CHAPTER ONE

INTRODUCTION

1.1 Background of the study

The construction industry which is often one of the key sectors of any economic

is grappling with lots of challenges (Fidelis, Kevin, Peter & Christopher, 2016).

Fedilis et al. (2016) reports that when compared to many other industries

globally, the construction industry has been traditionally slow at technological

development. It has not also undergone any major disruptive changes; and has

not widely applied advances in processes such as “lean”. As a result, efficiency

gains have been meagre (Fedilis., et al 2016). To buttress this fact, in the United

States of America for example, over the last 40 years, labour productivity in the

construction industry has actually fallen. (De Almeida, Bühler, Gerbert &

Rothballer, 2016). Moreover, too many of the industry's clients are dissatisfied

with its overall performance which have been attributed to its fragmented nature

of project delivery, labour intensive nature of the process and apparent difficulty

of industry towards adopting new technologies (Abubakar, Ibrahim, & Kado,

2014).

Furthermore, Philip and Thompson (2014) stressed that the future of construction

industry is facing a high degree of complexity, extreme competition and

uncertainty with respect to the outcomes of climate change, availability of

resources and the disruptive nature of innovation. Therefore, digital

transformation is more important now than before (Fidelis, Kevin, peter &

Christopher, 2023). The quest to remain afloat and competitive in this digitalised

world and advancement in Information & Communication Technology have made

digital transformation a hot debate topic for the moment and as a driving force
for innovation and transformation for industries around the world (Ganguly, 2015;

Hoberg, Oswald, & Welz, 2015; Onyia, 2014; Gole & Kaltenbrunner, 2014; Corver

& Elkhuizen, 2014; Mckinsey & Company, 2012; Olukayode & Adeyemi, 2011).

Digitising is no longer an option for but a must do for an organisation to remain in

business both present and in future (Ganguly, 2015; Bahl, 2015).

Digitalization has been popular around the world due to its capacity to increase

project efficiency, effectiveness, and bring new opportunities (Ayobami, Clinton &

Ayodeji, 2023). In order to fulfill societal needs, the construction industry has

always taken on significant and challenging projects (Aghimien, Aigbavboa, Oke

& Koloko 2018). The performance of projects falls far too often short of

stakeholder expectations, which can sometimes tarnish the sector's reputation

and trustworthiness (Ayobami et al., 2023). Ayobami et. al. (2023) also states

that due to pressures on both the supply and demand sides, the sector has

recently begun to question the status quo strategy, rethinking the construction

industry is being greatly aided by digitalization. According to Usman and Said

(2014) the construction industry is heterogeneous in nature, requiring many

companies, consultants, and individuals to combine, discuss, and exchange

information at various levels during the planning, designing, and execution of a

major construction project.

The future of the construction industry is facing a high level of complexity,

intense competition, and uncertainty regarding the effects of climate change, the

availability of resources, and the disruptive nature of innovation (Ezeokoli, Okolie,

Okoye & Belonwu, 2016). New approaches in both design and construction are

necessary due to shifting owner demands and more complex facilities and this

calls for an innovative approach which will help improve the industry (Phillip &

Thompson, 2014). Ayobami et al. (2023) reports that the Nigerian construction
industry is at the infant stage of adoption of digitalization due to its nature and

high number of unskilled labour. It is pertinent for the Nigerian construction

industry to adapt digitalization as it helps to improve efficiency and project

delivery. Digital technology has been slow to penetrate the construction industry

because of the complexity of the sector (Moshood, Nawanir, Sorooshian, Mahmud

& Adeleke, 2020). Research conducted by Ibem & Laryea (2014) revealed that

digital technology adoption is a door opener for the development of green and

smart buildings, which would be advantageous for the environment.

The process of digital transformation involves the integration of digital tools to

optimize processes and make them more efficient (Ayobami et al., 2023).

Furthermore, to use digitalization for construction site monitoring to save time

and resources as well as to protect the environment from pollution (Osunsanmi et

al., 2018). Yevu, Ann and Darko (2021) states that the construction supply chain

is a vital artery in the lifecycle of a project. It encompasses all aspects of

construction, from initial demand, design and construction to building and other

structural maintenance, replacement and final destruction (Studer & De Brito,

2021). Despite being a significant segment of the industry, it has been criticised

for its wastefulness, inefficiency, frequent schedule delays, cost overruns, lack of

trust, poor coordination and communication (Studer & De Brito, 2021). Li (2019)

states that these problems could have been fixed if the industry had used

integrated technological innovations in its supply chain. Some of these

technological innovations include Building Information Modelling (BIM), cloud

computing, and the Internet of Things, as well as blockchain technology (Hamma,

Salman, & Kouider 2020), which have altered data exchange, storage and

analysis (Mahmudnia, Arashpour & Yang 2022) in different industries. Blockchain

is a decentralised system based on cryptographic procedures and smart

technology (ICT) in “Industry 4.0” (Zhong et al., 2020). This innovation has

numerous advantages to the construction projects, including increasing

productivity and minimising project delays (Sepasgozar, Razkenari & Barati

2015).

