Construction's pollution problem: Nemetschek CEO on how tech can help

Construction is facing multiple pressures over skills, costs and pollution

By many measures, the construction industry is the least digitised in the world. Given the nature of the business, this is unsurprising, but it’s not sustainable by any definition of that word, according to Yves Padrines, CEO of German software company Nemetschek Group.

"We're in a new era," he said. "We're in an energy crisis era, a supply crisis era, a skills crisis era"

The construction industry - or more accurately the architecture, engineering, construction and operations (AEC/O) sector - is undergoing one of the biggest shocks since the oil crises of the early 70s, thanks to a confluence of disruptive events. It faces myriad challenges, from sustainability requirements and skill shortages to supply chain issues, energy price shocks and the ongoing impact of Covid.

As an industry that operates on fine margins, it cannot afford to be wasteful, yet 20% of building materials are trashed, primarily due to over-ordering, according to Padrines.

The sector has a serious pollution problem. EU figures indicate that construction and demolition waste (CDW) accounts for more than a third of all waste generated in the EU.

Moreover, AEC/O is responsible, directly and indirectly, for 40% of global CO2 emissions. By comparison, aviation, which people tend to worry about more, contributes 2-3%.

The sector's massive environmental footprint stems from the production and use of materials like cement, steel and aluminium, along with high energy consumption during construction. But the majority of emissions come during the operations and maintenance phase, including heating and lighting.

Needless to say, construction is coming under increasing regulatory pressure to clean up its act.

The industry also faces a shortage of skilled professionals, both field workers and those with specialised skills such as architects and engineers. This, coupled with complex supply chains and generally poor project management and planning, leads to inefficiencies and delays.

"Ninety percent of construction projects are late and over budget due to lack of project management and planning," noted Padrines.

Nemetschek specialises in software for the construction industry, and also, more recently, digital media. Having begun as a small engineering firm in Munich 60 years ago, it was one of the earliest developers of CAD software. It is now the second-largest software company in Germany with a market capitalisation of €10 billion.

According to Padrines, there is a huge appetite for digitisation as the industry strives to be more efficient in order to cut costs and make the most of the skills it has, and to clean up its act as regulations are introduced around the world. For example, Singapore mandates the use of Building Information Modelling (BIM) software for construction projects over $3 million, and Germany requires its use for public infrastructure projects financed by the government.

BIM provides a platform for collaboration between architects, engineers, developers, contractors, manufacturers and other stakeholders, reducing errors and consequent waste and inefficiencies. "Using BIM software we can help to calculate precisely the volume and quantity of materials needed, reducing waste," said Padrines.

Inevitably, AI is making its way onto the scene. For example, virtual assistants can maintain documentation, prepare submissions for licences and ensure adherence to regulations. Padrines said the company is mindful of concerns that AI might leak sensitive designs and other IP. He also insisted AI is there to augment rather than replace human activities. "We are positioning ourselves to provide AI features to our customers to help them be more productive, but in an ethical and trustworthy way."

Nemetschek Group recently founded an AI innovation hub to bundle the existing AI activities in the Group and accelerate the adoption of AI in the AEC/O sector.

Digital twins are also coming into play in AEC/O, a borrow from adjacent industries.

"You might say well, digital twin is very old, it's been in manufacturing in aviation for years, but frankly in construction it's new," said Padrines.

"A digital twin is a digital replica of physical assets, so it's a perfect tool for the design construction and maintenance sector. It brings clarity to all the stakeholders orders from the outset."

Digital twins can embody historical data and combine that with sensor data to create a living picture of the building through its lifecycle from plan to build to ongoing usage.

All in all, AEC/O has been slow to adopt digitisation, but as a complex industry facing multiple pressures, it can no longer afford to remain behind the curve, Padrines said.