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Project Management

Digital Technology and Construction Industry

  • Introduction

The construction industry is a complex and crucial sector on a global scale, with a market projected to reach $15 trillion within three years and continue growing at a yearly rate of around 3% through 2025. In Malaysia, the construction industry accounts for 10% of all employment, providing over 1.38 million jobs, and is valued at over RM 27.7 billion. Digital technology (DT) is increasingly recognized as an essential component of construction management, offering significant benefits to assist intricate industries. This literature review aims to explore and evaluate the existing research on Digital Technology Capabilities (DTC) in the construction industry, focusing on key themes, agreements, debates, research gaps, methodologies, and critical insights. This review will examine DTC within the specific focus areas of procurement, logistics, construction, and marketing within the construction lifecycle.

  • Main Themes in Digital Technology Capabilities

The sources highlight several key themes related to digital technology capabilities, categorized into four main elements: emerging technologies, automation, connectivity, and digital access.

  • Emerging Technologies:
  • Emerging technologies encompass innovations such as the Internet of Things (IoT), Artificial Intelligence (AI), and Blockchain. These technologies are rapidly transforming various sectors, including construction.
  • The adoption of these technologies has a significant impact on productivity, enabling more efficient project management and risk analysis. For example, AI can be used for predictive analysis to identify potential project risks, and IoT can be used to monitor site conditions in real-time.
  • Automation Technologies:
  • Automation technologies include robotic process automation, 3D printing, and Augmented Reality (AR)/Virtual Reality (VR) applications. These technologies play a crucial role in automating tasks and reducing errors on construction sites.
  • The use of robotics in construction can streamline repetitive tasks, while 3D printing offers opportunities for creating customized building components, and AR/VR allows for improved visualization of project plans.
  • Connectivity Technologies:
  • Connectivity technologies focus on improving communication and data management through tools like data collection apps, digital sensors, messaging platforms, and cloud storage.
  • These technologies enable real-time monitoring of project progress, enhance collaboration among project stakeholders, and ensure data accessibility and security. For example, cloud-based storage is more effective than server storage due to reduced risk of data loss.
  • Digital Access Technologies:
  • Digital access technologies encompass various software and tools aimed at improving project management and information sharing, such as integration software, scheduling software, Building Information Modeling (BIM) software and other modeling software.
  • These technologies facilitate seamless project planning, enhance collaboration among project teams, and improve the overall efficiency of the construction process. BIM, for instance, allows for better visualization and coordination of construction projects.
  • Digitalization vs. Digital Transformation
  • Digitalization involves connecting people, devices, and data using DT to improve business processes, while digital transformation implies a fundamental change in how firms approach their work and respond to digital trends.
  • The sources emphasize that digitalization should be viewed as a continuous process for growth and development. It is a move from a legacy perspective and increased corporate integration of IT and organizational innovation is essential for digital proficiency in the new era of business.

III. Points of Agreement and Debate

The reviewed sources reveal several points of agreement and debate within the research on DTC in the construction industry.

  • Agreements:
  • There is a consensus on the necessity of DT for improving efficiency, productivity, and competitiveness in the construction industry. The adoption of DT is seen as vital for ensuring high profits in construction businesses.
  • The sources also agree on the importance of a mutual digital mindset and skillset among leaders and managers, highlighting its significant impact on an organization's ability to embrace digital transformation.
  • The resource-based view (RBV) theory is widely accepted as a valuable framework for identifying strategic DT capabilities that can provide a sustained competitive edge. The RBV theory promotes tangible and intangible DT resources as enablers of organizational innovation.
  • Debates/Gaps:
  • A significant gap exists in the lack of comprehensive assessments on the adoption of DT and its significance in the construction industry. There is no reliable source to establish the significance of a construction firm, and the extent of technology application as a competitive advantage remains uncertain.
  • Limited research has been conducted on the performance of DTC in the construction management lifecycle. The body of research focuses mostly on education, healthcare, and governmental institutions and there are very few studies that specifically address DTC applicable in procurement, logistics, construction, and marketing in the construction business.
  • The slow pace of digital transformation in the construction industry compared to other sectors is also a point of concern. The fragmentation of the industry is often cited as a barrier to a more streamlined digital transition.
  • There is debate about whether digital transformation should be approached from a technology-oriented or a people-oriented perspective. While previous research should investigate digital transformation from a technology-oriented perspective, there is not much study on utilizing DT.
  • The sources point to the varied results of DT implementation based on how an organization responds to digitalization.
  • There is a need to address the gap in understanding DTC from an internal perspective as opposed to what the literature identifies externally at top management levels.
  • More research is needed on the automation element to provide a deeper awareness of adopting DT in the construction industry.
  • Research is needed to explore different points of view among small-medium enterprises (SMEs) and multi-national corporations (MNCs).
  • The literature calls for more research into the technical aspects of a successful digitalization.
  • Methodologies Used in the Studies

