< Previous68 MASTER BUILDERS JOURNAL #118 Feature digital transformation front. The way things are developing, the prophecy of the science fiction movie directed by Steven Spielberg, 'Ready Player One', where humanity has succumbed to using Artificial Reality to escape the desolation of the real world, may possibly come true. Perhaps, it is time we started putting more efforts in the new but virtual construction industry where we might even be able to earn a decent living building virtual buildings in the cyberspace. The Young Digital Natives Just like what is already happening in the manufacturing industry, even though construction productivity is expected to keep rising with Artificial Intelligence and automation, the number of construction jobs is expected to be reducing a lot, affecting jobs of all skill levels. According to World Bank, the unemployment rate of youth has been increasing since 2014 to now match the previous economic crisis level in 2009 at 11.67%. The quality and relevance of education is often considered as the first root cause of youth unemployment. Skill mismatches and gaps between industry expectations and the outcomes of tertiary education institutions are prevalent in Malaysia (Salleh, et al., 2017). The youth unemployment rate in the construction industry may even be higher and may accelerate sharply in the next few years under the current gloomy economic climate and when young digital natives who grew up with digital technology joins the workforce, having gone through outdated education framework based on obsolete technologies and beliefs. And these digital natives are mostly gamers. Humanising Realities In the wake of Industry 4.0 and in view of the implications upon us, perhaps it is timely for us to re-examine each possible belief we have in relation to how we live, learn and work carefully. We need to rid ourselves of any false or outdated belief we have and change. I propose we start with the education front and then the legislations relevant to the construction industry to encourage digital transformation. I propose that we gamify learning in construction courses to attract more talents into the industry and get rid of outdated laws, such as those that necessitate submission of 2-D drawings for planning approvals. Perhaps it is timely for us to work on all realities, artificial and otherwise, for everyone will have to be technologically savvy, and some of the most important jobs of the future will be those that bridge the gaps between machines and humans as well as those between artificial reality and reality. Let’s stop cyberising humanity and start humanising the cyberspace. (1) Berthiaume, D., . Auction platform Worthy to move headquarters to NYC. [Online] Available at: http://www.chainstoreage. com/article/auction-platform-worthy-move- headquarters-nyc [Accessed 10 2 2020]. (2) Jones, S. & Dawkins, S., 2018. The Sensorama Revisited: Evaluating the Application of Multi-sensory Input on the Sense of Presence in 360-Degree Immersive Film in Virtual Reality. [Online] Available at: https://link.springer.com/ chapter/10.1007/978-3-319-64027-3_13 [Accessed 20 2 2020]. (3) Kolandan, S., 2019. Industry Revolution 4.0 and Education System in Malaysia: Are We Ready for the Challenges?. [Online] Available at: https://igi-global.com/chapter/industry- revolution-40-and-education-system-in- malaysia/224220 [Accessed 19 2 2020]. (4) Salleh, N. M., Emelifeonwu, J. C., Winterton, J. & Chan, K. M., 2017. Work-readiness in Malaysia. [Online] Available at: https:// taylorfrancis.com/books/e/9781315533971/ chapters/10.4324/9781315533971-5 [Accessed 21 2 2020]. (5) Thil, S., . March 17, 1948: William Gibson, Father of Cyberspace. [Online] Available at: https://www.wired.com/science/discoveries/ news/2009/03/dayintech_0317 [Accessed 10 2 2020]. (6) Manyika, J. et. al.,. Digital America: A tale of the haves and have-mores. [Online] Available at: https://www.mckinsey.com/industries/ technology-media-and-telecommunications/ our-insights/digital-america-a-tale-of-the- haves-and-have-mores [Accessed 10 2 2020]. (7) The Global Economy.com, Malaysia: Youth Unemployment. [Online] Available at: https:// www.theglobaleconomy.com/Malaysia/ youth_unemployment/ [Accessed 10 2 2020]. (8) Anagnost, A., Why Ready Player One Is a Beautiful Prophecy for the Future of VR Collaboration.[Online] Available at: https://www.autodesk.com/redshift/vr- collaboration/ [Accessed 10 2 2020]. (9) New Straits Times, Malaysian judiciary makes history, uses AI in sentencing. [Online] Available at: https://www.nst.com.my/ news/nation/2020/02/567024/malaysian- judiciary-makes-history-uses-ai-sentencing [Accessed 21 2 2020]. (10) Xu, Min & David, Jeanne & Kim, Suk. (2018). The Fourth Industrial Revolution: Opportunities and Challenges. International Journal of Financial Research. 