PALOS VERDES, CA – Construction Super Conference (CSC) Keynote speaker Alec Ross has thought a lot about innovation. Whether it’s maximizing technology in the service of American diplomatic goals, or pondering global technology trends that will shape the next decade, Ross makes sense of a changing globe.
As the literal framework for the physical world, construction plays a profound role in the global economy. It’s the type of industry that fascinates Ross, an author and professor who will be speaking at CSC on Tuesday, Dec 17, from 8:15 a.m. – 9:30 a.m., at the Terranea Resort in Palos Verdes, California.
“Construction is a $12 trillion global industry that accounts for about 13 percent of global GDP,” Ross says. “It is right up there with agriculture in terms of global significance to the economy. I was compelled to speak at CSC not only because of the importance of the industry, but also because of the opportunity given some of the changes that I believe will come.”
For those who engage in the day-to-day grind of building and litigating within the vast construction landscape, Ross’ talk is designed to provide a keen perspective on what changes may be on the horizon. News Print sat down with Ross to get a glimpse of his Keynote address (presented by Cozen O’Connor), as well as to gauge his level of optimism about the inevitable changes ahead.
CSC News Print: How does construction fit into the technology changes of the last 20 years? Alec Ross: If the story over the last 25 years, economically, was the rise of the internet, digitization, and the transformation of industries rooted in information and communication, I believe the story of the next five to ten years will be the rise of an industrial internet, which will transform industries that to this point have been affected but not transformed. I put construction prominent among those.
CSC News Print: Do you believe the future will see faster change for construction?
Ross: I believe that construction is an industry where we will see more change over the next 5 to 10 years than we've seen over the last 30.
CSC News Print: Generally speaking, what do you plan to talk about during your Keynote address?
Ross: My plan is to give a forecast of some of what I believe these changes will be, and to talk about the promise and peril that the changes may bring. We now live in a world of about 20 billion networked networked devices. In just three years that number will be 45 billion, and it's not because we're putting more cell phones in more pockets. It's because we are animating more things with censors, and digitizing our supply chains, and increasingly we're going to be digitizing our construction processes. I believe that construction 10 years from now will not look a lot like construction today.
CSC News Print: Is there an analogy from another industry that illustrates this point?
Ross: If you look at the operation of a port today versus a port 60 years ago, they look very different. I think that this is the kind of change that's coming to the construction industry. If you think about an image from a port from the 1950s, you would picture throngs of men carrying and transporting things. If you look at a picture of a port today, there are almost no people, but the amount of goods being moved are greater than 60 years ago. That's because of automation.
CSC News Print: How would you define automation?
Ross: Automation is the creation of powerful industrial robotics. Powerful industrial robotics has not yet come to the construction industry at scale, but it's close. That's why if you look at a construction site today, it doesn't look that vastly different from a construction site decades ago. But I believe it soon will. And it's not that humans are going to be replaced, it's that our human labor is going to be dramatically enhanced by powerful industrial robotics.
CSC News Print: For CSC attendees (construction owners, or senior executives, construction attorneys), what are some questions that should be asked when pondering new technologies in their own business or work processes? How they should be thinking?
Ross: A modest size construction entity can begin thinking about how to apply innovative technology in pilots—at a single place in a single instant; as opposed to going whole hog across the portfolio from day one. A lot of the time, the arguments against change in the construction industry are being made by those who often times have the most to lose. Therefore, they are biased against change. If you think about what the fixed costs are, if you think about what the cap ex is in most construction projects, it's pretty substantial.
Too much of that, I believe, is taken as an article of faith. You just assume that the costs are what the costs are, and it's going to be like that forever. It shouldn't be the case though. And you have to remember that the financial case that is often times being made for costs being what they are, and remaining what they are, comes from a set of incumbent financial interests. When determining whether to do something differently, when trying to apply some innovative technology, think very carefully about who is arguing for the change, and think very carefully about who is arguing against the change.
CSC News Print: Should construction professionals be early adapters of technology, or instead cultivate a wait and see approach?
Ross: For institutions working in construction that find themselves in a highly competitive environment, being willing to innovate or apply technological innovations can potentially give you an edge in an increasingly competitive marketplace. It's often times the case, especially with some of the jumbo players out there, that medium sized construction players simply can't compete on cost with the larger entities.
CSC News Print: Are larger entities generally quick to adopt?
Ross: Larger entities are among those that are traditionally earlier to apply technological innovations. If smaller entities competing against jumbo players want to keep up, or if they want to even get ahead, then they need to be a little bit earlier in the cycle of technology adoption. The larger entities are often times doing it quicker, and then the rest of the market follows.
The problem for the medium sized entities is that they are having to compete against jumbo entities. They have some advantages. They may be more local, but they have other disadvantages. For example, they don't have the economies of scale, and the purchasing power that the larger entities do. It's a competitive marketplace, and for institutions that find themselves in highly competitive environments, where they are really having to work hard to close deals with lots of competitors, those are, in my opinion, among the entities that ought to think first about technological innovations.
CSC News Print: Speaking generally…Do you think the next 100 years will bring more advancement than the previous 100 years?
Ross: I think that the pace of change is accelerating. What used to take decades now takes years. What used to take years now takes weeks or months. What used to take weeks or months now takes days. What used to take days now takes minutes; so the pace of change is accelerating. The pace of change from 1919 to 2019 was, in many respects, greater than 1819 to 1919, and I think that trend will continue.
CSC News Print: What is your overall level of optimism about the future of the construction industry?
Ross: I am very optimistic about it, but context matters. Today's frontier markets are tomorrow's developing markets. And today's developing markets are tomorrow's developed markets. If you want to achieve growth, we're going to have to be a little bit more expeditionary, both in terms of geography and in terms of project type. I think that there's going to be more geographic spread in large scale construction projects over the next five to 15 years than has been the case over the last 15 years. I think we're going to see less of the growth driven by the sixth, seventh or eight biggest markets.
About Keynote Speaker Alec Ross
Alec Ross is one of America’s leading experts on innovation. He has been an entrepreneur, served for four years as senior advisor for Innovation to the Secretary of State, and advised President Obama on the intersection of technology and geopolitics during his first presidential campaign. In his role with the State Department, Ross was tasked with maximizing the potential of technology and innovation in service of America’s diplomatic goals. He advanced the State Department’s interests on a range of issues including Internet Freedom, cybersecurity, disaster response, and the use of network technologies in conflict zones. Ross is the author of the New York Times bestseller The Industries of the Future. The book explores the technological and economic trends and developments that will shape the next 10 years including robotics and artificial intelligence, advanced life sciences, cybersecurity, big data, and the code-ification of money, markets, and trust. The Industries of the Future goes beyond the technical and provides the geopolitical, cultural, and generational contexts out of which new innovations are emerging. Ross serves as an advisor to investors, corporations, and government leaders to help them understand the implication of factors emerging at the intersection of geopolitics, markets, and increasingly disruptive network technologies. His recent recognitions include being named one of the “Top 100 Global Thinkers” by Foreign Policy magazine, receiving the U.S. Department of State “Distinguished Honor” Award, the Oxford University “Internet & Society” Award, and the TriBeCa Film Festival “Book of the Year” Award.