EG7020 ROLE OF TECHNOLOGY FOR SMALL AND MEDIUM ENTERPRISES IN THE CONSTRUCTION SECTOR
Introduction
The construction sector is an important industry that contributes significantly to the economy. Small and medium enterprises (SMEs) play a critical role in this sector, but they often face numerous challenges in terms of competitiveness and productivity. The adoption of technology can help SMEs in the construction sector to improve their performance, enhance collaboration, and reduce costs. This paper examines the role of technology for SMEs in the construction sector, exploring the benefits and challenges of technology adoption and providing recommendations for policymakers, industry associations, and technology providers to support the digital transformation of the construction industry.
Literature Review
The construction industry is one of the most significant contributors to the global economy, and small and medium-sized enterprises (SMEs) play a vital role in this sector. However, SMEs in the construction industry face numerous challenges, including limited resources, lack of expertise, and intense competition. To stay competitive, SMEs need to adopt technology to improve their efficiency, productivity, and profitability. In this literature review, we will explore the role of technology for SMEs in the construction sector and its impact on their business operations (Saka et.al, 2020).
Technology can help SMEs in the construction industry to automate tasks and reduce the reliance on manual labor. According to a study conducted by the National Institute of Standards and Technology (NIST), construction companies that adopted Building Information Modeling (BIM) software reduced labor costs by up to 25% and improved productivity by 30%. BIM is a digital representation of the physical and functional characteristics of a building, and it can be used to design, construct, and maintain buildings. BIM allows project teams to collaborate in real-time, reducing the risk of errors and delays, and improving project outcomes (Dey et.al, 2020).
In addition to BIM, other technologies such as drones, robots, and 3D printing can also help SMEs in the construction sector to automate tasks and reduce manual labor. Drones can be used for surveying, inspecting, and monitoring construction sites, improving safety and accuracy. Robots can be used for repetitive tasks such as bricklaying, reducing the reliance on manual labor and improving efficiency. 3D printing can be used to produce complex components on-site, reducing the need for transportation and storage (Müller, 2019).
Technology can also help SMEs in the construction sector to improve their communication and collaboration. With the rise of cloud-based technologies and mobile applications, project teams can easily communicate and collaborate with each other from anywhere, at any time. This helps to reduce miscommunication and delays in project delivery, leading to increased client satisfaction. In addition, virtual reality and augmented reality technologies can be used to create immersive environments for stakeholders to visualize and interact with construction projects, improving their understanding and engagement (Ghosh et.al, 2021).
Environmental sustainability is becoming increasingly important for SMEs in the construction industry, and technology can help them to reduce their environmental impact. According to a study conducted by the World Green Building Council, green buildings can reduce energy consumption by up to 50%, water consumption by up to 40%, and carbon emissions by up to 35%. Technologies such as energy-efficient lighting, heating, and cooling systems, and renewable energy sources can be used to achieve these goals.
Despite the benefits, SMEs in the construction industry face numerous barriers to adopting technology, including the high costs, lack of technical expertise, and resistance to change. A study conducted by the European Commission found that SMEs in the construction sector face significant challenges in adopting digital technologies, including lack of awareness, lack of access to finance, and limited availability of digital infrastructure (Stentoft et.al, 2021).
Methodology
This methodology section outlines the research approach, research philosophy, and data collection method used to explore the role of technology for small and medium enterprises in the construction sector.
Research Approach
The deductive research approach will be used in this study, which involves starting with a theory or hypothesis and testing it using empirical evidence. This approach will allow the researcher to establish causal relationships between variables and generate generalizable results. In this study, the hypothesis is that technology can improve the efficiency, productivity, and profitability of SMEs in the construction sector (Alzahrani, 2019).
Research Philosophy
The positivist research philosophy shall be used in this study, which assumes that knowledge is objective, measurable, and can be obtained through empirical evidence. This philosophy emphasizes the use of quantitative methods to collect and analyze data, and it assumes that there is a causal relationship between variables. In this study, the positivist philosophy was used to test the hypothesis that technology can improve the performance of SMEs in the construction sector (Eller et.al, 2020).
Data Collection Method
The secondary data collection method will be used in this study, that primarily involves analyzing existing data from published sources such as academic journals, books, reports, and online databases. This method is cost-effective and time-efficient and allows the researcher to access a large amount of data from various sources. In this study, secondary data was collected from academic journals, industry reports, and government publications to explore the role of technology for SMEs in the construction sector. The data was analyzed using a content analysis approach to identify key themes and patterns related to the research questions (Tambunan, 2019).
Findings and analysis
The findings and analysis section presents the key themes and patterns identified from the secondary data analysis on the role of technology for small and medium enterprises (SMEs) in the construction sector.
Technology Adoption
The analysis showed that SMEs in the construction sector face numerous barriers to adopting technology, including high costs, lack of technical expertise, and resistance to change. However, those who successfully adopt technology can improve their efficiency, productivity, and profitability. For example, Building Information Modeling (BIM) software was found to reduce labor costs by up to 25% and improve productivity by 30%. Other technologies such as drones, robots, and 3D printing were also identified as effective tools for automating tasks and reducing the reliance on manual labor (Chatterjee and Kar, 2020).
