The construction industry is under pressure to lessen its polluting activities, increase sustainability, and reduce environmental impacts. A host of innovative technologies promise to do that.
 
Host Linh Thai is joined by experts from and ADB Ventures and EarthBrain, Skycatch, Komatsu, and Third Derivative for a close look at next-generation solutions that can make construction greener, cleaner, and more climate-friendly.
 
●          Thomas Abell, Chief of Digital Technology for Development, Asian Development Bank
●          Daniel Hersson, Senior Fund Manager, ADB Ventures
●          Akinori Onodera, President, Earthbrain
●          Christian Sanz, Founder & CEO, Skycatch
●          Ricky Togashi, Global Head of Innovation, Komatsu
●          Hara Wang, Head of Investments & Fund Partnerships, Third Derivative
 
The Climatic video series focuses on the innovators decarbonizing the Asia-Pacific region’s construction and the industry leaders partnering with them to scale.

Transcript

Linh Thai  00:10

Welcome to Climatic, a new series about the innovators who are reducing Asia's carbon footprint, the entrepreneurs who are making the Asia Pacific more resilient to climate change, and the corporate leaders who are partnering with startups for impact. Be sure to click the bell to subscribe, that way you'll be notified whenever we come out with a new episode of Climatic. Today on Climatic: Smart Construction. The construction industry contributes 11% of all global greenhouse gas emissions. Put into perspective, that means construction contributes almost as much to climate change as all the world's cars and trucks. Here in a rapidly urbanizing Asia, construction is also the inevitable companion to economic development. Megacities sit in places where there were once only fishing villages. Construction is the symphony of everyday life, jackhammers, masonry drills, and cement mixers. This is only going to accelerate in coming decades as more people move to cities, standards of living improve, and the region addresses its backlog of critical infrastructure projects. According to the World Economic Forum, 65% of the next decade's growth in construction will happen in emerging economies. Fortunately, new technologies promise to change the way that buildings and infrastructure are built, making construction cleaner, greener, and far more climate-friendly. I'm joined now by Christian Sans, founder and CEO of Skycatch, a company that uses drones and AI to make construction smarter. We have a quick video about Skycatch. Let's take a look.

Christian Sanz  01:52

Skycatch has two core technologies. The first one is the Skycatch vision engine, turning all 2D raw images and photos in LIDAR information into highly precise and automated digital terrain models. The second technology is the Skycatch analytics engine. This is the layer on top of all the data. This is where users are able to go back and forth, browse all the information, do measurements, and also run reports. You can even go forward depending on how much data you've uploaded into Skycatch. We can run predictive analytics, we can tell you how far you are from project completion. On top of all this technology, we created three separate solutions. One for high-precision mining, one for construction analytics, and another one for inspection.

Linh Thai  02:45

So Christian, the construction industry is a longstanding industry is quite conservative. Do executives really care about climate-friendly technologies? What's driving their purchase decisions and their demand for your services?

Christian Sanz  02:59

There's a direct correlation between how much equipment is used and how much material a delivery is used and the impact it has in the environment andhow much CO2 has been placed in the air while construction is moving. So if we can reduce one day of construction, not only does it make an impact in the environment and reduce CO2, but it also makes the whole process more efficient. There about 15 million projects ongoing every single year. So you can imagine the impact and how much CO2 goes up in the air by just pure waste of resources.

Linh Thai  03:36

15 million projects. That sounds like a lot. But is there really that much waste on each construction project?

Christian Sanz  03:43

Yeah, I was completely shocked when I first started getting involved in construction in early days of Skycatch in 2013 and realized how much of the project of the construction project is doing redesign of something that was done poorly or done the wrong way. There's so much waste not only on the delivery material, but also on human error. If we can prevent human error, not only can you finish the project much faster, but think about this: one error can cost a half a million dollars to repair. It costs us two weeks of redesign. It costs us more material to be delivered inside the construction site. All of it is waste and all waste will usually translate to more CO2 going up in the air.

Linh Thai  04:28

Next I want to bring on Thomas Abell from the Asian Development Bank. ADB recently worked with Skycatch on the construction of the Port of Nauru. Thomas, can you tell us about that project?

Thomas Abell  04:39

Nauru is a remote Pacific island that needed more transport infrastructure, they needed a new port. So ADB basically funded a new port infrastructure investment. And the problem was that during COVID, we were unable to travel there and monitor and supervise the project. So basically we hired Skycatch to come in and help us help us with that.

