. They will be a foundational element of enterprise privacy and security strategies rather than an added-on component integrated only meet a minimum compliance threshold. While the world will still lack a global privacy standard, organizations will embrace a data-centric approach to security that provides the flexibility necessary to adapt to regional regulations and consumer expectations. These efforts will be led by cross-functional teams representing the data, privacy and security interests within an organization.
How will technology change the world in the next five years?
It is very exciting to see the pace and transformative potential of today’s innovative technologies being applied to solve the world’s most pressing problems, such as feeding a global and growing population; improving access to and quality of healthcare; and significantly reducing carbon emissions to arrest the negative effects of climate change. The next five years will see profound improvements in addressing these challenges as entrepreneurs, the investment community and the world’s largest enterprise R&D organizations focus on developing and deploying solutions that will deliver tangible results.
While the COVID-19 pandemic has provided a difficult lesson in just how susceptible our world is today to human and economic turmoil, it has also – perhaps for the first time in history – necessitated global collaboration, data transparency and speed at the highest levels of government in order to minimize an immediate threat to human life. History will be our judge, but despite the heroic resolve and resiliency on a country by country basis, as a world we have underperformed. As a global community and through platforms like the World Economic Forum, we must continue to bring visibility to these issues while recognizing and supporting the opportunities for technology and innovation that can best and most rapidly address them.
The UK Labour Party is promising to provide free broadband internet to every British household by 2030 if it wins the 2019 election. To do this, the party would nationalise the broadband infrastructure business of BT and tax internet giants like Google and Facebook. Whatever you think of this plan, it at least reflects that the internet has become not only an essential utility for conducting daily life, but also crucial for exercising our political rights.
In fact, I recently published research that shows why internet access should be considered a human right and a universal entitlement. And for that reason, it ought to be provided free to those who can’t afford it, not just in the UK, but around the world.
Internet access is today necessary for leading a minimally decent life, which doesn’t just mean survival but rather includes political rights that allow us to influence the rules that shape our lives and hold authorities accountable. That is why rights such as free speech, free association, and free information are among the central rights included in the UN’s Universal Declaration of Human Rights. And, crucially, everyone needs to have roughly equal opportunities to exercise their political rights.
Before the internet, most people in democracies had roughly equal opportunities to exercise their political rights. They could vote, write to newspapers or their political representative, attend public meetings and join organisations.
But when some people gained internet access, their opportunities to exercise political rights became much greater compared to those without the internet. They could publish their views online for potentially millions of people to see, join forces with other people without having to physically attend regular meetings, and obtain a wealth of previously inaccessible political information.
Today, a large proportion of our political debates take place online, so in some ways our political rights can only be exercised via the internet. This means internet access is required for people to have roughly equal opportunities to make use of their political freedoms, and why we should recognise internet access as a human right.
As a human right, internet access should be “free” in two ways. First, it should be unmonitored, uncensored, and uninterrupted – as the UN’s General Assembly has demanded in a non-binding resolution in 2016. Second, governments should guarantee a minimally decent infrastructure that is available to all citizens no matter how much money they have. This means funding for internet access should be part of minimum welfare benefits, provided without charge to those who can’t afford to pay for it, just like legal counsel. (This is already the case in Germany.)
A political goal
In developing countries, digital infrastructure reaching everyone might be too expensive to guarantee immediately. But with the required technology becoming cheaper (more people on the planet have access to a web-capable phone than have access to clean water and a toilet), universal access could first be guaranteed via free wifi in public places. Supply can start off in a basic way and grow over time.
Should everyone in Britain have free broadband in their homes? There are many good reasons to provide the best possible internet access to everyone, such as increasing economic productivity, sharing prosperity more evenly across the country, or promoting opportunities for social engagement and civic participation. And, as such, free broadband for all may be a worthy political goal.
But what is most important is ensuring that everyone has the kind of internet access required for roughly equal opportunities to use their political freedoms. Guaranteed internet access should be considered a human right in our virtual world, whoever ultimately pays the bills.