9. 90. 10.5430/ijfr.v9n2p90. Sr Lim Kok Sang is the Principal of Sang QS Consult, the Vice President (QS) and Quantity Surveying Division Chairman of Royal Institution of Surveyors Malaysia (RISM). FIGURE 1 Youth Unemployment70 MASTER BUILDERS JOURNAL #118 Feature BY ALIA ASTAMAN A s of 2017, the global construction industry contributes roughly 13% of the global GDP, with a projected increase to 15% in 2020. The sector has immense potential to create employment opportunities, offering jobs to approximately 7% of the total employed workforce around the globe. The importance of the sector holds true in Malaysia, where in 2016 the construction sector share of GDP was valued at RM50.1 billion, or 4.5%. By the end of 2020, the sector is projected to contribute 5.5% to our national GDP at RM327 billion, as well as acting as a provider of 1.2 million jobs. Undoubtedly, it is one of the backbone industries of Malaysia and the world. However, it must be said that it is not keeping pace with the overall progress of economic activity — a phenomenon that can perhaps be attributed to its leisurely pace in embracing the digital era. McKinsey research shows that construction has notoriously been the slowest industry to move into the digital age. It is the least digitised sector, from being slow in adopting new technology innovations to being slow in improving industry fundamentals (e.g. uncoordinated project planning done on paper, inadequate performance management systems and unsophisticated supply- chain practices). The construction sector also lags behind in terms of R&D spending and spending on information technology, despite the fact that there have been a number of new software solutions developed for the industry. This lack of speed has resulted in almost universally-applicable inefficiencies that have serious cost implications; for example, large projects across asset classes typically take 20% longer to finish than scheduled and tend to go up to 80% over budget. Since the 1990s, construction productivity has not just slowed down but is actually beginning to decline- resulting in often relatively low and volatile financial returns for contractors. Consequently, the construction industry is in a position where it has to make huge improvements in productivity to meet the demand of an increasing global GDP, to the tune of $57 trillion by 2030. It is well beyond time for the construction industry to speed up — so why isn’t it? There are a multitude of possible reasons on why construction may be slower to move into the digital era compared to other industries, but the two discussed here are the core people- related factors: a) a critically heavy reliance on low-skilled, often foreign labour, and b) a rapidly aging workforce. It comes down to a skill gap within construction that is approaching crisis more rapidly compared to other industries. Research claims that there is a skilled labour shortage happening across the global construction industry. In the United Kingdom, 50% of respondents surveyed by the National Specialist Contractors Council in 2015 Despite the construction industry’s immense potential in creating employment opportunities, it is not keeping pace with the overall progress of economic activity – perhaps attributed to its slow pace of moving into the digital age. The Malaysian Construction Sector’s Challenge in Going Digital71 MASTER BUILDERS JOURNAL #118 Feature experienced recruiting difficulties due to a lack of applicants who are classified as skilled. The severity of the issue resulted in over 25% of firms surveyed having to turn projects down due to shortage of workers. Hence, one could suppose that there is a long way to go before construction firms are able to incorporate new technologies such as blockchain, Artificial Intelligence, and drones into their ‘norm’ the way that other industries have. Malaysia is not exempted from this skilled worker shortage; for us, the crisis is heavily related to our over- dependency on foreign construction workers. Researchers claim that since most foreign construction workers arrive in Malaysia relatively unskilled, an abundance of them in the workforce has led to decreased productivity and levels of quality assurance. There have also been numerous perceived social ills that result from this over- reliance, linked to issues like local unemployment rates and outflow of local