Accelerating the Shift to the Next Industrial Revolution

Gonzalo Galindo Gout, President, CEMEX Ventures

The bigger something, the harder it is to change it. And in the business of construction, which is one of the largest industries in the world economy, there is no exception to this rule. Because of the nature of construction that relies on extensive use of different materials, suppliers, and workers, often coming from or located in multiple locations, change has uniformly lagged. Well, that is until now. The proliferation and success of construction tech startups in the last six years have pushed the industry to become more progressive, digital, and less risk-averse. Let us take a closer look to see how these startups are the key to a successful transformation as we face the next revolution in the construction industry.

Unleashing a Brief History of Construction

For as long as civilization has been studied, humans have practiced construction, depending on the natural resources available, the climate, and the culture of the societies themselves. Small and usually temporary structures for shelter are some of the earliest recorded constructions in human history. Fast forward a few millennia and the first large-scale buildings can be traced back to Mesopotamia, where advanced bricklaying became a popular method for building palaces, temples, and roads. Centuries later, new construction methods were developed and made popular in Ancient Egypt, China, Greece, and Rome, and spread throughout the world, many of which have become the foundation for our modern construction practices today. It is hard to say whether construction follows society or society follows construction, but all these periods in history tell us that despite many thousands of years, evolution and advancement are an intrinsic element of one of civilization's oldest industries.

Toward the Next Milestone

Notwithstanding its extensive past, the construction industry has its sights set on the future, which is where construction tech startups come in. Over the last two decades, tech startups, once small newcomers, have evolved into modern conglomerates, replacing some of the oldest companies as the most profitable businesses in the world. Although the tech revolution's impact on construction has come more slowly than other industries, like manufacturing, financial services, and transportation, the speed at which tech startups are moving the industry forward is more rapid than ever, and only increasing as the industry faces unprecedented pressure to become more sustainable while remaining profitable. This is why some of the largest construction companies, with decades of history in the industry, find the sector at a decisive turning point and are looking to startups to forge a way forward, together. Construction, which has always prioritized innovation but has been slow to digitize, is now anticipating, developing, and adopting new technologies and business models at record levels. So, while construction conglomerates may have lagged behind other industries during the digital revolution of the 20^th century, industry leaders are looking at construction tech startups to make the industry more efficient, sustainable, and agile and take pole position in the looming fourth industrial revolution.

“The technologies that are needed to fulfill the objectives of the industry already exist. However, many construction startups lack the resources, network, and know-how to develop at the speed and scale required to make a swift impact.”

Perhaps what is most indicative of the promise of Contech startups for a better future is that despite all-around decreases in venture capital spending in 2022 due to unfavorable macroeconomic forces and socio-political events, investment in Contech remained stable, which reveals not only the profitability of new Contech solutions but also their importance in the greater world economy. Here are just a few examples of the ways Contech startups are bringing construction to the forefront of innovation.

The Role in Decarbonization

The construction industry faces a considerable challenge—reducing CO2 emissions and keeping up with the rising demand for infrastructure projects—all while fighting inflation and boosting profitability. That is why startups dedicated to Carbon Capture, Utilization, and Storage (CCUS), hydrogen energy, industrial heat alternatives, and circular economy solutions are in high demand. For instance, Synhelion, whose innovative business model converts concentrated solar heat into the hottest existing process heat on the market to be used in many industrial processes in place of fossil fuels, and Carbon Clean and Carbon Upcycling, who repurpose and remove the carbon dioxide emitted in the heavy industries, are seeing exponential success as their technologies are adopted by the some of the leading corporations in the heavy industries.

Advances in Robotics and Machine-Assisted Applications

Startups like COBOD, the world leader in 3D construction printing solutions, are another game changer in making use of construction robotics and 3D printing (3DP). Recent startup advances in robotics and machine-assisted applications are improving precision, reducing costs, decreasing material waste, and reducing time spent per project.

Reaching the Goal

The technologies that are needed to fulfill the objectives of the industry already exist. However, many construction startups lack the resources, network, and know-how to develop at the speed and scale required to make a swift impact. That is why startups and corporations need to work together to apply new startup technologies to construction corporations' core businesses and large-scale networks.

One example of this collaboration in practice is the construction startup competition which is led by some of the biggest construction companies and investors to find the most promising startup solutions. In 2023, the competition is going on its seventh edition, but former winners of the competition have gone on to raise capital, pilot their solutions in real markets, and even establish collaboration agreements with the competition sponsors. Now more than ever, we should be mindful of the reality that the future of construction is built today, not tomorrow.