The reviewed studies predominantly use quantitative methodologies to explore DTC in the construction industry.

  • Quantitative Approach:
  • The primary method for data collection is the use of questionnaires with dual Likert scales, which measure both the importance and performance of various DTCs. Participants rate the importance of each technology (1 = strongly not important to 5 = strongly important) and its implementation (1 = strongly disagree to 5 = strongly agree).
  • Ranking Analysis (RA) and Important-Performance Analysis (IPA) are applied to assess the implementation and importance of DT in the construction industry. The IPA grid is divided into four quadrants: Concentrate Here, Keep Up the Good Work, Low Priority, and Possible Overkill, allowing for a strategic assessment of DT implementation.
  • Statistical techniques such as Pearson correlation and factor analysis are used to validate the data and ensure its reliability.
  • A stratified random sampling approach is adopted to collect data from various construction professionals from developer, consultant and contractor firms listed in relevant boards and professional associations.
  • Resource-Based View Theory (RBV):
  • The RBV theory is a critical framework used to classify tangible and intangible DT resources in order to determine competitive advantages. This theory helps to identify the strategic DT capabilities that organizations can leverage to gain a sustained competitive edge.
  • Development in the Field Over Time

The field of DT in construction has evolved significantly over time.

  • Evolution of DT in construction:
  • There has been a shift from conventional digital practices to mutual digital practices, with the emergence of new technologies for faster, safer, and more effective decision-making. For example, cloud-based storage is favored over server storage due to the risk of data loss with servers.
  • The introduction of cutting-edge technologies like robotics and automated tasks marks a significant move towards the expansion of digitalization beyond routine tasks.
  • There has been an increasing use of cloud-based storage, BIM, and other advanced technologies to enhance project management.
  • There is a growing emphasis on Industry 4.0 and the need for digital proficiency among construction professionals.
  • Growing recognition of the need for digital transformation:
  • There is a growing recognition of the need for digital transformation in construction to improve efficiency, reduce costs, and increase productivity.
  • There is a call for more research into the technical aspects of a successful digitalization.
  • Critical Insights

The reviewed sources provide several critical insights into the implementation and impact of DTC in the construction industry.

  • Alignment of Research:
  • Most studies consistently emphasize the necessity of digital transformation in the construction industry and agree on its benefits for efficiency and productivity.
  • Divergence in Context:
  • There are differences in focus, with some studies concentrating on specific technologies while others examine broader implementation strategies.
  • Different studies approach digitalization from varied perspectives, which highlight the need to address different points of view on implementation.
  • Insights:
  • The importance of prioritizing connectivity and digital access technologies such as real-time information, cloud storage, teleconferencing, and BIM is highlighted. These technologies are widely used and seen as crucial for improving communication and project management.
  • There is a need to improve the adoption and implementation of emerging technologies and automation in the construction industry, especially for SMEs. There is a low adoption of technologies such as robotic process, additive manufacturing, and AI due to high capital and the need for specialized digital skills.
  • It is necessary to address the gaps between the importance and performance of certain DTs to enhance return on investment. The IPA analysis reveals that certain technologies, like productivity software, are considered important but are underperforming, indicating a need for better implementation strategies.
  • There is a necessity for government support through policy changes, incentives, and education to promote digitalization in the construction industry. The government needs to ensure accessibility to computer gear and software at a reduced cost, and provide incentives and support programs.

