The Impact of the Top 3 Strategic Imperatives on the Building Technologies and Services Industry

Disruptive Technologies

• The process of designing, operating, and maintaining the built environment is increasingly becoming digital.
• Companies are adopting Internet of Things (IoT) and artificial intelligence (AI) in building technologies and services.
• Industry participants that do not adapt digitally will be unable to compete at the highest levels.

Transformative Megatrends

• Major Mega Trends, such as urbanization and climate change, have revolutionized building technologies and services in the past decade.
• Decarbonization has emerged as the leading Mega Trend because stakeholders in the building sector aim to lower the built environment’s carbon footprint.
• In addition, climate change has compelled governments, organizations, and businesses to support decarbonization and sustainability efforts.

Innovative Business Models

• The emergence of digital solutions and heightened efforts to decarbonize and ensure sustainability in the building industry means industry participants must change their business models.
• Innovative business models will remain essential to deploy disruptive technologies successfully and increase the chances of reducing the effects of climate change.

Frost Perspective

• The development of drones and robotics will revolutionize building technologies and services. Adjacent technologies include building information modeling (BIM) and digital twins, which the advancement of AI and machine learning (ML) support.
• Important areas that will adopt disruptive technologies include building energy management systems (BEMSs), digitized maintenance, and renewable energy sources.
• Significant development areas that support decarbonizing the built environment include heating, ventilation, and air conditioning (HVAC) systems; smart and green lighting; and advanced building automation.
• The above development areas are important to reduce carbon emissions in buildings. Using green materials in building construction will support the decarbonization of buildings.
• The change in business models will increase competitiveness among industry participants. Businesses will need to be creative and adopt new operational expenditure-driven ownership models for customers.
• New business models must cater to dynamic customer demands and demographics. In addition to being cost sensitive, customers are increasingly tech savvy and aware of climate change issues.

Scope of Analysis

• Frost & Sullivan broadly defines the building technologies and services industry (sometimes appearing as the buildings industry in this study) as products and services that include lighting, crucial building equipment, smart building management, facility management (FM), and construction management. The following slide provides details on these segments.
• In this study, Frost & Sullivan aims to identify and present important trends in the industrial vertical (an end-user vertical for participants in the building industry) and their impact on segments in the building industry. The industrial vertical refers to manufacturing facilities that manufacture, produce, or assemble medical devices and pharmaceuticals, materials, consumer products, machinery, and automotive equipment. The appendix of this report provides a more detailed definition of these manufactured goods.
• The study focuses on insights related to the industrial vertical and thus provides limited quantitative analysis (e.g., revenue forecast and companies’ market share of the building industry and its segments).

Scope

Segmentation

Building Technologies and Services

Lighting

• Light-emitting Diodes (LEDs)
• Lighting Controls
• Smart Street Lighting and Lamp Poles
• Emergency Lighting
• Horticulture and Aquaculture Lighting

Critical Building Equipment

• Low-voltage Switchgears (LVSGs)
• HVAC
• Indoor Air Quality
• Fire Safety (Detection and Suppression)
• Electronic Security
• Elevators and Escalators

Smart Building Management

• Building Automation Systems (BASs)
• BEMSs
• Workplace Analytics

FM

• Single Services
• Bundled Services
• Integrated FM (IFM)

Construction Management

• BIM and Digital Twins
• Construction Management Software

Growth Drivers

Growth Restraints

Restraint

Global economic uncertainty is affecting the building technologies and services industry, escalating material prices, construction costs, and financial constraints.

• 1–2 Years: High
• 3–4 Years: Medium
• 5–6 Years: Low

Inflexible building codes and regulations

Inflexible building codes and regulations hinder the accelerated adoption of advanced building technologies in the industry.

• 1–2 Years: Medium
• 3–4 Years: Medium
• 5–6 Years: Medium

Shortage of skilled employees

The shortage of skilled employees, such as engineers, architects, and facility managers, may compromise the advancement of digitalization in building technologies and services.

• 1–2 Years: Low
• 3–4 Years: Medium
• 5–6 Years: Medium