Conventional Business Models May Collapse, as Sustainability and Advanced Technologies Disrupt Building Construction

Frost & Sullivan's recent analysis, Business Model Innovations in the Building Construction Industry, 2020, finds that the building construction value chain will shift from sequential (conventional value chain) to innovative business models with increased penetration of building construction technology. With rapid urbanization and suburban development in Asia-Pacific (APAC), the construction market in the region is expected to reach $14 trillion by 2021 from $10 trillion in 2017. However, the market will be impacted by COVID-19. In a conservative scenario, there will be a long delay in the completion of projects in the commercial segment; in an aspirational scenario, there would be a short delay in the completion of ongoing projects until the COVID-19 pandemic subsides.

"APAC is expected to witness an infrastructure and construction boom in the next five years with a healthy distribution of projects shared between the residential, industrial, and infrastructural segments," said Wen Hui Liu, Energy & Environment Research Analyst at Frost & Sullivan. "Additionally, in this period, innovative business models such as vertical integration, anything-as-a-service (XaaS), and off-site construction will be impacting traditional building construction business in the region."