The economic impact of construction on Hong Kong’s economy has increased in recent years: 2016 saw construction comprise 5.2% of Hong Kong’s Gross Domestic Product (GDP), a 73% increase on ten years earlier. The number of construction sites also ramped up in the 10 years from 2008 to 2018, with almost 1,500 construction sites in place in Hong Kong by mid-2018, up almost 50% on 2008. Digital technologies are playing an increasingly important part in that growth and changing the face of the city’s construction sector.
What has been happening in HK’s construction industry?
Several different trends have affected Hong Kong’s construction industry over the past decade. The Hong Kong government has taken an active role, investing in both infrastructure and residential construction projects. Flagship programs like the Long-Term Housing Strategy (LTHS), Climate Action Plan 2030, Railway Development Strategy (RDS) and Hospital Development Program are all expected to contribute to the growth of the construction industry.
Energy saving has become a focus, too, with then-Chief Secretary for the Administration (and now Chief Executive) Carrie Lam saying, “The Energy Saving Plan sets Hong Kong a target for reducing energy intensity by 40% by 2025.” This move towards being more energy efficient falls under the umbrella of Hong Kong’s Smart City Blueprint, a scheme introduced in 2017. This aims at shifting the city towards a more connected and digitized infrastructure and future.
These trends come on the back of a generally changing city, with demographics, lifestyle and workforce all changing profoundly in the digital era. Younger citizens are entering the workforce and bringing their digital-first mentality with them. They have different expectations than their elders: co-working and co-living spaces are normal to them, and they expect offices and homes to be smart and to fit their always-on lifestyles. Similarly, mobile working or remote working is second nature to them.
What challenges are in play?
More demanding and expectant citizens expect more control of their environments. They are products of the data-centric era and expect that data to inform the kind of services they can access. Tenants, both residential and commercial, want new buildings to offer more control over facilities, climate and lighting control. This can be for environmental purposes, or video surveillance and access control to enhance security, for example.
How does digital deliver this?
To become a smart city that benefits all residents, Hong Kong’s construction industry must embrace digital solutions. Building information modeling (BIM) is one such approach that is already in place, with major projects from MTR Corp and Hong Kong’s Airport Authority already underway. Hong Kong also introduced the Construction Industry Council (CIC) BIM Standards in 2019, which encourages BIM usage and gives stakeholders the chance to manage and assess BIM deliverables by architects, engineers, surveyors and contractors.
But BIM is only one approach. At Orange, we believe that the construction industry benefits from the same data journey approach as any other industry. This is what the Orange Internet of Enterprises approach and positioning as a network-centric, digital services company is about.
Data in the construction industry covers a lot of areas: from building management to property management, energy management to energy analysis and more. And further to that, you have to remember that some buildings are old, some are new. Traditionally, building management companies operated using proprietary systems – which meant only they possessed the data from their various buildings. What the industry needs is a solution that can pull all that data together, analyze it, and make it useful.
This can be done by data-tagging all the data from these various buildings, sending it to a data lake, and making it common use. It can then be used for energy management or other purposes. Orange has the expertise to help building management companies pull all this data together using our AI solution to digitize and aggregate it all. Building management companies need the help, because with numerous buildings of different types and ages, they simply can’t implement a digital building management system (BMS) on them all if they don’t have all the data.
The power of ecosystem thinking
After you have digitized and aggregated all your legacy data, you need to make good use of it. And that means digitizing legacy systems and platforms to drive insights and outcomes from all your gathered data. That, too, requires the right expertise, which means the right partners with the right skills and experience.
Orange has developed a holistic approach that builds on the more-than-the-sum-of-its-parts makeup of our digital ecosystem. Our ecosystem brings together industry experts like Australasia IoT specialist GHD and leading APAC engineering group ATAL, alongside world-leading technology providers like Microsoft, Cisco and cybersecurity specialist Fortinet. These companies are complemented by cutting-edge digital innovators like Dynatrace and UiPath, and niche disruptive technology companies like Abeja, a construction industry AI and deep learning specialist, and Optix, a co-working space provider.
These types of partner are all focused on solving specific industry problems and use cases. Orange operates as the conduit in the ecosystem through our digital business consultants and technology experts, to orchestrate and integrate the assorted data and digital solutions into actionable insights that deliver tangible business value. We believe this ecosystem approach, which is at the heart of our Internet of Enterprises methodology, is how companies in Hong Kong’s construction space will flourish.
Data and digital power construction today and tomorrow
Hong Kong has ambitious plans in place. In 2018, two huge construction projects, the Hong Kong-Zhuhai-Macau Bridge, a BIM-powered initiative, and the Guangzhou-Shenzhen-Hong Kong Express Rail Link, both opened. There are a number of other large-scale projects in the pipeline.
By using data and digital tools, construction in Hong Kong has a big opportunity to thrive, and construction companies recognize that fact. In a survey by KPMG, some 95% of them said emerging technologies will fundamentally change their industry, while PwC reports 98% of industrial companies expect to increase efficiencies by up to 12% with digital technologies. Hong Kong’s construction sector must take note.
Edmund Yick is General Manager of Orange Business in Hong Kong and Taiwan. He is responsible for developing and managing the Orange Business portfolio of business solutions for multinational enterprises.
He has over 30 years of sales and management experience and is a Commerce and Business Administration graduate of the University of Toronto.