When Burcin Kaplanoglu joined Oracle after more than 15 years at the global development firm Lendlease, he was looking to do innovative things. He had been working in operations at his former firm and noticed construction was one of the least digitized U.S. industries and that it was difficult for construction firms to experiment with new technologies due to the day-to-day operations that couldn’t afford to be disrupted. Six months into his new role leading the construction innovation software business at Oracle, he made a big ask of his new firm: build a site to physically test products. “We want to innovate, in order to do it, we have to physically do it,” Kaplanoglu told me. “The idea was to really illuminate and create an environment to do these things.” Six months after that, Oracle’s first Industry Innovation Lab in a northern suburb of Chicago where embedded technologies were able to be field tested was fully up and running.
Kaplanoglu and his team weren’t sure how the lab would be received, but three years later, after welcoming visitors from all over the world to tour the facility, the test site exceeded the firm’s expectations. Now, four years after the opening, Oracle is planning to launch several more labs like the initial one near Chicago in locations around the world. The idea behind them is simple: instead of clients testing out new technologies on an active project to see whether they want them or not, have them tested at Oracle’s state-of-the-art labs and report back. “It was totally new, a physical test bed for use cases. Our competition wasn’t doing it,” Kaplanoglu said. While similar kinds of test labs exist, none are to the scale and size of Oracle’s Industry Labs, he said.
The first lab is focused on issues around construction and engineering, but other labs will be dedicated to tackling problems surrounding energy, water, hospitality, and communications. At the heart of the projects is the idea that the labs’ purpose is to solve problems. Common issues throughout several industries are trying to cut down on energy use, making the best use of space, and improving safety at worksites. Kaplanoglu described how one client of the company was trying to figure out how to automate when pouring concrete at a construction site. Oracle took the idea and ran with it. After installing sensors from several companies with highly-rated products, lab testers got to work pouring concrete and seeing which sensors worked the best.
The first Industry Lab was modest, made up of just a double-wide trailer, a steel structure and a fence. “It didn’t look like anything fancy,” Kaplanoglu said. That first site was the start of the entire Industry Lab program and was up and running from 2018 until the pandemic hit. But at the same location, a new, more high-end facility later began to take shape. In developing the new building, technologies that had been tested at the inaugural facility were used, and they did as they were made to do: the building was finished on time and on budget. “We leveraged all this technology that we were planning on using,” he said.
The new building at the Chicago site opened in April of last year. At the opening, highlights included robot dogs from Boston Dynamics that have built-in cameras, sensors, and can be used to create digital twins based on the data they collect as they roam around. The robots can also be used to do remote asset inspections, something that can come in handy particularly in light of the labor shortage. Attendees at the opening event were able to see a digital twin of the lab using VR goggles and joined a design review session. Issues that arose in that session were captured and collected and put into Oracle project management software. “In industries, whether its utilities, construction, public safety—the problems are very similar,” Kaplanoglu said. “For real estate, everyone is trying to optimize operations, trying to save energy and trying to get the best occupancy.” The process at the labs start with researchers picking use cases and problems based on what the industry is relaying to them. Then they figure out the technology and the skills required to fix it. As a software company, Oracle then figures out ways where their tech or partner tech fits in and they build integrations and test them out. “I think it’s been successful because we’re building things for the industry to use rather than bringing tech to them and saying ‘try this out,’” Kaplanoglu explained.
The new 30,000-square-foot building is filled with sensors of all kinds and resembles a giant hangar with a glass wall around it. Within the three-story building is a floor dedicated to manufacturing that can easily be adapted to different uses. Drones and onsite cameras can give live updates of a project’s progress, while data from cameras and sensors are used to build a 3D virtual model of a project based on 2D plans, which can allow for a virtual walkthrough of a site that reduces the need for travel and increases accountability. The use of digital twins, or virtual models, has been getting a lot of buzz lately and it’s one of the showcase features at the Chicago-area lab. By building a digital twin, researchers can create running simulations and make decisions based on those outcomes, like figuring out the best way to occupy space in a building.
Construction technology is an important topic right now. Development projects getting sidelined by delays from labor shortages, supply chain backlogs, and high materials costs are impacting real estate projects across the board. According to the National Multifamily Housing Council, 84 percent of multifamily construction and development firms said they are experiencing construction delays at their projects. Given the affordable housing crisis, there’s a lot of pressure on speeding up multifamily development, but it’s not the only real estate segment facing delays. Developers of office and industrial properties have also been struggling with project delays related to a number of factors over the last year.
The construction labor shortage is bad now, and it’s expected to get even worse. In April of last year, the US construction industry had around 440,000 job openings while the US manufacturing industry had more than one million, according to research from McKinsey & Co. The figures are the highest levels on record since data on jobs at the industry level were first collected. The question over who will fill the hundreds of thousands of additional jobs that the firm estimates will be created each year as a result of the Bipartisan Infrastructure Law is one that is so far unanswered, but it is a critical one for projects of all kinds, which rely on a chain involving several industries and any glitch could results in projects being scaled back or scrapped altogether.
While the Chicago lab is mostly focused on construction, Oracle also built an apartment unit in the facility to test out tech that monitors energy use. Using behavioral science technology, researchers can look at patterns in how users are consuming energy. They have been testing and trialing how to best manage and use energy from the heating system to the in-unit washer and dryer. Predictive technology in the energy space is another technology the company is looking at. With an expected wave of electric vehicles (EV) coming to market, the energy used to charge them will increase the load to electrical networks significantly. Over the last two years, Oracle researchers have been working on tech that can recognize if a person has an EV based on energy consumption and can predict what kind of charger they have. From there, the technology can recommend to a user the best time to charge their vehicle and what kind of charger to use.
Construction was recently completed at Oracle’s latest Industry Lab in London and will focus on solving problems in multiple industries. As part of its research, lab workers acquired an old train car that was then custom built to use in simulations that will explore problems around sustainability, mobility, and accessibility. It isn’t just the buildings that are modeled, it is the experience as well. Kaplanoglu described how researchers will track an individual’s journey from getting off the train to the door of their apartment, with one scenario involving how it would work having a robot bring food to someone as they make their way from transit to home.
Innovation is crucial for real estate at the moment. While supply chains are improving, they are still suffering from the effects caused by the pandemic, and it’s still causing issues at construction sites. Add to that a labor shortage that will continue to get worse, and more real estate development is sorely needed across the country, especially when it comes to housing, getting projects done efficiently and safely is a top priority. High-profile test sites like Oracle’s Industry Labs are an important development for the construction industry and the real estate industry as a whole. Oracle is also a behemoth software company with a lot of funds to create these labs, something that other firms may not be able to do at the same level. But regardless of their size and scale, the goal of these kinds of simulated test labs is to use technology to solve common problems, and that’s something the real estate industry could use more of right now.