Automation, digitalisation and innovation

Overview

• There are a range of technological changes that could disrupt the provision of architectural services.
• Automation, digitalisation and increasing demand for building information modelling creates risks, but also opportunities for architects.
• There are various factors that may compromise architects’ capacity to respond to these disruptive forces, including lags in building standards and disincentives arising from procurement models and processes.
• There is more work to be done in understanding the specific impacts of technological developments on the delivery of architectural services and the risks to compliance with professional standards that could arise.

A. Background

202. The construction sector is not known for innovation and the rapid uptake of technology. In fact, one study finds that the construction industry is among the least digitised industries.[1]

203. Construction largely involves project-based activity, with temporary coalitions of different organisations that come together to complete a specific project. The various parties usually disband once the project is finished. Consequently, any innovation that may be generated in the context of a project may be consigned to that project and the likelihood of knowledge being transferred from one project to another may be limited, which is major barrier to innovation.[2] Further, clients may not support innovation as this may lead to unwanted risk.[3] This may encourage conservatism in building design and construction.[4]

204. However, as explained in more detail below, there are some major disruptive changes that could fundamentally alter the way the construction sector operates in the foreseeable future, including in relation to the provision of architectural services. These changes could alter the risk profile of construction projects, but could also provide opportunities for those practices that are ready for change. Anecdotal evidence indicates that some private equity firms may target architectural design practices in the future because they see opportunities for growth, particularly through automation and digitisation of products and process. Failure to account for these disruptive changes could expose architects to competitive risks.

B. Key issues

There are a range of changes that could disrupt the provision of architectural services and, consequently, also increase architects’ exposure to legal risk

Automation and modularisation

205. Automation and modularisation are likely to characterise the future in the construction sector.[5] Modular construction is defined as the process in which a building is constructed offsite, under controlled factory conditions, using the same materials and design and built to the same codes and standards as conventionally-built facilities, but more quickly.[6] It has been suggested that this apparent trend could significantly lower construction costs.[7] However, it could also decrease the volume of services required in particular segments of the market, including architectural services.[8]

Digitalisation

206. The rapid adoption of digital and data technologies in recent times is another megatrend identified by CSIRO in its 2022 report about ‘Our Future World’.[9] Digital tools can help to optimise energy performance and cost of a building and enable stakeholders to visualise the building.[10] The AIA Client Survey (2021) suggests that the use of digital technologies, such as high-level 3D modelling to help clients, authorities and other stakeholders understand design development, is critical.[11] Cities are already leveraging digital technologies to enable buildings to become interactive elements of broader systems, such as the energy system.[12] Yet, it has been suggested that there is significant and largely untapped potential to use digital solutions for design, construction, operation, and refurbishment or demolition to make buildings more energy efficient.[13]

Building information modelling

207. Big data and analytics are also likely to have an impact on architectural design.[14] BIM has been defined as ‘a digital representation of physical and functional characteristics of a facility’. Beyond providing a basic geometric building model, BIM also incorporates all related information which can help project teams improve design, construction and operation and maintenance of buildings. BIM can also facilitate effective real-time collaboration by enabling project stakeholders to share information across a centralised cloud-based platform.[15]

208. In the AIA Client Survey (2021), a progressive use of design technology to support innovation in design and operational efficiency was found to be important to almost 50% of surveyed clients. Concerningly, around 40% of respondents indicated that the firm they used had not provided them with useful information to help educate their team on the advancements and benefits of BIM, with a further 25% stating that they were unsure.[16] Clients said ‘we’re looking for post-occupancy evaluation but with skin in the game. Architects should invest in this to prove interest in knowing how the building performs. We require BIM, proper construction documentation, planning expertise, value engineering. We require high-level 3D modelling to help client, authorities and other stakeholders understand design development’.[17] Those architects who do not have skills and expertise to use BIM to service clients who are increasingly looking for data and evidence to inform investment, particularly for sustainable design,[18] may face additional competitive pressure. Conversely, investing in BIM may drive up architects’ fees, which could also undermine competitiveness.

