The Meeting Point of Training and Technology in the Construction Sector

Investment in professional training and new technologies can boost productivity and safety in the construction industry, says Shay Biran, CEO of the Israeli Fund for the Promotion of the Construction Industry. However, unlike other industries, in construction, employment is often project-based, and projects are fragmented and sub-contracted. The general contractor has no incentive to invest in workers' training because they are not his employees. The sub-contractor has no incentive because of short-term employment periods, low retention rates, and workload volatility.

The labor structure in the construction sector leads to a structural disincentive for contractors to invest in workers' training or be the first to test out new technologies. This lack of investment is a market failure that creates a phenomenon of skill shortage, leading to low quality, low productivity, high accident rates, and prolonged construction schedules. According to Biran, technology can offset skill shortage and its consequences, as it can create new high-quality jobs, increase productivity, and contribute to safety and health in the industry.

To solve this market failure and introduce more innovation, sectoral institutions can act as accelerators. They can act as sectoral incubators (like ConTech); sectoral venture capitals with expertise in construction tech; sectoral "sandboxes" for training and technology experimentation; and sectoral training centers developing simulators, online training, and other solutions. Countries with functioning sectoral institutions will be more attractive to global investors in construction tech, concludes Biran.

Shay Biran spoke at our Construction 4.0 conference in July 2021