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Where Does the Real Potential Lie for AI in Norway's Largest Mainland Industry?

The real estate and construction industry is struggling with rising costs, declining productivity, and a significant environmental impact. Can artificial intelligence (AI) help to streamline processes, improve projects, and create more sustainability? Part of the AI debate focuses on the fear of (or desire for) replacing knowledge-intensive jobs. But if AI is to be the key to ensuring competitiveness, it cannot first and foremost be about replacing jobs - but about shifting focus to where the effects are greatest.

The Potential

Let's visualize a construction project worth 100 million NOK. Suppose 15% of the total development cost is dedicated to upstream knowledge-intensive work, such as planning, analysis, design, project management, etc. It is not very controversial to estimate that AI can automate 20% of these tasks. But let's try a more aggressive hypothesis and assume that AI can automate up to 50%. Here it would correspond to the order of 6000 hours…

The real estate and construction industry has a complex value chain and delivers complex products (buildings). It is not uncommon to involve 15-20 specialized disciplines in development and management. In addition, there are contractors and suppliers that actually produce. In such a landscape, it is precisely AI's ability to analyze large amounts of data that can be the key to optimizing processes, predicting outcomes, and making smarter decisions. Think of the possibilities with tools that predict potential project risks before they arise, optimize material usage, suggest circular strategies, or streamline communication between stakeholders.

International studies indicate that 96% of project data is not reused. There is great variation, but as complexity increases, this underlines a major challenge with structured learning. The lack of access to structured data is perhaps the industry's biggest challenge for scaled use of AI. Nevertheless, AI can already write draft contracts, analyze property data, generate designs, ideas, and solution proposals. And the development is rapid. But in all known examples, it is only when skilled professionals assess the results and implement them in relation to the different needs that the major effects are seen. Then the solutions free up time from boring, repetitive tasks, to time and focus on what humans do the best.

The Needs

Cross-industry research shows that to truly improve process and project implementation, more time should be invested in upstream planning, not less. An assumption that hours saved through automation should be directly cut must therefore be considered wrong, but rather interpreted as a need for a shift in tasks. In a future scenario where routine tasks and experience gathering are handled by AI, professionals will have more time to focus on the big picture. Project developers can invest more in understanding user needs, architects and engineers can create future-oriented and flexible solutions, contractors can optimize the construction process. A study by Oxford Economics showed a potential for increased productivity of as much as 40% by implementing AI. To unleash this potential, highly skilled labor must focus on the major challenges facing the industry, such as reuse, carbon emissions, resource efficiency and land use. Imagine what can be created with 6000 hours from a single project!

The innovation potential is indeed great, and a quick look at the biggest risks and cost drivers shows why. For example, AI will be able to; analyze historical case and project information to identify potential discrepancies and obstacles before regulatory processes become frustrating; Warn of changes in local conditions to reduce uncertainty related to ground conditions; Assist with emission reduction by optimizing the design and composition of the climate villain concrete; Forecast demand or market trends for steel; Optimize technical installations for up to 30% reduction in energy consumption; or optimize logistics on the construction site to prevent delays and increase safety.

Focus on Effect

There is no shortage of both practical and ethical issues related to the implementation of AI. And trust in such systems is absolutely crucial, especially when it comes to building the homes we live in and the infrastructure we rely on. It is therefore important to remember that AI must be contextualized, understood and controlled, so that the results are created in interaction with the human ability for critical thinking, ethical assessments and accountability.

A large proportion of today's processes in construction and property need optimization. And we need to build better, smarter and more sustainably. AI gives us the opportunity to innovate more and faster than ever before. The prerequisite is that we are curious and willing to change both business models and work processes. But first and foremost, the industry must invest more in creating the new solutions, and at the same time show the ability to strategically reinvest the saved time where the effects will actually be greatest.