209. There are also risks associated with the use of BIM for architectural design. In particular, its use significantly changes the relationships between parties in the project by blending responsibilities and roles. It also assumes a more collaborative environment among project participants.[19] A study conducted by Almarri et al (2019) showed that BIM success depends on close collaboration with the client, designers, contractors and consultants.[20] However, for reasons discussed earlier in this report, such collaboration may be compromised under some procurement models, particularly the D&C model.

There are various factors that may compromise architects’ capacity to respond to these disruptive forces

210. Building codes have historically been slow to respond to change and technological developments. It can take a decade or more for a new concept to achieve acceptance and result in incorporation into relevant codes and standards.[21] In the absence of support in the building regulatory framework for new technologies and approaches, architects may be deterred from embracing them.

211. The procurement model may also act as a deterrent. The fragmented nature of design and construction under a D&C procurement model may prevent innovations from being adopted and implemented.[22] Burke (2015) further suggests that architects are not well-placed to respond to the risks that innovation in the sector poses, largely because of their small scale which make it uneconomic to fund innovation.[23] Research into the subject of innovation also suggests that there may be cultural reasons for the lack of uptake, namely the perceived risk associated with innovative ideas.[24] In particular, a 2010 study undertaken in the UK found that architects who participated in the study perceive the risk associated with innovative ideas to be the most significant barriers to innovation in the UK construction industry.[25]

C. Findings

212. The requirement for architects to maintain professional standards in providing architectural services will not wane in the face of wide-scale technological change that is set to fundamentally disrupt the sector. Regulation of compliance with professional standards is likely to be become more complex in light of these developments. In this regard, there is more work to be done in understanding the specific impacts of these developments on the delivery of architectural services and the particular risks to compliance with professional standards that could arise.

D. Regulatory role

213. The ARBV and NSW ARB have no direct role in ensuring architects are prepared for disruptive technological forces that are already in play in the sector. Nonetheless, the ARBV and the NSW ARB will continue to support architects to understand and comply with their professional standards obligations in light of these developments.

E. Role of other stakeholders

214. Industry bodies and education and training providers could provide support to architects in the form of education, training and engagement to raise awareness of the opportunities and risks associated with the disruptive technological forces affecting the sector.

215. There may also be a need to review building standards to ensure that they keep pace with technological change.

F. Implications and recommendations

G. Areas for further research

[1] McKinsey & Company, n. 12 above, p. 17.

[2] S. Naoum, K. Lock, & D. Fong, ‘Is Fragmentation of the UK Construction Industry the Main Barrier to Innovation? The Architects’ View’ (2010) Conference Paper.

[3] Ibid.

[4] Ibid.

[5] McKinsey & Company, n. 12 above, p. 48.

[6] Allianz, n. 186 above, p. 14.

[7] McKinsey & Company, n. 12 above, p. 48.

[8] Ibid.

[9] CSIRO, n. 235 above, p. 5.

[10] United Nations Environment Programme, n. 239 above, p. 22.

[11] Australian Institute of Architects, n. 85 above, p. 22.

[12] Deloitte, Urban Future With a Purpose: 12 trends shaping the future of cities by 2030 (2021), at p. 7.

[13] United Nations Environment Programme, n. 239 above, p. 22.

[14] Marsh & McLennan, Emerging Risks in Construction: Expert Perspectives on the Construction Industry, at p. 5.

[15] H.J. Koo & J.T. O’Connor, n. 198 above.

[16] Australian Institute of Architects, n. 85 above, p. 22.

[17] Ibid. p. 22.

[18] Ibid. p. 13.

[19] K. Almarri, M. Aljarman, & H. Boussabaine, ‘Emerging contractual and legal risks from the application of building information modelling’ (2019) 26(10) Engineering, Construction and Architectural Management, pp. 2307–25, at 2314.

[20] Ibid.

[21] American Institute of Architects, Disruption, Evolution and Change (2019), at p. 8.

[22] S. Naoum, K. Lock, & D. Fong, n. 273 above.

[23] A. Burke, n. 214 above, p. 50.

[24] S. Naoum, K. Lock, & D. Fong, n. 273 above.

[25] Ibid.