currency. Additionally, as Bank Negara Malaysia (BNM) data shows, there is a negative relationship between share of foreign workers in an industry and that industry’s productivity. Despite this, foreign low skilled workers continue to make up a solid proportion of our construction workforce. This is because, as some studies claim, foreign workers are preferable due to their obedience in carrying out the work they were tasked with and their general satisfaction with the salary, welfare, and facility conditions of the job. These factors create an employer’s perception of foreign workers being ‘less hassle’ compared to locals, even if the locals prove to have a higher level of skill. This effect is manifested two-fold in a reduced interest within the local talent pool, who see the construction industry as not only a ‘3D’ (difficult, dangerous, and dirty) sector, but also one that is over-saturated with cheaper labour and hence not lucrative. It is a self-perpetuating cycle. Circling back to digitisation, this ‘race-to-the-bottom’ phenomenon of having inexpensive labour comes at a price when it comes to talking about propelling the industry forward into the future. This is because when worker wages are kept perpetually low due to their corresponding low skill, it makes labour relatively cheap compared to capital costs. This in turn weakens incentives for firms to substitute labour for technology, or for greater value-adding activities from employment of higher-skilled labour. While government initiatives such as grants and incentives for automation and technology adoption are helpful, they are insufficient by themselves to create the vital push for firms to move up the value-chain. What this results in is that the industry itself is reluctant to adopt new technologies and automation, making it slow to embrace the digital era. Another factor to consider on why construction faces severe challenges in moving towards digital transformation is its rapidly ageing workforce. According to the International Labour Organisation (ILO), young people are less likely to join in training programmes and participate in the construction sector around the globe. In the USA, the median age of the construction worker is 41 years nationwide and rising, indicating a need to recruit the younger age groups into the construction industry; meanwhile, the UK experiences similar issues as there is insufficient young people coming into the industry to match the gaps left behind by skilled and experienced workers retiring from the workforce. These issues are echoed across a wide range of economies, including Malaysia’s. There are both demand-side and supply-side explanations for this factor. Some studies have shown that while construction firms in Malaysia are actively hiring new workers throughout the year, the demographic of their organisations is primarily above 30 years old years old (67%), and they are often looking for workers who reflect that age group. This can be related with information from the same study which shows that 69% of the time, firms are searching for skilled and experienced workers, who are more likely to be older. At the same time, the study states that construction firms surveyed had limited opportunities for apprenticeships, which would have been the avenue for young people to break into the industry and gain construction experience. As for the supply-side explanation, the reasons for why youths are not participating in construction are probably largely similar to why the construction industry is not attractive to local talents at large — perceived inadequate monetary compensation, unattractive workplace conditions and career prospects. With these factors acting as a complex obstacle course of challenges, it only makes sense that in order to start tackling the aspirations of digitisation and disruption, we need to address this critical labour situation first. Unsurprisingly, the discussions on how to break reliance on low-skilled, foreign labour and those on how to attract younger, higher-skilled talent is and has always been inter-linked for the construction industry players. Industry stakeholders across the board have discussed numerous potential solutions for this crisis, with varying degrees of business and political favourability. One could split the solutions into ‘push/pull’ categories. ‘Pull’ solutions would be suggestions that re-design the construction sector to become more attractive, luring young local workers in, while ‘push’ solutions would be ideas that re-design the human resource supply, ensuring increased school leavers that are sufficiently