If you are in the real estate industry, you are in the construction industry as well. In that light, today’s State of Construction Technology report released by JLL should be required reading. It provides not only an overview of the sectors within the construction tech industry but also an outlook on future growth in the field (needless to say, the future potential of technologies like building imaging and robotics is massive).
Interestingly, the report points to a 20% drop in venture funding for construction tech this year, despite $10 million-plus funding rounds at seven different companies, including Billd (a payment platform), Matterport (3D imaging for buildings), and Fieldwire (a field management tool).
The report breaks down the construction tech business into three categories: foundational technologies that provide a framework for other advancements, like BIM and AI, primary impact technologies like drones and modular construction that JLL sees as having the biggest impact on the industry in the near future, and secondary impact technologies that are either early in development or offer only an incremental impact on the business.
One thing that still stands out in the discussion of construction tech is the gulf between it, in many cases, and the broader PropTech world. While PropTech and ConTech are often mentioned in the same sentence, it’s still fair to say that tech devoted to the building of properties is considered separate from tech that helps manage or invest in properties. Consider the fact that we have separate terms for the two areas in the first place. It’s not like anything about “property” inherently excludes “construction,” right? And we don’t have separate terms for TenantTech, DesignTech, ManagementTech.
No doubt there’s some utility in knowing whether a given company or technology becomes relevant during construction or operation. But at the same time, perhaps this distinction does more harm than good. Is construction really so separate from the rest of a building’s lifecycle? Some of these ConTech products themselves seem like they’d cross the construction-operation divided. Matterport, for instance, is widely used for leasing or sales as well as during construction. Digital twin technology is actually the textbook example here: understanding where every component in a building is, and then using that information to help streamline management and operations, is crucial functionality for these systems.
Perhaps the biggest lesson here is that just like cross-training is useful between different property business job functions, the same is true for different niches of tech. Whether or not your business is engaged in construction, maintaining an awareness of the state of the industry can equip you to respond quickly to market changes when it is really necessary. We all have to deal with the repercussions of construction, both good and bad, so understanding where the industry is going is critical to seeing what is in store for the real estate industry as well.