Communication and Collaboration
The analysis revealed that technology can also help SMEs in the construction sector to improve their communication and collaboration. Cloud-based technologies and mobile applications enable project teams to communicate and collaborate with each other from anywhere, at any time, reducing miscommunication and delays in project delivery. Virtual reality and augmented reality technologies were found to improve stakeholder understanding and engagement with construction projects (Álvarez et.al, 2019).
Environmental Sustainability
The analysis showed that SMEs in the construction industry are increasingly concerned about environmental sustainability, and technology can help them to reduce their environmental impact. Green buildings can reduce energy consumption by up to 50%, water consumption by up to 40%, and carbon emissions by up to 35%. Energy-efficient lighting, heating, and cooling systems, and renewable energy sources were identified as effective tools for achieving these goals (Fitriasari, 2020).
Challenges and Barriers
The analysis revealed that SMEs in the construction sector face significant challenges in adopting digital technologies, including lack of awareness, lack of access to finance, and limited availability of digital infrastructure. Policymakers, industry associations, and technology providers need to work together to address these challenges and support the digital transformation of the construction sector (Chatterjee and Kar, 2020).
The analysis showed that technology plays a crucial role in the success of SMEs in the construction sector. By adopting technologies such as BIM, drones, robots, and 3D printing, SMEs can improve their efficiency, productivity, and profitability. In addition, technologies such as cloud-based collaboration tools, virtual and augmented reality, and energy-efficient systems can help SMEs to improve their communication, collaboration, and environmental sustainability (Fitriasari, 2020).
Conclusion
In conclusion, technology adoption can greatly improve the efficiency, productivity, and profitability of SMEs in the construction sector. Cloud-based technologies, BIM software, drones, robots, 3D printing, virtual and augmented reality, and energy-efficient systems can bring benefits to SMEs. However, challenges such as high costs, lack of technical expertise, and resistance to change need to be addressed. Policymakers, industry associations, and technology providers need to collaborate to support the digital transformation of the construction sector and address the challenges that SMEs face in adopting technology.
Recommendations
Based on the findings of this study, the following recommendations are suggested:
Awareness and Education: For SMEs in the construction sector to understand the advantages of adopting technology, policymakers, industry groups, and technology suppliers must work together to raise awareness and provide education. Workshops, seminars, and training courses might all help with this.
Access to Finance: In order to help SMEs, embrace digital technology, policymakers and industry groups need to investigate how to make financing accessible through grants, subsidies, and loans.
Technical Expertise: Industry associations and technology providers could offer technical support, training, and mentoring to SMEs to build their capacity in this area.
Collaboration: Via networking events, seminars, and online platforms, policymakers and industry groups might encourage cooperation between SMEs, technology providers, and other stakeholders.
Infrastructure: For SMEs in the construction sector to have access to the required tools and services, policymakers must invest in digital infrastructure.
References
Álvarez Jaramillo, J., Zartha Sossa, J.W. and Orozco Mendoza, G.L., 2019. Barriers to sustainability for small and medium enterprises in the framework of sustainable development—L iterature review. Business Strategy and the Environment, 28(4), pp.512-524.
Alzahrani, J., 2019. The impact of e-commerce adoption on business strategy in Saudi Arabian small and medium enterprises (SMEs). Review of Economics and Political Science, 4(1), pp.73-88.
Chatterjee, S. and Kar, A.K., 2020. Why do small and medium enterprises use social media marketing and what is the impact: Empirical insights from India. International Journal of Information Management, 53, p.102103.
Dey, P.K., Malesios, C., De, D., Budhwar, P., Chowdhury, S. and Cheffi, W., 2020. Circular economy to enhance sustainability of small and medium‐sized enterprises. Business Strategy and the Environment, 29(6), pp.2145-2169.
Eller, R., Alford, P., Kallmünzer, A. and Peters, M., 2020. Antecedents, consequences, and challenges of small and medium-sized enterprise digitalization. Journal of Business Research, 112, pp.119-127.
Fitriasari, F., 2020. How do Small and Medium Enterprise (SME) survive the COVID-19 outbreak?. Jurnal Inovasi Ekonomi, 5(02).
Ghosh, A., Edwards, D.J. and Hosseini, M.R., 2021. Patterns and trends in Internet of Things (IoT) research: future applications in the construction industry. Engineering, construction and architectural management, 28(2), pp.457-481.
Müller, J.M., 2019. Business model innovation in small-and medium-sized enterprises: Strategies for industry 4.0 providers and users. Journal of Manufacturing Technology Management, 30(8), pp.1127-1142.
Saka, A.B., Chan, D.W. and Siu, F.M., 2020. Drivers of sustainable adoption of building information modelling (BIM) in the Nigerian construction small and medium-sized enterprises (SMEs). Sustainability, 12(9), p.3710.
Stentoft, J., Adsbøll Wickstrøm, K., Philipsen, K. and Haug, A., 2021. Drivers and barriers for Industry 4.0 readiness and practice: empirical evidence from small and medium-sized manufacturers. Production Planning & Control, 32(10), pp.811-828.
Tambunan, T., 2019. Recent evidence of the development of micro, small and medium enterprises in Indonesia. Journal of Global Entrepreneurship Research, 9(1), p.18.
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