Role of Corporate Venture Capital in Advancing Innovation in The Construction Industry

Thai Nguyen, Director Of Innovation, Hensel Phelps

1. What are the biggest trends and  challenges in the innovation and technology  landscape for the construction industry  today? 

The rapid advancement of technology and widespread availability  of inexpensive IoT devices have enabled construction sites to  collect massive amounts of data in recent years. Despite the  abundance of information, a fragmented and non-interoperable  data landscape has emerged, making it challenging to derive  meaningful insights and take action. To tackle this challenge,  the industry must prioritize standardization to ensure data  interoperability. By doing so, AI can be leveraged to analyze the  data and drive actionable results, unlocking the full potential of  the data being captured.

Consider a recent construction project where two innovative  startups implemented cutting-edge technology to capture and  track data. The first startup utilized digital badges embedded  with RFID, BLE, and other tracking technologies to monitor the  workforce, while the second deployed 360-degree photo capture  technology to track construction progress. Despite the success of  these technologies in capturing data, the project team struggled to  make sense of it and turn it into actionable tasks.

Now imagine if this data was standardized and interoperable.  The project team could not only track progress but also understand  which trade was responsible for specific tasks, the timing of those  tasks, and the manpower required. 

Another trend in the industry is that owners are seeking  the freedom to choose their technology platforms and choose  technologies that align with their specific needs. A one-size-fitsall  approach does not work for every owner, and they don’t This level of insight would lead  to more streamlined workflows, improved collaboration, reduced  waste and costs, and increased efficiency and productivity.

The  standardization and interoperability of data have the potential to  unlock a wealth of valuable insights and benefits.want  to be tied to expensive contracts with one company or pay for  services they don’t use.

The ideal solution is the ability to integrate modules from  multiple technology providers that work together seamlessly.  This presents a great opportunity for startups, as they can focus  on developing their core competencies while ensuring simplicity,  ease of use, and most importantly, interoperability. By making  their products interoperable with other technologies, startups can  ensure a smoother adoption process and eliminate resistance from  owners, who are often hesitant to adopt new products. 

2 .How does Hensel Phelps’ CVC firm  ‘Diverge’ helping to address the challenges  that you mentioned and how will you  measure the impact of these efforts? 

At Hensel Phelps, we firmly believe that collaboration between  GCs, startups, academia, and VCs is the key to solving industrywide  problems. Our recently launched CVC ‘Diverge’ plays a  crucial role in this effort.

We have established a cutting-edge 26,000 sq. ft. innovation  lab that will provide a collaborative environment for startups to  develop and refine their solutions. The startups will have access  to subject matter experts who have extensive experience in the  construction industry as well as the opportunity to gain hands-on  experience by visiting job sites, receiving live feedback from endusers,  and understanding real-world problems.

"Standardization and interoperability of data have the potential to unlock a wealth of valuable insights and benefits in the construction industry"

The innovation lab will provide the startups with exposure  to not only our team, but also to our partnering GCs, VCs, and  research institutes. This will not only help startups to avoid costly  mistakes and develop solutions that are relevant to end-users but  also help them to ensure that their technology is easily adopted at  scale.

Our goal is to bring together the best technology solutions and  assemble them in a way that promotes innovation, standardization,  and interoperability. The startups that emerge from this process  will be equipped with cutting-edge technology that is ready for  widespread adoption.

We measure the impact of our efforts through increased  efficiency and productivity, improved safety, and reduced costs.  At Hensel Phelps, we have a long-standing commitment to  delivering successful projects and making a positive impact in  the communities we serve. For 85 years, we have been the largest  airport builder and the top tech contractor,  delivering world-class projects such as airports  and hospitals, and making owners and workers  happy. 

3. How does Diverge collaborate  with other stakeholders,  such as startups, universities,  and government agencies,  to support innovation and  technology?

At our company, we prioritize collaboration  and innovation through our partnerships with  research institutes, universities, and startups.  Instead of just providing funding, we actively  support these entities by providing hands-on  guidance and access to real-world job sites to  help them tackle industry challenges head-on.

Additionally, we foster innovation from  within by hosting internal pitch competitions for  our employees and anyone with an innovative  idea to bring forward. This not only incentivizes  creativity but also provides a platform for  growth and commercial success for the best  ideas. With a successful track record of 30 years  of supporting and growing startups, we continue  to drive innovation and drive positive change in  the industry 

4. As a CVC, you likely face  similar challenges to others in  the field. How do you ensure  efficient and effective solutions? 

The construction technology industry has seen  a rise in collaborative efforts between leading  CVCs in recent years. Regular meetings are  Thai Nguyen  held between top GCs to exchange ideas and solutions, leading to a shared pool of  knowledge and expertise. This collaboration not only allows for the identification  of new investment opportunities and the overcoming of industry challenges but  also fosters relationships that may lead to joint ventures and strategic partnerships.

By working together, CVC firms can expand their investment opportunities,  tap into new markets and technologies, adopt best practices, and drive innovation  and growth in the industry. This results in improved products, services, and  overall market performance, enabling CVC firms to achieve their goals more  efficiently and effectively through collaboration.