VII. Conclusion

This literature review has synthesized existing research on digital technology capabilities in the construction industry, revealing key themes, points of agreement and debate, methodologies, developments, and critical insights. The importance of DTC is clear in the construction industry, but there is a need to address the implementation of emerging technologies and automation, especially for small-medium enterprises. Prioritizing connectivity and digital access technologies is important for improving communication and project management. The need for further research and a focus on the technical aspects of a successful digitalization, particularly in automation, and the practical application of existing technologies cannot be understated. Further research should focus on comparative studies between SMEs and MNCs and investigate the effects of digitalization on project outcomes. Moreover, the government plays a crucial role in supporting the digitalization of the industry through policy changes, incentives, and education

(Johari et al., 2025)

Reference:

Johari, M. S., Mahmud, S. H., Mohamed, S. F., Misnan, M. S., Kamarudin, T., Dzahir, M. A. M., & Utama, W. P. (2025). Digitalization: Potentials of Digital Technology Capabilities in the Construction Industry. Journal of Advanced Research in Applied Sciences and Engineering Technology, 50(1), 136–150. https://doi.org/10.37934/araset.50.1.136150

  • What is the current state of digitalization in the Malaysian construction industry?

The Malaysian construction industry is undergoing a digital transformation, but it's happening slower compared to other sectors like finance and healthcare. While there is an awareness of digitalization and its benefits, the industry is characterized by fragmentation, hindering a streamlined digital transition. Emerging technologies, connectivity, and digital access are gaining traction, but the adoption of automation remains limited. There's a notable gap between recognizing the potential of digital technologies and their actual implementation in daily operations.

  • What are the key digital technology capabilities (DTC) that are important for construction firms?

The study identifies four key elements of DTC: emerging technology (like AI, blockchain, IoT), digital automation (robotics, 3D printing), connectivity (data collection apps, cloud storage), and digital access (integration software, BIM, real-time information). These capabilities are crucial for improving project management across procurement, logistics, construction, and marketing. The effectiveness of these technologies vary, with connectivity tools seeing the highest adoption rates.

  • How does the Resource-Based View (RBV) theory apply to digital technology in construction?

The RBV theory suggests that firms gain a competitive advantage by leveraging their resources, both tangible and intangible. In construction, digital technology is considered a valuable resource that, when effectively implemented, can drive innovation, enhance productivity, and improve decision-making. Firms that possess superior DTC can gain a sustainable competitive edge.

  • Which digital technologies are most used and considered important in the Malaysian construction industry?

The study found that real-time information, cloud storage, teleconferencing, messaging, and closed source software are among the most frequently implemented and crucial technologies. These tools are vital for communication, data management, and remote work. Other important tools include near real-time systems, IoT, and digital sensors. Technologies like drones and scheduling software are also seen as important, but their implementation rates are slightly lower.

  • What are the barriers to digital transformation in the Malaysian construction industry?

The study highlights a few key barriers, including a slower pace of digital transformation compared to other industries due to fragmentation, the limited adoption of automation technologies which requires significant capital investment, and the lack of sufficient understanding on how to utilize DT to its full potential. There's also a gap in applying advanced technologies requiring specialized digital skill expertise.

  • What are the areas that Malaysian construction firms should focus on to improve their digital capabilities?

Based on the Important-Performance Analysis (IPA), construction firms should concentrate their efforts on areas where technology is highly important but performance is lacking, for example productivity software and data collection apps. They should keep up the good work with widely adopted technologies like real-time information, cloud storage, and teleconferencing. Areas classified as low priority, like AR/VR, AI and robotics, should receive less focus, while possible overkill items (like overly complex integration softwares) may be unnecessary.

  • How can the government support the digitalization of the Malaysian construction industry?

The study recommends that the Malaysian government should revise its current digital policy and strategy to encourage the use of DTC in the construction industry. This could include measures like reducing taxes on imported modular building supplies, providing incentives for software development, and expanding technical education opportunities for digital construction management. Government should develop programs with incentives, training and support to ensure a more widespread and effective use of these capabilities.

  • What are the limitations of this study and what future research is needed?

The study's limitations include its focus on Malaysian construction firms, using a limited number of DTC items, and the lack of an overall view of construction projects from pre-construction, to construction, to post-construction phase. Future research should explore other perspectives like small-medium enterprise vs multi-national corporations to compare differences in digital adoption, study other stages of the construction process, and have a focus on each construct of DTC, to give more thorough awareness of the technology interest in the construction industry to improve the productivity of project management. In addition, this study was quantitative in nature; a follow-up qualitative study would provide further depth to these results