How ready are UK companies to adopt new digital technologies?

The CBI has surveyed business leaders about their views on digital.

A data centre. Storage of data will be amongst the many challenges facing companies adopting new technologies
A data centre. Storage of data will be amongst the many challenges facing companies adopting new technologies

New business models, digitally enabled trade and automation will pose real and tangible challenges to how we do business. Sectors across the economy are being transformed at a rapid pace from shared transportation to new online challenger banks. The construction and infrastructure sector is not immune to these shifts.

Technologies such as cognitive learning, and Artificial Intelligence (AI) will fundamentally transform society. The current pace of change in technology is unrivalled and individuals, companies, and governments are under pressure to keep up.

The McKinsey Global Institute estimates that AI’s disruption of society is happening 10 times faster and at 300 times the scale of the industrial revolution, suggesting AI will have 3,000 times the impact.

Half of businesses the CBI surveyed believe AI will fundamentally transform their industry. No business can afford to ignore the transformative economic and productivity benefits of innovation.

Adding value to infrastructure and construction sectors

In today’s world AI is most often associated with Silicon Valley tech companies or autonomous cars. But like any technology AI is a tool that can be embraced by any sector and can add exponential value in industries with historically low levels of productivity - such as construction.

The economic prize is there to be seized as productivity in the global infrastructure sector has remained static at 1% for the past 20 years

Adoption of digital technologies coupled with increased levels of innovation can fundamentally transform the construction industry as well as – and more importantly - address some of the challenges and opportunities the sector is facing in the next few years. This includes getting major infrastructure projects built as well as the implications of the ongoing Brexit negotiations.

There are already fantastic examples of innovative and transformative construction projects, such as Crossrail, HS2 and Heathrow Terminal 5. But more needs to be done to filter this behaviour to the entire sector as well as across the supply chain. Much of this is linked to behavioural change.

To encourage innovation and the adoption of digital technologies the industry needs to collaborate more. In a fragmented sector this collaboration must be driven by every client, private or public, tier one contractor - the entire supply chain right down to the end user.

Industry view from Future Leaders Group

The CBI has set up a Future Leaders Group to develop recommendations focused on improving collaboration through digitisation within the sector. The work of this group will complement existing work, such as Construction 2025, by providing the view from industry.

The group comprises representatives from across the supply chain, from design to sub-contractors, is expected to report to the CBI’s Construction Council, a 30-35 strong forum of chief executives, in November.

The Future Leaders’ Group comprises 18 rising stars under 35, drawn from companies spanning the supply chain, from major construction firms to small and medium sized businesses.

The group represents a wide spectrum of jobs from across the construction industry, including construction products, contractors and services and they are examining the issue from four different perspectives: procurement and contract structures, research and innovation, skills and digitisation.

Digitisation and AI offer the construction industry a catalyst for increased efficiencies, enhanced quality assurance and new means of work. The opportunity is there to integrate disjointed supply chains while creating a real-time feedback loop on construction progress, just-in-time delivery of materials and the delivery of crucial data to onsite contractors.

The sector can learn how to adopt and embed these technologies by looking across the piece to how other business are embracing AI.

What businesses say about AI

So, what do UK businesses think about AI? The CBI has surveyed business leaders to understand how ready companies are to adopt – and adapt – to new digital technologies. We found:

Businesses are ambitious but divided

A third of businesses (33%) self-categorise themselves as digital pioneers - labelling themselves as early adopters and innovators.

  • This paints a relatively positive and digital-savvy picture of UK business, showcasing a healthy appetite for the adoption and use of digital technology.
  • Yet over a quarter (27%) saw themselves as followers of the digital revolution in business, who wait for technology to become mainstream before adopting.
  • Agility is king
  • Investment in technologies like cloud and mobile which were seen as niche just a few years ago now underpin much of UK business.
  • Yet, there is a shift on the horizon
  • AI investment is gaining momentum with 42% of companies planning to invest in AI over the next five years. And that’s on top of the one in five companies who invested in AI during the past 12 months
  • AI key to efficiency and competiveness
  • An overwhelming majority believe AI will enhance efficiency (79%), increase competitiveness (74%), be customer focused (72%) and offer a unique selling point in helping businesses differentiate from competitors (69%)
  • ‘Followers’ risk being left behind
  • For many companies AI is either not in their investment plans (29%) or are not familiar with the technology (8%) and nearly 42% of ‘followers’ do not plan to invest in AI at all. These companies risk being left behind as pioneering companies use their head start to seize the initiative and redefine their industry.

Government can help unleash the power of AI both for construction and engineering but also the wider business environment if it:

  • Uses the industrial strategy challenge fund to tackle societal problems using AI.
  • Kicks start our journey to 3% investment in R&D through an enhanced tax allowance and renewed partnership between firms, universities and government.
  • Set up a joint commission involving business and government to examine the impact of new technologies, including AI and robotics, on people and jobs, with recommendations for action and policy by June 2018.

UK business can kick start their own AI adoption journey by:

  • Learning from best practice examples from across sectors as well as looking to international examples.
  • Ensuring there are financial incentives in place for sectors with fragmented supply chains.
  • Having the right ‘base’ technologies such as cloud, mobile and analytics. Familiarity with these core technologies will help companies prepare for the deployment of emerging technologies while also helping to create a level of standards and integration across supply chains.

To secure the UK as the digital hub of the world we need many more businesses closing the gap with these ‘pioneers’ because the global race has well and truly started.

Further information

Go to our Digital transformation campaign section for more resources.

Don’t miss our free 20 July webinar: Artificial intelligence in the built environment. Register now.

If you would like to learn more about the CBI’s work on digitalising the construction sector please contact Fiona Geskes, Senior Construction Sector Adviser.

For more information on the CBI’s work on digital adoption by businesses and AI please contact Shane Murphy, Senior Policy Adviser.

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