After months of deliberation and discussion, the Infrastructure Investment and Jobs Act (IIJA) has been passed into law. The massive $1.2 trillion budgeted for distribution to multiple sectors represents a larger project than even the New Deal that was introduced following the Great Depression. This means that the law will likely form the foundation on which the future of the construction industry will be built.

This move could not come at a better time, with 78% of industry experts believing that the construction sector is ripe for disruption. The IIJA will provide industry players with the resources they need to engage with and deploy the most innovative technologies available to them.

Since its announcement, there has been much confusion over the precise implications of the law and how construction firms, in particular, can use the funding set aside for them. Here is a rundown of the IIJA and what it means for the future of the construction industry.

What is the Infrastructure Investment and Jobs Act?

The IIJA is a new law that aims to deliver funding for federal agencies and private partners to upgrade various aspects of the United States’ infrastructure. This funding will be spread over everything from the electrical grid to water systems. The government, through the introduction of this law, has indicated its willingness to support public-private partnerships as long as they benefit Americans.

For the construction industry, this represents an opportunity to catch up with other industries in modernizing operational processes and adopting cutting-edge technologies. The construction sector has lagged for a variety of reasons and this law could provide construction companies with the funding necessary to explore and deploy the right solutions for their unique circumstances. This increase in technology use, while delayed, has gained steam in recent years and the IIJA will accelerate this growth.

What the law means for the future of advanced digital construction management systems

As more solutions providers develop and sell software and hardware made specifically for the needs of construction businesses, more companies have begun to embrace modern technology. A recent survey by McKinsey & Company revealed that a majority of industry leaders expect new production technology, digital products, and new materials technology to impact construction at scale in the next half a decade.

With demand for construction services rising and the workforce becoming increasingly stretched, technologies such as modular construction and building information modeling (BIM) have become essential solutions for construction companies.

These modern solutions will grow and expand as more companies experience the benefits they can provide. In recognition of this, the IIJA has put aside $100 million for construction companies to subsidize digital transformation projects over the next five years. This means that every construction company, regardless of size, will have the opportunity to use digital solutions to augment existing processes.

This shift makes digital solutions less of a competitive advantage and more of an essential part of any construction company's solution stack. Here are five reasons digital transformation in construction is important enough for the law to set aside $100 million specifically to subsidize these projects.

Why $100 million has been set aside specifically to accelerate digital transformation in the construction industry

Maximize interoperability with other systems, products, tools, or applications

Technology adoption in construction has been extremely inconsistent within and across businesses. Administrative teams within construction companies have been more willing to embrace digital solutions than operational teams, although this is changing. Within the industry, there is a great disparity between companies that use modern software to manage projects and companies that still rely on spreadsheets to collect and share project data.

As more companies use the resources granted by the IIJA to build technology stacks, it becomes equally important to build bridges between these stacks. Construction has, and will continue to be, a collaborative industry. This has never been more true with modular construction becoming an increasingly popular way to spread customer demand across multiple companies. The law is concerned with ensuring that construction companies build technology stacks that can operate well and integrate seamlessly with systems used by industry counterparts during collaborative construction projects.

Boost productivity across the industry

There are two major problems that the construction industry has been facing for decades. The first problem is that there is a labor crisis that affects every construction company in the world. The result of this labor shortage is that construction companies must try to attract more workers as quickly as possible and must increase productivity as much as possible in the meantime. The second challenge construction companies face is that the sector has averaged less than 1% productivity growth in the past couple of decades—compared to 2.8% for the total economy.

The IIJA provides companies with the resources to overcome this challenge. With digital solutions, construction companies can automate labor-intensive but operationally critical processes while diverting labor to high-value tasks. Hardware solutions can even augment the abilities of human workers at project sites. As more companies build and develop sector-specific solutions, construction companies will have more options that allow them to increase productivity in new and unique ways.

Manage construction project complexity

Construction projects are all inherently complex. However, the complexity of each project depends on the specifics of each project. Airports and hospitals will naturally be more complex than residential projects. As more companies attempt to use their premises as an extension of their brand, construction projects have become increasingly complex. This complexity is compounded by a global materials shortage and increasing production costs. 

The IIJA provides businesses with a solution to this in the form of digital transformation assistance. Industry-specific software allows construction companies to manage this complexity by workshopping ideas in virtual environments, managing project data and resources from a single place, and effectively procuring in-demand materials, amid many other benefits. These investments allow construction companies to manage the complexity of construction projects and by extension, improve the rate at which they can complete them.

Reduce project delays and cost overruns

Cost overruns and project delays are a reality of working in construction, and these challenges have a spillover effect on all the construction projects a company is working on. This spillover effect is even more disruptive on large scale infrastructure projects.

The IIJA recognizes the impact that technology can have on improving project planning and execution and therefore, encourages digital transformation for all construction projects. For instance, project management software can help construction companies learn about potential delays and cost overruns in advance and plan around such disruptions.

Enhance on-site safety and production quality

The construction industry, by its nature, requires its workers to engage in physical labor across project sites. This can sometimes put workers at risk of injury or adverse events. Construction businesses have a responsibility to do everything in their power to reduce the number of risks workers face during their workday. In recent years, exoskeletons, virtual reality headsets, and wearable technology have provided construction workers with solutions that help them manage safety at the project site. However, they were prohibitively expensive for many companies.

The IIJA could change that and make this technology more accessible for smaller companies. In the meantime, construction companies can improve safety training with software that keeps workers up to date on the latest safety policies and protocols that they should follow on-site.

How construction businesses can maximize the utility of new and existing technologies with integration

Digital solutions can help construction companies improve safety, increase productivity, and raise profitability. However, digital solutions alone cannot accomplish all this. In an industry as siloed and varied as construction, companies are likely to adopt more than a single solution to meet the needs of various stakeholders within the company. 

Many business leaders assume that providing each department with a specialized solution is enough to increase productivity, effectiveness, and operational efficiency across the board. In reality, this could further entrench operational and information silos within the company. In essence, a complex technology stack does not guarantee that a company will experience the full benefits of digital transformation.

The key step that business leaders tend to overlook as they attempt to extract the maximum utility from their technology stack is integration. It is important that each solution construction businesses invest in actively contributes to an existing solution stack. This means that business leaders must be fully aware of the reason each solution exists in their stack and how it contributes to the bigger picture. As solutions are integrated into a cohesive and coherent technology stack, construction businesses can build a suite of solutions that are unique to their needs and requirements.

Ryvit specializes in closing the gap between disparate solutions by syncing all your data on a single, unified platform. Even as administrative departments, operational teams, and external stakeholders use their own software to manage specialized tasks and workflows, Ryvit helps construction businesses consolidate all operational, financial, and administrative information in one place. This allows business leaders to access important project information in real-time, and safely and securely. 

The IIJA is huge, and we’re here to help first-movers take full advantage of the construction technology marketplace to unlock drool-worthy ROI. Click here to learn more.