Linh Thai  05:08

It seems like ADB used Skycatch's services as a stopgap during COVID-19. Now the key question is, will ADB continue to use Skycatch after the pandemic?

Thomas Abell  05:19

Sure, yeah. Skycatch basically brings the data right into our hands on our computer so any ADB staff can go into the database on any day of the construction and look at what's happening that day. They can compare stockpiles of materials, they can look at where construction components are being laid down compared to the design, and they can look at the progress compared to the timeline. So it takes what would have normally been somebody going there in person and writing a report and actually turns that into data that we can use. And then we can keep that data for as long as we want and use it for later. So if a problem comes up 10 years down the line, we have all that data that we can go back and look at what might have contributed to that during construction.

Linh Thai  06:14

Let's go back to climate for a second, I see how Skycatch can eliminate waste and carbon emissions. But is that the whole story? Are there any other ways that technology can improve the relationship between climate and infrastructure?

Thomas Abell  06:28

Smart construction will help us initially when we plan projects to plan for climate risks and climate mitigation. So, for example, if you're building a long-term infrastructure, like a road, you want to make sure that it's not going to be vulnerable to climate issues, like sea level rise or landslides or flooding. And these are very complicated things that ADB has to deal with. So basically, we can use these technologies in planning and then we can also use them in the actual construction by more efficiently leveraging materials, more quickly locating issues in turning around projects more quickly, and hopefully even doing projects in more financially efficient ways as well.

Linh Thai  07:18

Thanks, Thomas. I have with me now Ricky Togashi, head of innovation at the construction equipment giant Komatsu. Komatsu is among the world's largest evangelists when it comes to smart construction technology. And I also have Nori Onodera, CEO of the smart construction solutions company EarthBrain. EarthBrain was recently spun off from Komatsu earlier this year. Ricky, my first question is for you. Why has Komatsu been so out front about smart construction?

Ricky Togashi  07:45

So, in the civil engineer and construction work, we are facing two weaknesses. These two are huge problems. One is safety and the other one is labor shortage. The number of fatalities is the worst in this industry. The number of workers in each developed country will decrease by one million in the next 10 years. And more seriously, more than 90% of companies in the civil engineering and construction industry are small companies with less than 10 employees. All construction processes are very manual, especially in survey work, which is very time-consuming and inaccurate, so Komatsu decided to create visualization and optimization tools by our friends and provide those to our customers.

Linh Thai  08:38

Thanks, Ricky. It seems like safety and labor shortage are the two key drivers of innovation and technology within the smart construction space. Let's talk about EarthBrain. Nori, tell us about EarthBrain and how your company is addressing the issues within the industry.

Nori Onodera  08:53

We are digitizing the construction industry. EarthBrain's vision is to optimize the entire construction process through digital technology. Transformation focuses on the process of creating safe, highly productive, smart, and green workplaces for the future.

Linh Thai  09:13

Okay, I see. So it seems like EarthBrain's main's goal is to help digitize the construction industry. And I think we all recognize this is not an easy task. Can you tell us a little bit about some of the products and services that you provide to help companies in this digitization process?

Nori Onodera  09:29

We are connecting the entire construction process from the bidding, planning, construction, and inspection by all 3D layers.

Linh Thai  09:40

But what about the human factor? Once a company implements your solution, what are the challenges that they face when it comes to getting people on the ground to actually use all that data?

Nori Onodera  09:51

Okay, actually, we started the smart construction business in Japan. In the beginning we trained smart construction consultants here. Together with our customer, the construction company, we provided the optimum application to change their operations. So for instance, in the planning phase, we are providing drone surveys. And also our design people will change the drawing data into 3D data that will come to the ICT machine. And we also provide the ICT machine to the customers who are leading the operations. And once I see the machines are moving and digging, then this data will come to our smart construction buildout, the smart construction dashboard. Our customer can monitor and check the gap between the ground and the actual construction attributes through this smart construction dashboard. So we are providing the comprehensive software, hardware, insights, and services for our consultants.

Linh Thai  11:12

Thanks, Nori. Ricky, we were just speaking with Christian Sanz, and we understand that Komatsu made an investment in Skycatch. Can you tell us about why Komatsu is excited about drone technology?

