The Bouygues group is a large, diversified company in the construction industry who regularly win contracts for many high-profile civil and commercial construction projects around the globe, including large underground tunnels, bridges, high-rises, hospitals, and major highways. They recently partnered with the University of Nantes to produce one of the first ever houses using additive manufacturing. I believe this was an excellent partnership and is an example of what they and other large construction companies should increasingly do to remain competitive into the future.
Why might additive manufacturing relevant to the construction industry?
Additive manufacturing (AM) has been adopted in many applications in architecture and design, but the construction industry has yet to see huge strides using the technology. This does not mean, however, that the industry is not ripe with potential applications. According to some industry analysts, 3D printing is expected to disrupt the construction industry by the late 2020s by both lowering the turnaround time of construction and reducing the labor needed in a labor constrained market. But 3D printing is still in the very early days and limited to small-scale projects that have yet to be commercialized. One academic study comparing additive manufacturing to traditional pre-cast fabrication construction suggested that 3D printing may not actually be faster. So how relevant is AM to the construction industry?
According to a BCG report titled “Will 3D Printing Remodel the Construction Industry?” a compelling argument is made for the potential application of AM in construction. The report illustrates how the value proposition of 3D printing aligns closely with the challenges faced by the construction industry. For example, the construction industry has long been a tight margin industry, and one that is highly dependent on speed of delivery. The exhibit below further outlines how the characteristics of 3D printing align well with the construction industry.
What is Bouygues management doing to address the threat of additive manufacturing?
In 2016 Bouygues Construction added “Shared Innovation” as a new tagline for the company and shortly thereafter, in September 2017, the group partnered with the University of Nantes to produce one of the first ever houses using additive manufacturing (see photos below). As opposed to many other experimental homes produced using 3D printing which were limited to one or two bedrooms, the YHNOVA house was a five-bedroom, 95 square meter (1022 sqft) facility which will shortly have actual tenants. Despite this investment in a commercial application in the residential market, however, there is no additional evidence that Bouygues is investing in broader applications of AM in the various industries they play in, such as civil, industrial, and commercial markets.
What other opportunities in AM should Bouygues (and other large construction firms) consider?
There are two additional opportunities which the Bouygues management team, as well as other management teams of large established construction firms, should consider pursuing.
The first opportunity is to invest heavily in research and development internally of AM capabilities. This space is new and emerging, and large opportunities exist for any companies which are willing to make a commitment and advance the field. However, established firms often have difficulty “disrupting” themselves, and ideas that could threaten the established business need room to grow. For this reason, I would recommend they create a separate group to oversee and develop these applications. Establishing a separate division or even a separate company allows the business room to grow.
A second opportunity is to invest in startups who are pushing the frontier of additive manufacturing in the industry. For example, the leading manufacturer or homes in the U.S., D.R. Horton, recently participated in a $9M series A round for ICON – a Texas based firm developing AM technology for the construction industry. Because the technology is so new, an investment strategy is an excellent way to place bets in promising new technology in the sector.
Key questions moving forward
- Is it realistic to expect that additive manufacturing can disrupt the construction industry?
- Should established construction companies invest in internal R&D, or should they simply bring the capabilities internally once the technology is proven (either through acquisitions or hiring talent)? What are the tradeoffs of the two approaches?
 Krimi, I., Lafhaj, Z., & Ducoulombier, L. (2017). Prospective study on the integration of additive manufacturing to building industry—Case of a French construction company. Additive Manufacturing, 16, 107-114.