1.2 Statement of problem

Ayobami et al (2023) notes that the major barriers to digitalization are resistance

to technology by stakeholders, high cost of digital technology, inadequate power

supply, difficulties in adapting to change, inadequate digital facilities. As reported

by Usman and said (2014) there is need to improve the awareness of

stakeholders on the benefit of digitalization. the industry faces several

challenges, including a lack of local skilled labor, power shortage, non-availability

of materials, and unethical practices which is common in the industry. The study

conducted by Yusuf, Adindu, Badmus, and Muhammed (2021) highlighted the

challenges of digitalization in Nigeria as technological backwardness, low

financial capacity, lack of government support, lack of public private partnership,

cyber threat, lack of top management support and fear of unemployment.

Also, Ezeokoli et al. (2016) identified aligning and managing resources and teams

to focus on digital services, limited availability of the right digital skills and

capabilities, lack of collaborative and sharing culture and managing change

among others. The digital transformation in the construction industry did not

begin with the COVID-19 crisis. In fact, digital tools for the industry have been

emerging for the past ten years (Ayobami et al., 2023). Ayobami et al. (2023)

reports that the crisis, on the other hand, highlighted the importance of using

these tools in difficult environments where quick, well-informed decisions are

critical to survival and even growth.

1. What are the primary challenges that Nigerian construction companies

encounter when trying to adopt and implement new technologies in their

operations?

2. What is the level of awareness and readiness among Nigerian construction

firms regarding the potential benefits of using new technologies?

3. How do economic factors affect the ability of Nigerian construction

companies to invest in and make use of new technologies?

4. What role can partnership with technology providers and educational

institutions provide to help Nigerian construction companies adopt new

technologies?

1.4 Aim and objectives of the study

The aim of the study is to evaluate the challenges faced by the Nigeria

construction companies in implementing new technologies.

The following objectives are carefully formulated in order to achieve the stated

aim.

1. To identify and analyze the primary challenges faced by Nigerian

construction companies in the adoption and implementation of new

technologies within their operational processes.

2. To assess the current level of awareness and readiness among Nigerian

construction firms concerning the potential benefits associated with the

utilization of new technologies in their operations.

3. To investigate and understand the influence of economic factors on the

investment decisions and utilization of new technologies by Nigerian

construction companies.
 4. To explore and evaluate the potential contributions and support

mechanisms offered through partnerships with technology providers and

educational institutions in facilitating the adoption and integration of new

technologies by Nigerian construction companies.

1.5 Significance of the study

This study will show that Investing in technology development in the construction

field will help in the sustainability and effective management of both human and

natural resources, it will also help reduce wastage and make construction works

faster and easier. However this development can only be facilitated and

accelerated by infrastructure like electricity, communication and the introduction

and continuous funding of programs for recruitment to help bolster technical

training necessary to operate these technologies.

This study will also show how we can solve these challenges through

governments commitment to the complete digital overhauling in the construction

industry to help enhance smart building concepts. It will also lay down emphasis

on what problems construction companies face in implementing these

technologies which include lack of capital to fund these ideas, lack of up skilling

and recruitment, cost of acquisition, training cost, power instability,

telecommunication systems, corruption and more. When these amenities or

systems are not provided, the idea of innovation is disrupted.

1.6 Scope of the study

The scope of the study for this project is to solve the problem stated above in the

problem statement through questionaire. The development is focused on the

Nigeria construction companies failure to use new systems necessary to meet up

with advance nations as well as the lack of funding for organizations which

should be focused on providing new information about upcoming world events

systems and investing in new ideas.

The study is also being focused on Julius Berger construction company,

craneburg construction company, Arbico PLC, ELALAN Construction Company and

Hitech construction company which are all based in Lagos, Nigeria. Lagos is a

major African financial centre and is the economic hub of Lagos State and Nigeria

at large and it also the most populous urban area in Africa, the construction

industry is also part of it economic pillar, thereby allowing firms like Julius berger,

Arbico PLC and others to compete in mega projects which has enable them make

an impressive inroads into key infrastructural ventures.. However, previous

studies lacked an indepth understanding of construction innovation and a

forecast of future research trends. This study highlights hot areas and gaps in the

current structure and present a systematic review and analysis form previous

studies to develop an overview of previous research.

CONSTRUCTION COMPANIES IN IMPLEMENTING NEW TECHNOLOGIES

BY

2103032029

UDELE JEFFREY OGHENEDORO

SUBMITTED TO:

DEPARTMENT OF BUILDING TECHNOLOGY

SCHOOL OF ENVIRONMENTAL STUDIES, LAGOS STATE POLYTECHNIC

IN PAERIAL FULFILMENT OF AWARD OF HIGHER NATIONAL DIPLOMA IN

BUILDING

TECHNOLOGY

MR. AJASA A. O.