Mega Trends

Noun: a pattern or a movement that has a major impact on business and society as a whole...

Noun: a pattern or a movement that has a major impact on business and society as a whole. Kingspan Magazine shares some of the most significant highlights of the key global mega trends and examines how these may impact the construction landscape now and in the future.

1. Economics… a global market place

  • Interdependency
  • Global integration
  • New, agile players
  • Increasing debt
  • New world order

The global economy is predicted to grow by just over 3% per annum 2016-2050, double in size by 2037 and almost triple by 2050. Power is shifting towards Asia and a group of fast growing, emerging economies called the E7 (Brazil, China, India, Indonesia, Mexico, Russia and Turkey), resulting in a whole new group of middle class, global citizens with higher aspirations and greater spending-power. Urbanisation is leading to economically rich mega cities, mega regions, and mega corridors, e.g. BosWash (area connecting Washington DC and Boston). The rapid and widespread influence of technological advancement is challenging the status quo of world economics as never before. The war for talent is increasingly fierce, requiring greater workforce mobility and diversity to secure competitive advantage and as a global marketplace becomes firmly established there’ll be a growing need for linked financial systems, policy co-ordination and strong supply chains for those operating in this environment.

Impact on the Construction Industry

Consolidation of suppliers and contractors, more regulation, more creative financing of projects that give accessibility to both investors and purchasers, the need for flexibility and adaptability are all facets of the changing face of the global construction sector. There’s also a growing investment into security (work site and cyber). Investment also continues into digital, integrated project management systems all geared to maximise efficiencies, lead times, site safety and overall predictability of scheme delivery. Shortage of skilled labour will continue to plague construction companies – a significant number left during the recession and have not returned. As companies struggle to staff sites and schedules shorten, many are turning to prefabricated, off-site construction methods thus reducing waste, increasing predictability and offering potential costs savings (US).

2. Technology… speed of advancement; the biggest disruptive force

Rapid technological progress is one of the biggest disrupting forces in our world today. The time it takes from breakthrough technology to mass-market application is collapsing. Computers are becoming faster, smaller and universal. Medical breakthroughs are prolonging and enhancing lives. New technologies embedded in our lives are changing the way we work and live and we are being forced to address ethics, privacy, transparency and the way we interact. Declining PC use and increasing mobile device adoption is driving a ‘mobile first’ world. Drones, robotics, big data, the cloud and 3D printing are all having an increasing impact on our lives while the rate of technology change is forcing individuals, societies, business leaders and governments to adapt to the emerging risks and opportunities.

Impact on the Construction Industry

Although BIM has dominated tech conversations in the construction sector, experts point to laser scanning, as an emerging technology that will impact. 3D laser-scanners can create a digital reproduction of the dimensions and positions of objects in a certain space and then turn the information into a point cloud image. Paper is so last year! Mobile apps with geo-fencing will boom. With so many contractors relying on time-tracking software, geo-fencing will help site managers better manage supplier payments and their payroll. The use of other mobile apps – Red-Trac and Labor Sync etc. – is also likely to grow. And wearable technology has leapt off the running track and into construction gear of all sorts – the Smart Hardhat, safer safety vests, and more are driving up site safety and efficiencies. While VR (virtual reality) and AR (augmented reality) visors are still rare sights on site, architects are finding uses for the headsets in the design phase.

The impacts of digital disruption are now so pervasive that no business in any sector – from the smallest family business to the largest multinationals – is immune from them.

Bob Moritz, PwC,

US Senior Partner

3. Demographics… mass move to urban living

  • Growing, aging population
  • Urbanisation
  • Rich-poor gap
  • Migration
  • Health challenges

Another billion people will join the world’s population by 2025, making an estimated total of 8bn; 9.3bn if forecast by mid century. Growth will come largely from the developing world in areas least capable of supporting the increase. We’re living longer and having fewer children. As a result, the fastest growing segment of the population will be the over 65s. Significant population growth in emerging markets and an aging, shrinking population in developed regions will continue to fuel the power shift. An increasing move to urban living continues – currently 50% of the world population lives in cities, with 1.5m added every week. At the same time, growing levels of poverty, inequality and health challenges exist with obesity and malnutrition polarising nations.