Around the world, trillions of dollars are spent each year building skyscrapers, highways, pipelines, schools, and countless other structures, and the resources that could be saved using advanced analytics, automations, machine learning, and other technologies that are available now is staggering. As a primary investor and procurer in infrastructure projects and the shepherd of national economies, governments have a clear incentive to help accelerate adoption within the construction industry.
New technologies can advance project outcomes in the construction industry. Governments are well-poised to cultivate greater adoption.
An industry notorious for cost and time overruns, the construction sector can capture significant efficiencies by adopting new technologies. While many executives acknowledge the potential of new technology, they often hesitate to risk multi-billion-dollar projects on applications they consider unproven. To create greater value from public and private spending on large capital projects, governments can help clear the path and bring new technologies to bear.
New technologies—advanced analytics, automation, machine learning, and the Internet of Things, for example—have delivered substantial benefits to industries at the forefront of adoption, particularly telecommunications and finance. And while these disruptive forces will eventually wash over every industry, the construction industry still lags.
Digital tools are already available, with $18 billion invested in construction technology between 2013 and early 2018. McKinsey research, however, finds that leaders struggle to adopt these applications—not because of cost concerns or lack of interest, but rather because of insufficient internal processes and risk aversion.
Pressing need for improvement
Using technologies to boost construction productivity can have a profound impact on public and private spending. In the United States alone, expenditures on construction reached $1.29 trillion in 2018, after rising an average of 7.4 percent annually over the previous five years.1 1.US Census Bureau.
The public sector accounts for a significant share of this total. Stripped of residential and private-use projects, construction expenditure on public infrastructure—for instance health care, education, and transportation—reached $334 billion in 2018 (Exhibit 1). Public spending will finance almost 80 percent of these infrastructure expenditures, by our estimates.
And the rise in construction spending is unlikely to abate soon. Increased urbanization is creating demand for projects that support denser population centers, such as transportation, power, and sewage. And in the United States, deteriorating public infrastructure must be addressed urgently. McKinsey research found that the country requires an additional $500 billion in infrastructure funding between 2017 and 2035 to meet its estimated requirements.
Amid this growing need, public and private projects have struggled to keep costs and construction times within original projections, especially for complex, high-cost projects. Early adopters have already begun to test new technologies to improve project outcomes. For instance, some companies are using wearable GPS devices or smartphone apps to optimize workflows and resources. Others have begun using virtual-reality systems for supervisors and crew to “walk through” processes to prepare sequencing, identify potential problems, and conduct safety trainings more efficiently.
Governments are well positioned to catalyze change
Despite these early efforts, many companies are reluctant to experiment in untested waters. This is understandable since billions of dollars and corporate reputations are at risk with these projects, and there is no room for do-overs. These hurdles, however, present a prime opportunity for governments to take the lead and break the inertia that slows the construction industry from entering a digital era.
Public expenditures account for a significant portion of non-residential, public-use construction projects, and government agencies work closely with private companies of all sizes to deliver these complex infrastructure projects. Such projects span a wide range of infrastructure, from roads to buildings to sewer systems (Exhibit 2). The government’s purchasing power touches every corner of the construction industry, while its regulatory power allows it to set standards that are most easily met using new technologies or even to mandate their use.
Our experience and research suggest five measures available to governments that can be powerful tools in accelerating adoption.
Set bold aspirations
At the outset, governments can articulate bold aspirations for the adoption and use of technology in public sector projects. Beyond increasing awareness, such public aspirations demonstrate the priority given to developing a more efficient construction industry through broader deployment of new technologies.
One approach would be to craft a digital construction strategy that encourages the use of new tools to reduce the time and cost of public works projects. For example, clear targets could be set for the use of pre-fabricated or modular components, enabled by digital collaboration tools such as BIM, that would reduce the instances of rework and change orders.
Some countries have already taken steps on this direction. In Ireland, for example, the National BIM Council published a national strategy for the construction industry in 2017 that included clear digital targets.2 2.National BIM Council, Ireland, Roadmap to Digital Transition for Ireland’s Construction Industry 2018-2021, December 2017. As part of its vision, the council strives to reduce project delivery times by 20 percent, increase construction exports by 20 percent, and cut capital costs by 20 percent, all by 2021 compared to 2018 levels.