skilled and interested in joining construction. Of the ‘pull’ solutions, there is a certain degree of consensus that some level of wage increment is needed to attract local labour. The Construction Industry Development Board are of the opinion that that if construction firms can increase wages to make it commensurate with the cost of living in Malaysia, the construction sector can break free of foreign worker dependency, leaving sufficient replacement room for young, skilled local workers. This process can also be aided by employers improving non- monetary compensation. For instance, 72 MASTER BUILDERS JOURNAL #118 Feature opportunities for career progression, learning and development, performance-related reward systems, and enhanced safety procedures at the workplace are all tried and tested methods to motivate, attract and retain employees that are competent, skilled and knowledgeable. They are ways for employers to demonstrate that they value their workers, which will in turn instil pride and loyalty amongst the workers. Meanwhile, the ‘push’ solutions are typified with ideas that manage the quality of the labour supply coming into the workforce, i.e. by prioritising skill formation via our education systems. The 2020 Budget saw RM5.9 billion being allocated to post- secondary vocational and technical education (TVET). While this seems like a considerable amount, many parties still consider the allocation insufficient due to high inflation and high operational costs incurred in TVET institutes. Furthermore, as of 2018, only 7% of school leavers were pursuing TVET, indicating much room for improvement in getting youths to choose TVET as an educational path. Many researchers have attributed this to lack of exposure to TVET at school level as well as its ‘second-class status’ — it is perceived as a ‘sub- academic’ path. This branding issue is one that has persisted despite facing an upcoming 4 th Industrial Revolution which requires an IT-savvy workforce with the ability to adapt alongside a rapidly-evolving industry. As of 2017, there are two datapoints which could be indicators of the IR4.0 shift in labour demand (see Table 1). Despite the information, the numbers of those pursuing TVET are still substantially sub-optimal. Hence, the government must continue and improve upon its effort to prioritise TVET. For instance, advertising campaigns in career fairs and having career counselors in schools expose construction sector opportunities could provide early exposure to students, helping them visualise the sector as a viable career choice and encouraging them to pursue it accordingly as a skilled worker via the TVET path. After all, it is not just a matter of young locals entering construction, but rather high-quality and competent young locals. They will be the value-add needed in terms of productivity, efficiency, and openness towards embracing new IT — all catalysts that will accelerate us towards digitisation. In essence, Malaysia still has a long way to go for its construction sector to move forward into the digital era; before we can dream of drones and advanced data analytics, the very make-up of our construction workforce needs to fundamentally shift towards a younger, local, and higher-skilled talent segment. The achievement of this goal then requires the key stakeholders to play their part in facilitating systemic change — the government in supplying the adequately skilled labour force and designing policy that supports local and skilled workers, the business players in providing adequate incentives and creating an attractive environment for the new generation of skilled workers, and our young people themselves who must see past their own potential bias/prejudice against the construction industry and visualise it for what it really is — a competitive career choice with a bright future outlook, and a vital part of shaping our nation. References • Deloitte Insights. (2019). Digitising the Construction Industry, accessed at: https:// www2.deloitte.com/us/en/insights/topics/ digital-transformation/digitising-the- construction-industry.html • McKinsey Insights. (2016). Imagining Construction’s Digital Future, accessed at: https://www.mckinsey.com/industries/capital- projects-and-infrastructure/our-insights/ imagining-constructions-digital-future • Hamid et al. (2017). The emerging of employment gap in the Malaysian construction industry. International PostGraduate Conference on Applied Science & Physics, accessed at: https://iopscience.iop.org/ article/10.1088/1742-6596/1049/1/012033/pdf • Shazwani et al. (2012). Construction Skilled Labour