The Power of Automation in Construction

Jason Shuma, Partner at Primary Venture Partners

In your observation, how has construction tech evolved over the years?

Over the years, the construction industry has evolved in a variety of ways, among which a few appeared to make a huge difference. For example, the shortage of skilled labor in the U.S. ultimately affected the quality of labor available in the construction industry. To mitigate these labor challenges, companies reduced the reliance on labor power on the construction site by introducing automated and streamlined hardware and software tools. The use of more software solutions in the construction sites is not only ensuring higher quality service delivery but is also streamlining operations in an expedited manner.

The advancements in construction technology are helping general contractors and subcontractors as they contend with financial and labor challenges daily. In light of this fact, many companies are offering solutions to help the contractors, which in my opinion, is going to gain traction over the next few years.

Could you elaborate on the challenges prevalent in the construction space today?

One of the biggest challenges the industry faces today is the labor pool and the move toward increasing efficiency. We need more climate-friendly, energy-efficient construction methodologies. 

And ideally, the people who will be leading the way will be those making the decisions on the construction site and making suggestions that are better not only for the developers and owners but for our planet.

What are the trends evolving in the marketplace today to overcome these challenges?

There are many technologies in the construction industry that are more efficient and environmentally friendly. For instance, numerous efficient methodologies are being introduced in the industry to produce raw materials like cement and steel. Moreover, companies tend to invest more in developing software programs that help developers design buildings more efficiently.

Another trend that will mark its difference in the industry is manufactured housing, as it effectively addresses many of the challenges plaguing the construction industry today. The reliance on labor will be reduced through the development of manufactured housing, which is a major advantage. Moreover, it has got an important perk of reduced energy consumption from an environmental perspective as well.

Is there any particular construction tech solution or service that you're providing to your clients?

As someone working exclusively on the investing side of the business, I would suggest some of our partners who are extremely well-versed in construction tech solutions. For example, Naya Homes is helping institutionalize the vacation rental asset class down in Latin America. They provide solutions to manage the vacation rentals in the country, helping drive more demand in the country. Another example of our technology investment is a company called Latch, an enterprise smart lock company.

We primarily focus on investing in three to four investments per partner per year, with which we're trying to be the most impactful on the table. We are trying to invest in low volume, doing only NYC-based companies to bring a better portfolio impact of a team who will work with our company on recruiting and strategizing finance. This has led us to the top five percent of global funds, and eight of our first 34 investments are unicorns.

What trends will impact the industry in the next 12 to 18 months?

In the coming years, I believe a huge amount of money will flow into infrastructure. We plan to enhance our investments in the U.S. and firm up our borders. Our supply chain system, in general, is trying to advance America's business inside our country. Additionally, I expect investments in the industrial side that will eventually lead to more construction. Meanwhile, the interest rates are expected to be higher in the future, and this will directly impact new constructions. To tackle this, infrastructure investment is going to be the best solution.

What are some of the most popular technologies in the construction tech space today?

In my opinion, automation is the ultimate answer. Automate as many jobs as possible, and that will give better results in all areas of the industry. Another popular trend that I believe in is prefab homes and manufactured housing, which is going to make a huge difference in the construction industry.

What would be your piece of advice for budding professionals in the field?

There are many opportunities to leverage technology on a job site. Companies that identify those opportunities and adopt newer methods will advance faster, whereas the slower adaptors of technology will be slower in the race. In short, the companies that are going to implement technology, sooner or later, are going to be able to build their best.