A richer conversation is going on now about what site-built home building practices might learn from what happens in controlled factory environments where modular home components are framed out, fabricated and assembled. And the other way around.
We're talking more specifically, recently, about what can and can not (maybe) be done in factories today, nor possibly, ever, that can be accomplished by skilled craftsmen and/or women on a home job site.
We know that construction process itself, building materials science, and business models to make a company profitable would each have to undergo big changes for scaled new-home construction offsite in factories to make sense and profit.
Those big changes are going to get a lot of attention here in this space and in BUILDER over the next series of months, or maybe a few years. There's compelling reason for those big changes to happen. And it seems to me that it's more a matter of changing mental models, plus the rapid pace of technological change, that will bring them about.
Importantly, Tedd Benson reminds us, we're talking about people's homes, and the people in them--whether they know it or not--are critical to the outcomes and the nature of debate over where, and how, and how profoundly new computer-aided technologies, automation, multi-dimensional "printing," and data will play a role in producing homes and communities. People need to feel that their houses and surroundings are homes, and neighborhoods, safe, solid, valuable in the present and valuable over time.
Tedd also notes that emphasis on improving technology and automation in home building is not a deemphasis on human craft, on artisanship, on people skills. Building better does not mean building less expensively, it means building better. Sustainably building better means that entrepreneurs, and small, medium-sized, and large companies will find new balances between what people need to do and what machines and data can do for them.
This is consistent with findings from a new study from McKinsey & Co., "Harnessing Automation for a Future that Works," which takes pains to show that humans paired with technology is the combination that industries, businesses, ecosystems like housing will benefit from the most. One insight in the McKinsey study is that we stray off point when we look at "occupations" as ripe for replacement by automation, versus specific work activities, tasks, parts of processes. The analysis notes:
"Activities in the middle range of the technical potential for automation involve large amounts of physical activity or the operation of machinery in unpredictable environments. These types of activities make up a high proportion of the work in sectors such as farming, forestry, and construction and can be found in many other sectors as well.
Examples include operating a crane on a construction site, providing medical care as a first responder, collecting trash in public areas, setting up classroom materials and equipment, and making beds in hotel rooms. The latter two activities are unpredictable largely because the environment keeps changing.
Still, more broadly, McKinsey's new study reports that currently available tech could automate about 45% of what you or I are paid to do, and that 6 of every 10 occupations--including construction--could see up to 30% of our offline tasks and applied skills automated.
Building better, as far as we can tell, means both human skill applied at a high level of quality together with a greater role for technological, data, and machine-learning activity.
Two very very compelling data points make it clear that--while progress is happening, and bright spots in the development of transformative construction and business models are out there--the industry sector has a long way to go.
One is the train currently barreling straight toward the flank of the housing recovery, which has to do with the size of the homeownership universe, current and potential. We'll continue to debate for some time between now and 2025 whether a structural change has occurred among people's intent to own homes. Until then, it will be hard to know the answer to that question. What we can know sooner is that the economics of homeownership make in and of itself reduce the size of the universe of potential homeowners.
This analysis zeroes in on one incredibly telling data point to make it's principle assertion that housing may in fact be in a "bubble", or even a post-bubble, with respect to one of its common-sense criterium defining a bubble as such: the relationship of prices to household incomes. Here, the analyst drives home his point about a widening gap between the two benchmarks:
With home prices rising by $5.32 for every $1 increase in median household income, this third phase may qualify as a post-bubble trend, although we recognize that this rate of increase is somewhat faster than the $3.60-$4.07 rate that median new home sale prices went up for every $1 increase in median household income in the 32 years from 1967 through 1999.
The author does allow for a factual caveat, which is that you don't really have a bubble unless it eventually collapses. It's only real if it pops.
Here, though, is another extraordinarily compelling data point arguing for a dramatically greater role for technology and automation in home building business and operations and construction processes, listed among a litany of pain-point issues, such as an aging workforce, a talent shortage, a high fatality and accident rate vis a vis other industries, a low gross/net margin for the sector vs. other industries, and a basement-dwelling spend-to-revenue ratio on technology vs. other industries. Here's the kicker bullet point .
We have the lowest productivity improvement rate across all industries.
That economic measure, together with the expanding size of a universe of people who, due to economic reasons, may not opt for homeownership, means that technology and automation need to play a bigger role in housing construction and business operations.
Read, please, read Gemba Technologies president Michael Oster's "Call for Action to Leaders: Technology Change in 2017 for Construction Industry."
It should spark further great debate, conversation, and maybe some controversy on how, and what, and when companies can and must invest in this greater role for technology.
The root of the word "invest" is interesting here, for it emerged in the late 1300s, "to clothe in the official robes of an office," from Latin investire "to clothe in, cover, surround," from in "in, into" (see in- (2)) + vestire "to dress, clothe," from PIE *wes-ti-, suffixed form of root *wes- (4) "to clothe" (see wear (v.)).
Technology and innovation need a welcoming into companies' core area of focus. They need a place at the table, so that building better is not mistaken for less-expensive construction, but more profitable, more valuable, more life-affirming homes and communities.