Impact on the Construction Industry

The changing needs of the global population are impacting residential, commercial and infrastructure projects. Homes need to adapt to more single occupancy, smaller family units, shared living and co-ownership, more home-workers, and an aging population – all requiring safe, affordable spaces in inclusive environments that are well connected to local amenities. Mega cities in both developed and developing regions will require clever planning and design; condensing space while preserving comfort and security for living accommodation and investing in infrastructure and larger distribution/logistic facilities, leisure and retail buildings that support the community. Changing habits will also drive change, e.g.. in the USA, 18-24 are largely foregoing cars and fewer teenagers are getting licenses. This suggests fewer new parking projects will be coming up, however, existing spaces may be repurposed into other functional structures, which presents further opportunity to the construction industry.

4. Environment and Sustainability… growing consciousness and energy to address

  • Natural resources stretched
  • Climate change
  • Species under threat
  • New legislation
  • Compliance

As the population increases and becomes more urbanised and prosperous, demand for energy, food and water is rising. The strain on scarce resources is compounded by the detrimental impact this is having on our climate. While non-renewable resources are technically finite, new technologies continue to impact future supply by allowing access to previously inaccessible oil and gas reserves. This is driving businesses to adapt and innovate in order to benefit from the shifting supply environment. SMART is the new GREEN! We’re replacing early ethical products and services with new solutions that are connected and able to sense, process, report and correct. The SMART city market will be worth $1.5tn by 2020. Society, governments and businesses must work together to develop more sustainable approaches to achieve economic growth with new legislation, collective responsibilities across nations and heightened consumer awareness of the issues continuing to influence and impact progress.

Impact on the Construction Industry

More commercial contracts will be green and focus on sustainability. This is being driven by increasing legislation, government mandates for green buildings, calls for the use of renewable power and design innovation, and fuelled by suppliers and buyers with a corporate, eco-social conscience. McGraw Hill Construction suggests that 48% of all new nonresidential construction projects will be green; a $145bn opportunity for construction firms. While green planning and design is easiest to implement for new construction, it is the retrofit and refurbishment of existing buildings (4.6m in the UK alone) that is presents both challenge and opportunity.

The changes we are likely to see to our society and environment over the next two decades and beyond will require a paradigm shift in the economy and society. The companies that recognise and plan for it now will be the winners of the future. We need to think now about how business services will evolve in the next two decades and beyond. The opportunities are real for those who help create a sustainable future.

Ian Cheshire, Group CEO,

Kingfisher plc

5. Society… the impact of Gen Y, culture, faith, values and beliefs

Everything and everybody, to a certain extent, is connected – permanently. By 2020, there’ll be over 5 billion Internet users, with 50% accessing it on the move. Already 80 billion devices are connected and we’re dealing in visual and social communication like never before! It’s a fast, dynamic world where choice-, information-, technology-, and work-overload steal time, privacy, peace and certainty. An individual’s identity is increasingly shaped by who they are and how they live, where values and a sense of purpose, wellbeing and worklife balance are important factors creating a values-gap with the views of an aging generation of business leaders, whose primary focus is earnings, rank and profit. The role of faith, culture and religion is increasing along with mobility and migration impacting almost every part of the world. Women’s empowerment, the increasing call for tolerance and addressing the world’s inequality gaps are ever pressing. ‘Value for many’ is the new retail mantra fuelled by a burgeoning global middle class – currently around 4 billion. By 2020, the B2C retail norm will be ‘Bricks+Clicks’ – high street and online sales, out of which online is expected to be 19%, and worth $4.3tn by 2025.

Impact on the Construction Industry

Buildings that adapt to people and their living/working patterns will be a major evolution leading to more productive environments, higher levels of satisfaction and comfort for occupants, and more flexibility for owners and facilities managers. Think hot-desking, crash-pads for sleeping, and micro living units. The advance of the Internet of Things (IoT) is a major trend in building management and the growing availability of data will lead to new solutions. More discerning, values-based consumers will be increasingly concerned about the ethics of their spaces, the materials they are made of and the designers and builders who envision and create them. Opinion on the extent that IoT and ‘Green’/SMART buildings are global trends, however, most agree that the future of building design is likely to take a western approach in the foreseeable future, with priorities in developing countries focused on the more basic and affordability factors.

It’s (VR) something that we’re actively involved in. We’re engaging the makers of these technologies, and we’re using our own projects as test beds. Our LA office is kind of a living lab, an experimentation environment. As we develop the next iteration of our office space, we’re using VR tech to internally vet our perspectives and explore possible design changes.

Alan Robles, Associate at Gensler,

in charge of interactive design