Navigating the Digital Transformation in India's Construction Industry

Economic Growth and Construction Boom

India is currently witnessing a robust growth in its construction industry, spurred by significant urbanization trends and a strong economic outlook. According to Autodesk's "State of Digital Adoption in Construction 2024" report, the country's economy is projected to grow by an impressive 6.9% in 2024, with construction sector revenues forecasted to increase by 17% over the next year. This paints a promising picture for the industry, but it's the digital transformation underway that truly sets the stage for a revolutionary leap forward.

Leading in Technology Adoption

Indian businesses are leading the charge in technology adoption, investing a substantial 28% of business expenditure in new technologies. This places India ahead of other markets such as Australia, Japan, and Singapore in terms of digital adoption. Mobile apps, construction wearables, and prefab and modular construction are among the top technologies being adopted, which reflects the industry's commitment to leveraging digital tools for efficiency and growth. For example, Eversendai recently utilized BIM technology to deliver the complex 'Statue of Unity' project two months ahead of schedule, with engineers assessing the efficiency gain from BIM at close to 25%.

Challenges in the Digital Journey

However, this journey is not without challenges. "The core philosophy of our technology implementation has been that it needs to be easily adaptable and scalable. We don’t believe in technology shopping because every now and then, a new technology comes on the block, and people run behind it. Instead, our philosophy has been that you identify a technology that solves the problems you are currently facing," says Sagar Gandhi, Head of Strategy and Business Excellence at Shapoorji Pallonji E&C.

Addressing the Skills Gap

A major hurdle highlighted in the report is the lack of skills, particularly in areas such as AI, machine learning, BIM, and cybersecurity. But Indian businesses are not letting this barrier slow them down. In fact, 90% of businesses are actively upskilling their existing workforce, and 86% are bringing in new talent to bridge the skill gap. These efforts are crucial as AI and machine learning have the largest technical skills gaps for businesses within the industry, with almost two in five businesses experiencing a skills gap in this area. This was more common than skills gaps in BIM, data analytics, and construction management software.

Revenue Development Potential

In terms of revenue growth, while businesses across all surveyed countries are expecting a median growth of 10%, actual revenue growth over FY23 was 13%. This demonstrates the potential for growth in the construction industry, especially when coupled with digital transformation efforts. The adoption of one additional technology was found to lead to a 0.75% increase in the share of total projects delivered under budget and a 0.5% increase in the share of projects delivered on time, after accounting for a business’ size, years in operation, and location.

Overcoming Barriers to Digital Adoption

Realizing the benefits of digital technology will require overcoming a number of barriers to adoption, with 94% of businesses experiencing a barrier to adopting digital technology in their business. The three most common barriers that businesses need to overcome are:

  1. A lack of digital skills among employees, cited by 42% of businesses. This barrier is more likely to impact large businesses and was the most common barrier to digital adoption in the 2023 report as well, demonstrating the persistence and prevalence of this issue.
  2. Technology being too expensive, which was the second most highlighted barrier this year, consistent with a high inflationary environment.
  3. A lack of budget allocated to technology, cited by 34% of businesses.

Addressing these barriers while maintaining business operations is a daunting challenge for the industry. In order to help address these challenges and successfully integrate digital technology into the business, this report identifies five key priority actions for the construction industry:

  1. Start small by piloting projects and account for change management costs when scaling up to increase the likelihood of successful digital transformation.
  2. Select champions of tech transformation in your business. These champions are key to keeping motivation high when fully implementing a new solution.
  3. Track a range of measures of success when it comes to digital adoption. This should include traditional metrics like efficiency and avoided costs alongside employee use and satisfaction.
  4. Build the digital ecosystem, including other industry members and trusted partners to support your digital journey to help find the right solutions and best practices.
  5. Ask whether your business is AI-ready in terms of both skills and data systems and architecture.

The Growing Importance of AI

The report also emphasizes the growing importance of AI for construction. Generative AI is expected to become as pervasive in the construction and engineering industry as foundational technologies like data analytics and mobile apps. Over 80% of businesses believe they received strong business returns or a positive return on investment from implementing technologies like data analytics, mobile apps, robotics, prefab and modular construction, and construction management software.

Embracing the Digital Future

The Indian construction industry stands at a pivotal juncture. The digital transformation underway promises significant rewards for those who can successfully navigate the challenges it presents. As Gandhi puts it, "The largest uplift in value will come from a comprehensive end-to-end solution."

For more information, read the full State of Digital Adoption in Construction 2024 report.

Sasha Menon

Regional Content Marketing Manager, Autodesk
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