India’s Unconventional Way Into Industrial Revolution 4.0 Through Construction

The world today is on the cusp of a major technology overhaul, the “Industrial Revolution 4.0” (IR4), with the advent of technologies such as artificial intelligence (AI), 3D printing, Internet of Things (IOT), and quantum computing. These advances promise to fundamentally alter the way we live, work, and interact as a society.

Specifically in the industry and construction space, IR4 is offering to bring together mechanical systems, which can perform harder and repetitive physical tasks, and digital systems, which can carry out complex cognitive tasks. When these two forces are put together, we can not only do complex physical tasks but constantly self-learn new and efficient patterns of going about work.

When this is applied in the context of the architecture, engineering, and construction industry, it is called “construction 4.0”. This is already changing the structure of the economy and labour market, and it has brought several societal anxieties to surface, especially the anxiety of “technological unemployment” and “end of work”.

It is believed that jobs will be taken over by automation and large populations will be left unemployed, or become the “useless class”, as historian and author Yuval Noah Harari describes it, further spurring mass social and political repercussions.

However, observing the current trends of development in comparison with previous industrial revolutions, we see some fundamental patterns in how the nexus of technology, society, work, and polity have interacted in the previous periods of disruption.

Society’s first impressions of new technology depend on how beneficial it is to them at that point in time or at least in the short term, or else a more rebellious stance is adopted.

As seen in the first industrial revolution in Britain, the machines introduced were “labour-replacing” in nature, which automated jobs, reduced wages, and diminished employment prospects and living standards of factory workers. But over the next few decades, the tides turned. The benefits of industrial revolution percolated to workers in the form of higher wages, better employment and living conditions, and political rights.

The point is, the initial phase of transition during a technological disruption may well be uneasy, but soon its fruits will percolate down to the labour. In addition, technology improves production, lowers costs, and increases consumption, therefore improving the purchasing power and living standards.

But the more appealing argument is that new technology brings creative destruction. Combined with the entrepreneurial spirit, it gives rise to new products and services, new sectors that will generate new jobs as well as labour with new skill sets, thereby introducing a fundamental structural change in the economy, labour market, and consumption basket.

Most of the scientific literature tends to subscribe to this idea, suggesting we may be in such a phase of transition, disregarding the ideas of “technological unemployment” and “end of work” generally exaggerated by commentators and journalists.

India’s march to industrial revolution 4.0

While India today is claiming that it will be a leading participant in IR4, a closer look at the state of technology adoption in India and the prerequisites for the Indian economy to accelerate automation provides a better picture.

India is also claiming to do this process unconventionally – to leap into the post-industrial economy of AI, 3D printing, IOT, and quantum computing without having to go through the industrialisation stage.

The prerequisites for any economy to adopt automation technologies is to have a state whose economic ideology leans towards competition in the global economic system and labour that is expensive. The latter incentivises companies to innovate and adopt new automation technologies, but the “expensive labour force” should be highly skilled to innovate or even to handle and operate adopted technologies.

Does the Indian state’s economic ideology and labour force satisfy the prerequisites to provide an optimum environment for automation technologies?

To understand that, we first need to know where the Indian labour force and capital is put to work and how productive it is.

Chart 1: Employment growth in India by major sectors (1980-2016); Source: Compiled from KLEMS 2018 data, RBI

Chart 1: Employment growth in India by major sectors (1980-2016); Source: Compiled from KLEMS 2018 data, RBI
Chart 2: Growth of gross output of major sectors (1980-2016); Source: Compiled from KLEMS 2018 data, RBI

Chart 2: Growth of gross output of major sectors (1980-2016); Source: Compiled from KLEMS 2018 data, RBI

The two charts indicate the salient features of the Indian economy, its labour force, and its transition patterns. India’s labour is largely agrarian and rural; however, the Indian economy is urban. So while agriculture employs the largest share of labour and produces the lowest share of output, most of the economic output comes from services and manufacturing.

But the important point to note from the charts is, Indian labour is de-agrarianising rapidly since the 2000s, i.e., moving out of agriculture and into services and construction. This labour is getting urbanised. While very little to none of this labour is absorbed into manufacturing, since it demands high-skilled labour (whereas de-agrarianised labour is unskilled or semi-skilled), manufacturing is already a capital-intensive sector.

Moreover, Indian manufacturing is underdeveloped when compared to its contemporaries in the global economic system. So, the next industrial advancement via the conventional way of manufacturing seems unlikely for India.

The unconventional way to march into the next technological period is possible through construction. This is based on the assumption that technology in the construction sector behaves in a labour-augmenting way, unlike the labour-replacing nature of automation in manufacturing.