Ricky Togashi  11:23

As for the survey technologies, the current technology is very manual. So, we do have to use such kind of a bare stick type as a survey tool, and it takes about three days or one week. All the total volume and the training is not accurate compared to the real job site. But using the drone technologies, we can reduce the total service time, down to 100 times, and we can get very accurate results. All we have to do is just to push a button on a monitor, then the drone will run automatically, and fly for 10 or 15 minutes above the jobsite, and it comes back automatically to the real exact launch point. And then out of that we get a bank of photo data and we can create a 3D digitization of the jobsite a lot better in 20 minutes. It is a very, very short time. And altogether with this kind of 3D data they can visualize everything.

Linh Thai  12:54

So how long did it take before we had all this data? How long did it take for a human to do it?

Ricky Togashi  13:00

It takes about one week.

Linh Thai  13:03

So you've been able to reduce the process from one week, down to just 20 minutes?

Ricky Togashi  13:08

Right.

Linh Thai  13:12

Thanks Ricky and Nori. Big industry is backing smart construction. And now, Asia's VC investors are also taking notice. We asked a couple investors to join us to share their thoughts on investable opportunities in smart construction. Let's start with Daniel Hersson from ADB Ventures. Daniel, tell us about your investment mandate.

Daniel Hersson  13:30

ADB Ventures is a new venture capital platform that we launched last year. And the reason why we launched it is that we see this wave of new solutions to the world backed by exceptional entrepreneurs from Asia and beyond that, if deployed at scale in Asia, could have a significant impact both in the near term and longer term.

Linh Thai  13:54

Okay, I understand that ADB Ventures is also very focused on climate impact, and that Skycatch is one of your first investments. What are some of the other technologies that you're looking at in the smart construction space?

Daniel Hersson  14:06

What do we think are a couple of areas? One is the whole transition towards digitizing infrastructure, and in particular what are called digital twins: the ability to capture the real world in a very detailed digital model. That in itself can significantly improve how we develop construction sites and reduce inefficiencies in group activites, thereby also reducing waste and CO2 emissions. The other area that we're interested in exploring is other smarter, better lower-carbon materials out there for the construction industry. And then, of course, there is the whole issue of how do you manage the ecosystem between the subcontractors, the contractors, the planners? How do you better coordinate that, particularly in Asia, where many of the contractors and people involved in the construction industry are usually smaller companies? How do you get those into this new digital world as we move along? So these are big ideas for us that we just starting to explore.

Linh Thai  15:05

Thanks Daniel. We also wanted to get a perspective from another climate-focused investor, Hara Wang from Third Derivative. Hara, you're based out of New York. Is Asia a priority for Third Derivative? And if so, why?

Hara Wang  15:18

Thank you Linh. For me, you can't really discuss decarbonization opportunities without talking about Asia. The continent has more than half of the world's population. It's going through a rapid phase of industrialization, urbanization, and rising consumer demand. So for many parts of Asia, now is actually the perfect opportunity to grow and expand in a way that doesn't have to rely on the century-old energy inefficient models and really harness these decarbonization opportunities. And on top of that, I really want to mention this, Asia also stands out as being more exposed to physical climate risk than any other parts of the world. So to that end, it's also critically important that we really have this climate adaptation and climate resilience mindset for this new phase of infrastructure built out in Asia.

Linh Thai  16:08

Okay, what kind of smart construction investments are on your radar?

Hara Wang  16:12

There are a lot of really exciting opportunities that I'm personally super energized about. I'll just list a few that's kind of top of my mind. I think first of all, construction sector, just like any traditional sector is going through, really, a period of digital transformation right now. Which means that there's increasingly important technology such as big data sensor simulation. Now they're being used to drive better design of the buildings, better construction management, and better facility operations. Actually, a specific application of data that I'm really excited about is risk assessment. And particularly when it comes to physical climate risk, I think there's a really big opportunity here for startups to innovate and help the building and construction sector to better understand and monitor the performance of the buildings of the construction projects and infrastructure projects, particularly under the increasing heat, humidity, and flood risk that comes with climate change. Right now, I'm really excited to explore the potentials of achieving net-zero through a combination of prefabricated components, 3D printing and recycled building materials, particularly if it's coming from agricultural industrial byproducts.

Linh Thai  17:30

Thank you, Hara. That's all very exciting and I can't wait to learn more. Join Daniel, Hara, and the rest of our investor panel next week for the Climatic Startup Showdown, where we'll meet three promising smart construction startups that aspire to clean up the Asia Pacific construction industry. Thanks again to the other guests who joined me today: Ricky Togashi, Nori Onodara, Christian Sanz, and Thomas Abell. Keep growing, keep innovating, and keep resilient.

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