Create meaningful incentives
Governments can also use their purse strings and tendering processes to create meaningful incentives for construction companies. For example, public grants could be offered to help companies adopt technologies that aid in project design and execution. National competitions and prizes that reward technology adoption in construction projects can also provide first movers with additional financial support, as well as publicly recognizing the importance of using technology to accelerate and bring down the costs of construction. Similarly, governments may consider publicly supported incubators that allow low-risk testing for new applications.
Further, public contracting agencies can insist that successful bidders incorporate digital collaboration tools into publicly-owned projects. For example, the Tennessee Department of Transportation recently announced it will require prime contractors and designers to use construction productivity software on all its projects, beginning with March 2019 contract awards.
In another example, the UK Infrastructure and Projects Authority estimated that public and private investment in infrastructure projects will total about $780 billion between 2017 and 2027 and pledged “to use its purchasing power to drive adoption of modern methods of construction.”3 3.UK Infrastructure and Projects Authority, Transforming Infrastructure Performance, December 2017. Among the announced measures, five major government departments will weigh offsite construction capabilities in assessing tenders for projects.
In addition to creating meaningful incentives to spur adoption, governments can help reduce the barriers and risks that are unique to these emerging technologies. For example, procurement or acquisition regulations often place a great deal of emphasis on a contractor’s past performance in future source selections. However, contractors that wish to pilot new technologies will not have as much experience or demonstrated cases as those offering traditional solutions. If this is seen as a major disadvantage, it could hinder the use of government procurement processes to encourage the adoption of new technologies. Re-thinking these guidelines to make allowances for emerging technologies, giving them time to establish a foothold, may be crucial to accelerated adoption.
At the same time, governments can consider assuming some of the contractor risks associated with trialing new technologies. In selected projects or portions of projects, for example, governments can offer to reimburse contractors if the new technologies fail to deliver projected savings. Such guarantees may sound bold, but they can be successful if focused on targeted project components, phases, or solutions with substantial long-term savings potential.
Measures can also be taken to increase transparency around the costs and progress of public projects. This transparency is supported by digital technologies that provide real-time information on the progress of major projects. In turn, increased transparency creates pressure to complete projects on budget and on time, which becomes easier when new technologies are deployed. The United Kingdom’s infrastructure initiative includes benchmarking tools that track cost and schedule during the life of a project. The system not only follows the progress of individual projects underway, but also assesses the impact of completed projects in their overall asset class, as well as movement toward network goals, such as customer satisfaction and performance, and national goals, such as reduced carbon emissions and economic development.
Ultimately, these benchmarks can be provided on online dashboards that allow the public and other stakeholders to monitor progress, increasing the pressure on construction companies to meet deadlines and costs. For now, like in the United Kingdom, the results of these benchmarking exercises are generally available in annual reports.
As with most industries, the construction sector will struggle to find the talent needed to use new technologies effectively. Governments can play a dual role in helping to meet this challenge. First, they can invest in training programs that not only build needed capabilities but also provide new opportunities to workers displaced by these technologies.
Singapore, for instance, includes construction in its $3.3 billion Industry Transformation Programme, announced as part of the country’s 2016 budget plan.4 4.Singapore Ministry of Trade and Industry, “Industry Transformation Maps (ITMs),” Oct. 31, 2016. In this effort, the government wants to train 80,000 workers in new construction technologies, such as design for manufacturing and assembly methods, integrated digital delivery, tools that enhance collaboration, and offsite construction, as well as green building capabilities. Structured internships and additional training for recent university graduates are two measures the country is using to reach this goal.
And second, governments can lead by example by building their own internal digital capabilities. Developing these skills—for instance by creating an advanced analytics group—would allow public agencies to use new technologies more effectively in overseeing projects and optimizing maintenance operations and to understand more clearly how new technologies can be deployed broadly in the industry.
March 12, 2019, we celebrate the 30th anniversary of the
“World Wide Web”, Tim Berners-Lee’s ground-breaking invention.