Shortage: The Challenges in Malaysian Construction Sector. Kuala Lumpur: Universiti Teknologi Malaysia. • Ibrahim, N.B. (2014). The Poor Involvement of Local Youth in the Construction Workforce in Malaysia, accessed at: https://core.ac.uk/ download/pdf/78278058.pdf • Najib et al. (20xx). Malaysian as the Component of Labour Force for Construction Industry in Malaysia. MATEC Web of Conferences accessed at: https://www.matec-conferences. org/articles/matecconf/pdf/2019/15/ matecconf_iconbee2019_01007.pdf • Construction Industry Development Body. (2016). “Heights,” Construction from a New Angle, vol. 3, pp. 1-27. • The Star. (2019). ‘Thanks, but RM5.9bil not enough for TVET’, accessed at: https://www. thestar.com.my/news/nation/2019/10/12/ thanks-but-rm59bil-not-enough-for-tvet • Ang, Murugasu & Chai. (2018). Low-Skilled Foreign Workers’ Distortions to the Economy. Kuala Lumpur: Bank Negara Malaysia. Accessed at: https://www.bnm.gov.my/ index.php?ch=en_publication&pg=en_work_ papers&ac=61&bb=file • Boo, C.H. (2018). From TVET in Industry 4.0 to reshaping of our perception of education, accessed at: https://www.malaysiakini.com/ letters/435396 • Gan, P.L. (2017). Chong: TVET grads draw as much salary as varsity grads, accessed at: https://www.thestar.com.my/news/ nation/2017/05/23/chong-tvet-grads-draw-as- much-salary-as-varsity-grads Alia Astaman is a millennial, a management consultant and an avid reader of Master Builders Journal. She is passionate about youth perspective pertaining to Malaysia’s construction industry. All opinions expressed are entirely hers. TABLE 1 Indicators of the IR4.0 Shift in Labour Demand INDICATOR Employment Prospects Salary Prospects UNIVERSITY GRADUATES 76% employed within the first year after graduation 54% have a starting salary <RM2,000, with a typical starting salary range between RM1,949 to RM2,836 90% employed within the first year after graduation Can have a starting salary between RM2,000 to RM5,000 TVET GRADUATESWhat is OPENSPACE ? OpenSpace uses AI and ML Technologies to capture 360degree photos on wearable camera, simultaneously transfer data through mobile app (IOS and Android supported) to Cloud-based AI platform that processes and stores the data. Photos will be pinned to construction plans automatically.Users will be able to view and compare the project progress with any point of time in the past. Cloud-based AI platform that processes and stores the data A wearable 360 camera and mobile app (iOS and Android supported). Browser-based virtual jobsite viewer.Integrated with project OPENSPACE pins photos to plans automatically - Fraction of the cost of photo subcontractors. - Greater visibility into project status. - More efficient RFIs. Virtual walkthroughs available online. - Prevents project delays. - Full transparents , instance and remote project monitoring via 360 photos. BIMAGE CONSULTING (M) SDN BHD (1323296-H) (Formally known as VDC Integrated Tech Sdn Bhd) C-07-04 , Block C Setiawalk , Persiaran Wawasan, Pusat Bandar Puchong,47160, Puchong, Selangor, Malaysia. Tel : 03-8605 4409 / 013-533 3992 Email : nicole@bimageconsulting.com Website : www.bimageconsulting.com74 MASTER BUILDERS JOURNAL #118 Europe Polycarbonate Sheets Market The increasing popularity of polycarbonate sheets against conventional materials, such as glass and ceramics is driving the demand for polycarbonate sheets in the construction industry, especially in the residential and commercial building projects. As the construction industry in Europe continues to grow, the consumption of polycarbonate sheets is expected to rise. Market Trend In 2016, the global polycarbonate sheet consumption market is led by Europe, accounting for about 38.1% of global consumption. The European polycarbonate sheets market is expected to register a CAGR of 4.3%, during the forecast period of 2019–2024. One of the major factors driving the growth is the revival of the construction industry in countries, such as Germany, France, the United Kingdom and Spain. In the construction industry, polycarbonate sheets are used in roofing, cladding and glazing applications, owing to their lightweight, easy installation and energy conservative features. They are further used as fences and walls in both residential and commercial building projects. Construction activities in EU countries were expected to rise by 3.5%. In Germany, construction activities increase due to the increasing demand for residential accommodation. As per industry experts, the demand for new houses is estimated to be around 350,000 per year until 2020. Such positive factors are expected to