The sector has the potential to adopt new technologies while absorbing unskilled and semi-skilled labour and, most importantly, has enough demand to supply for, which can generate economic growth and jobs in the short term. In the long term, it can provide higher wages, create a spillover effect in other sectors, generate high-skilled jobs in construction, and broadly incentivise advanced technology adoption of the likes of AI, 3D printing, and industrial internet of things.

But as it stands today, construction in India has been left far behind in not just adopting new technologies but in realising the urgency to catch up with the rest of the world to have a competitive edge. Literature on construction and project management studies in India suggest that in the practices of Indian construction industry, build quality, timely delivery, and maintenance are far from meeting any standards. The reasons attributed are poorly skilled labour, lack of construction standardisation, and law and contract enforcement challenges.

However, recent studies suggest automation in construction as a solution to these problems. Studies show that the adoption of technologies that already exist in the manufacturing sector in India can increase profits by 52 per cent, save time by 58 per cent, and reduce costs incurred from scrap and rework by 67 per cent on a project-by-project basis.

A closer look at the construction process shows how technology doesn’t behave as a homogenous entity in construction. Construction is generally trifurcated into three stages based on operation, planning and design, and execution and maintenance. At each stage, technology interacts differently with labour.

  • Design and planning: This stage employs high-skilled labour, such as conceptual designers, architects, planners, and engineers, and adoption of technologies such as modelling, BIM, and virtual reality. It further augments labour productivity and enhances creativity
  • Execution: This stage employs mixed pools of labour – high-skilled labour in the form of construction managers and engineers, but also mid-skilled and low-skilled labour, such as supervisors, construction labourers, and masons. Adopting technologies in this step may reduce the labour demand for simple tasks, but augment labour in doing complex tasks in a better, easier, and safer way, which improves build quality, saves time, and reduces rework and material waste.
  • Maintenance: This stage employs mid-skilled labour such as general maintenance, electricians, and repair men. Adoption of technologies in this stage augments labour.

While there are technological developments occurring on multiple fronts, we haven’t yet come up with machines that can defeat humans at their agility, ability to solve problems in a case-by-case approach, and exhibit social intelligence. These abilities are of prime importance on a construction site, so human ingenuity is not completely replaceable on a construction site.

However, new innovations that tend to combine human “biological big data” and IIoT may well challenge the assumption in the future.

Exoskeleton-like technologies that enhance the labour’s potential exponentially (super-charged labour) by combining human “biological big data” and augmented with IIoT to increase labour’s physical strength, precision, and productivity, can result in superior labour.

These technologies, although still futuristic for construction, are gaining attention now. They have the potential of closing the gap to humans in their agility at even larger scales than humans can handle, and these developments are not far from reality.

Recently, a German company called German Bionic has developed an exoskeleton called Cray X, which the company calls a “self-learning power suit”. It has already received $20 million (roughly Rs 1.4 billion) in funding from Samsung and has a list of customers.

Indian construction should grow a long way in catching up to these developments.

For now, immediate and huge unattended potential in Indian construction lies in the “design and planning” phase. Here, technology adoption is easier since it will be adopted for operation by high-skilled labour unlike in the execution and maintenance phase, where relative technology will be adopted by low- and mid-skilled labour.

Autodesk chief executive Andrew Anagnost has indicated something similar. Indian construction has taken longer to adopt new technologies. The sector suffers from frequent miscommunications and workflow disruption leading to delays and cost overruns. Automation can improve things here.

Coming back to India’s claim of being a leading participant in the new industrial revolution, we are far from being able to adopt even the current technologies. Challenges that prevent India from advancing in technology adoption and innovation are fundamental in nature and comprise multiple factors.

First off, Indian polity and policy making have to realise that India is claiming to leap from an agrarian economy to an advanced industrial economy by skipping industrialisation or the societal engineering that occurs through industrialisation. In other words, India doesn’t have stronger institutions, better law enforcement, and skilled labour that are often byproducts of industrialisation

However, it is not that India cannot achieve it. It can move into IR4 beginning with the construction industry, but this needs massive resource and labour mobilisation, from agriculture to infrastructure and from rural to urban, along with large-scale skilling of labour and technology adoption and introduction of necessary reforms related to land acquisition. Liberalising infrastructure norms and practices will also be important.

These improvements will lead to economic growth, employment generation, value addition, and ease of doing business for existing service and manufacturing industries in the short term. Reforms will strengthen institutions, rule of law, and enforcement. Overall, there will be better national and urban infrastructure, a spillover effect to other industries, and in the medium-to-long term, this will incentivise the adoption of advanced construction technologies.

This unconventional way forward for India into IR4 through construction, unlike the conventional way through manufacturing, may be less disruptive and less painful in terms of human life, political and environmental costs, which typically come as a result of industrialisation.

As optimistic as one may be of the new industrial revolution, the immediate technology adoption discourse may well enjoy hypothetical standards, as it is ridden with poor ambition and vision of technology and future.