Digital transformation of the Austrian construction industry and its impact on employment
Starting point, goal and contents
Although the construction industry is not regarded as a pioneer of digitalization, the diffusion of digital technologies is also making steady progress in this field. This development is the reason to ask in a trend analysis about the likely impact of the digital transformation of the Austrian construction industry has on this sector's labour market. In which segments do digitalization and automation processes predominately lead to job losses vs. job gains? In addition to quantitative employment effects, changes in content in construction occupations are analysed, in particular challenges in "digital competence" and new approaches to the work organization or to job profiles.
The trend-analytical methodological setting for estimating future labour market and employment effects is structured in such a way that specialist literature and media reports were examined in the first part and preliminary trend hypotheses were derived from it. In the second part, a survey of experts of the Austrian construction industry in autumn 2020, we confronted them with our hypotheses. The evaluation and reproduction of this interview material is the main part of the trend analysis at hand.
Following relevant trade journals in the construction industry, which are full of reports on digital applications – from construction site apps for more efficient information exchange via Building Information Modelling (BIM) to robotic applications such as drones, 3D printing, etc. – the impression arises that not only the planning, but also the manual work on construction sites is already extensively digitized. In the practice of enterprises, on the other hand, actual ICT diffusion is progressing at a slower or incremental rather than disruptive pace. For countries such as Austria, it can be inferred from this that a serious job reduction in the construction sector associated with digitalization is unlikely, at least in the next few years. The limits of rapid penetration of work processes with digital technologies also lie in the fact that, apart from major new buildings or in infrastructure construction, renovation work or activities in the construction related industries dominate in craft occupation such as plumber, painter or carpenter, etc. Many things are structured in small parts, therefore labour-intensive work is difficult to automatise. In general, work processes on construction sites are less easily standardizable than in "stationary" production sites.
The increasingly broad impact of digital applications in the construction sector should neither become a job killer, nor a job bringer. In a balancing of the collected findings, it can be predicted, for all uncertainties, that the increasing prevalence of digital technologies in the processes of the construction industry should lead to the following developments in the next five to ten years (ceteris paribus):
- stability to slight increase in employment in the case of highly qualified non-manual work by civil engineers, IT professionals, etc;
- a tendency to decrease non-manual (office) routine activities for employees;
- stability of employment among skilled workers in construction occupations, with the high demand often expressed being partly due to the lack of availability of suitable staff;
- decrease in employment in the construction sector for semi-skilled and unskilled manual auxiliary work.
When discussing technological rationalization potentials, one needs to differentiate (simplistically) between "software" (e.g. BIM, AI) and "hardware" (e.g. 3D printing, robotics) and between manual vs. non-manual work. The quantitatively more relevant – medium-term – potentials lie in the automation of manual activities, in particular options to standardize labour processes within the framework of offsite component prefabrication (supported by computer-based precision). The supposedly job killer of additive manufacturing via 3D printing in (component) construction, which has been brought into play in the media, can also be discussed along this line of reasoning. But according to experts, it will only become more practically relevant in the more distant future.
Efficiency-enhancing software applications in construction work in a rather narrow definition should not unfold job-rationalizing effects so quickly. If, for example, BIM solutions with the most complete integration of building data in the planning, construction and operating phases become a success story, a timely risk lies less in the job-saving effects, but rather in the fact that differences between pioneers and laggards of digitalization at company level are likely to become bigger or that traditionally operating SMEs are being left behind.
More important than the risk of a significant reduction in sector employment through increased technology use is a frequently reported shortage of skilled workers in the construction industry, which mainly refers to young and well-trained professionals in apprenticeships. When we talk about the increasing use of digital technologies in the construction industry, it is because this is also an attempt to compensate for the lack of skilled workers.
Besides, the construction industry including the ancillary building trade is likely to be THE winner of more environmental and climate protection as well as the conversion of infrastructure towards decarbonization in the next two decades (e.g. thermal rehabilitation, expansion of photovoltaics, energy and material efficiency, but also clean-ups after extreme weather events, etc.).