drive the consumption of polycarbonate sheets in the construction industry, during the forecast period. Conclusion In Europe, Germany’s economy is the largest and the fifth by GDP in the world. Germany dominated the market across Europe, due to the rising demand in the automotive and construction industries. The expansion of the construction industry and the usage of polycarbonate sheets are expected to increase. Malaysian companies should take advantage of these opportunities and offer good quality polycarbonate sheets to European countries. For further information, please contact MATRADE Germany at frankfurt@matrade.gov.my MATRADE’S INSIGHT Business & Trade Information Feature Disclaimer: While every effort has been taken to ensure that the contents of the article (MATRADE’S Insight) are accurate and current, MATRADE cannot be held responsible for any conclusion, omission or error and is not liable for any loss or dispute arising from the use of the information provided.75 MASTER BUILDERS JOURNAL #118 MATRADE’S INSIGHT Business & Trade Information Feature The main opportunities for services are in providing consulting for designs, architectural services and project management. Companies must be aware of the long lead times from project conception to implementation. Often a partnership is considered the best method for market entry. In order to develop a good business relationship with those involved in the building and construction industry, we should consider the following: • Build personal relationships with the industry groups. • Demonstrate commitment to the industry by maintaining a profile and adopting a long-term outlook. • Research the market and your potential competitors on a regular basis. • Companies prefer to have brochures and product samples rather than relying on websites for information. • Actively develop distribution and supply channels. Conclusion There are opportunities for Malaysian developers or Malaysian building materials suppliers as well as architectural and services companies to explore the Fijian construction market. As Fiji is vulnerable to natural disasters like cyclones, Malaysian developers could offer and invest both affordable and climate resilient infrastructure. For further information, please contact MATRADE Melbourne at melbourne@matrade.gov.my Opportunity Home ownership in Fiji is in fact quite low at the moment. An IFC (International Finance Corporation) analysis of housing affordability in Fiji has shown that the lack of affordable housing and land packages has contributed to the growth of temporary settlements around Nadi and the capital, Suva. The move, which is in line with the government’s vision to provide affordable and decent housing for all communities by 2020, is aimed at supporting families who struggle to find housing due to rising land and home prices. With increased investments in infrastructure projects and rehabilitation after tropical cyclone Winston, the building and construction industry in Fiji is operating at a large capacity. Local and overseas investors have announced several multi-million- dollar projects. The Fijian government is offering first home buyers with an annual income of less than 50,000 Fijian dollars (USD23,000) and 15,000 Fijian dollars (USD7,000) in the form of grants. This intention is to help more Fijians own their own homes. Partnership to Provide Affordable Homes Disclaimer: While every effort has been taken to ensure that the contents of the article (MATRADE’S Insight) are accurate and current, MATRADE cannot be held responsible for any conclusion, omission or error and is not liable for any loss or dispute arising from the use of the information provided.MASTER BUILDERS ASSOCIATION MALAYSIA (MBAM) No 2-1 ( 1st Floor ) , Jalan 2/109 E Desa Business Park 58100 Kuala Lumpur Tel : 03-7984 8636 H/P : 017-258 5200 Fax : 03-7982 9811 Email : mbam13@mbam.org.my | mbam14@mbam.org.my MASTER BUILDERS JOURNAL #118 77 Sin Chew Daily Sin Chew Daily The Star The Edge The Edge Nanyang Siang Pau The Edge Builders’ Association: Maintaining industry development “Approved projects should be accelerated” Funding to train plumber apprentices if cooperate with state government Thanks for speeding up foreign worker replacements (MBAM Letter to Editor) The year in review (My Space by Foo Chek Lee) A makeover in the making (Wuhan Pneumonia) Not overly dependent on China. Sufficient local building materials supply Safety net funds has more than it needs DatePublicationTitle MBAM in the News December 2019-February 2020 14 Dec 15 Dec 17 Dec 23 Dec 27 January 31 January 24 FebruaryNext >