In just thirty years, this flagship
application of the Internet has forever changed our lives, our habits, our way
of thinking and seeing the world. Yet, this anniversary leaves a bittersweet
taste in our mouth: the initial decentralized and open version of the Web,
which was meant to allow users to connect with each other, has gradually
evolved to a very different version, centralized in the hands of giants who
capture our data and impose their standards.
We have poured our work, our hearts and a lot
of our lives out on the internet. For better or for worse. Beyond business uses
for Big Tech, our data has become an incredible resource for malicious actors,
who use this windfall to hack, steal and threaten. Citizens, small and large
companies, governments: online predators spare no one. This initial mine of
information and knowledge has provided fertile ground for dangerous abuse: hate
speech, cyber-bullying, manipulation of information or apology for terrorism –
all of them amplified, relayed and disseminated across borders.
control: between Scylla and Charybdis
Faced with these excesses, some countries
have decided to regain control over the Web and the Internet in general: by
filtering information and communications, controlling the flow of data, using
digital instruments for the sake of sovereignty and security. The outcome of
this approach is widespread censorship and surveillance. A major threat to our
values and our vision of society, this project of “cyber-sovereignty” is also
the antithesis of the initial purpose of the Web, which was built in a spirit
of openness and emancipation. Imposing cyber-borders and permanent supervision
would be fatal to the Web.
To avoid such an outcome, many democracies have
favored laissez-faire and minimal intervention, preserving the virtuous
circle of profit and innovation. Negative externalities remain, with
self-regulation as the only barrier. But laissez-faire is no longer the
best option to foster innovation: data is monopolized by giants that have
become systemic, users’ freedom of choice is limited by vertical integration
and lack of interoperability. Ineffective competition threatens our economies’
ability to innovate.
In addition, laissez-faire means being
vulnerable to those who have chosen a more interventionist or hostile stance.
This question is particularly acute today for infrastructures: should we
continue to remain agnostic, open and to choose a solution only based on its
economic competitiveness? Or should we affirm the need to preserve our
technological sovereignty and our security?
a third way
To avoid these pitfalls, France, Europe and
all democratic countries must take control of their digital future. This age of
digital maturity involves both smart digital regulation and enhanced
Holding large actors accountable is a
legitimate and necessary first step: “with great power comes great
Platforms that relay and amplify the audience
of dangerous content must assume a stronger role in information and prevention.
The same goes for e-commerce, when consumers’ health and safety is undermined
by dangerous or counterfeit products, made available to them with one click. We
should apply the same focus on systemic players in the field of competition:
vertical integration should not hinder users’ choice of goods, services or
But for our action to be effective and leave
room for innovation, we must design a “smart regulation”. Of course, our goal
is not to impose on all digital actors an indiscriminate and disproportionate
Rather, “smart regulation” relies on
transparency, auditability and accountability of the largest players, in the
framework of a close dialogue with public authorities. With this is mind,
France has launched a six-month experiment with Facebook on
the subject of hate content, the results of which will contribute to current
and upcoming legislative work on this topic.
In the meantime, in order to maintain our
influence and promote this vision, we will need to strengthen our technological
sovereignty. In Europe, this sovereignty is already undermined by the prevalence
of American and Asian actors. As our economies and societies become
increasingly connected, the question becomes more urgent.
Investments in the most strategic disruptive
technologies, construction of an innovative normative framework for the sharing
of data of general interest: we have leverage to encourage the emergence of
reliable and effective solutions. But we will not be able to avoid protective
measures when the security of our infrastructure is likely to be endangered.
To build this sustainable digital future
together, I invite my G7 counterparts to join me in Paris on May 16th.
On the agenda, three priorities: the fight against online hate, a human-centric
artificial intelligence, and ensuring trust in our digital economy, with the
specific topics of 5G and data sharing.
Our goal? To take responsibility. Gone are
the days when we could afford to wait and see.
Our leverage? If we join our wills and
forces, our values can prevail.
have the responsibility to design a World Wide Web of Trust. It is still within
our reach, but the time has come to act.
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