An interview with Andreas Owen, founder and managing director of wirsindhandwerk
When you hear the terms construction and skilled craftsmen, you inevitably think of the analog world of construction machines. But even the construction industry cannot avoid the topic of digital transformation and it will inevitably have to find new ways to remain competitive. But to what extent have the manual trades “gone digital” – particularly in the construction sector? This is the question Andreas Owen, founder and managing director of wirsindhandwerk, asked himself before developing a digitalization barometer, the first instrument of its kind for assessing the degree to which the skilled crafts sector has introduced digital technology. In an interview with TRANSFER, he tells us how his project came about, how it was implemented, and the kinds of changes it will bring about for the manual trades.
Hello Mr. Owen. Your digitalization barometer for construction and interiors is part of a Germany-wide research project, the first of its kind to look at the progress made by the manual trades in introducing digital technology. How did you come up with the idea?
The idea of the digitalization barometer came up when I launched the recommendation website wirsindhandwerk.de. The question I found myself asking at the time was, “How ‘digital’ actually are the manual trades?” There were plenty of studies, but none looking at things across the board when it comes to craft industries. So the idea of a 360-degree assessment was born, not only to examine skilled craftsmen and manual trades themselves, but also to cover the overall industry, end customers, young people, experts involved in the manual trades, and craft industry organizations. The aim of the study was to make it possible to measure the degree of digitalization among skilled crafts companies, but also to have points of comparison for different trades. The study allowed us to achieve both of those objectives.
What was your approach for implementing the project, and what were the biggest challenges you faced?
We started with two kick-off workshops, the aim of which was to establish a structure for digitalization in the manual trades so we could determine the dimensions of digital transformation. For each dimension, we then selected different indicators of digital transformation, and based on these we could determine the “degree of digitalization.” We then went into a phase of qualitative research and organized group interviews with home owners and the younger age group, half of whom were planning to buy at some point. We then conducted structured telephone interviews with the owners of companies involved in construction and interiors. In parallel to this, there were telephone interviews with digital transformation experts working in industry, science and academia, and craft industry organizations. For the quantitative phase of research, we determined the relevance of certain factors so we could weight the digital habits of business owners. Later on, this made it possible to calculate the final “degree of digitalization.” This quantitative part of the research involved a telephone survey of 1,800 business owners in the manual trades and skilled crafts, plus an online survey of 1,000 end customers and 900 young people – and then finally we analyzed the results.
The biggest challenges were selecting the right indicators and ensuring they’re highly relevant, meaningful in terms of topics covered, easy to understand, relevant right now, and that they reflect actual habits. But on the other hand we also wanted to include businesses that still haven’t gotten far with digitalization. Although deciding to use telephone interviews as the survey method made things much more resource-intensive, it was an essential building block in determining actual habits and behavior regarding digital technology.
Can you summarize for our readers the most important insights you gained? And are there any results that can be applied to comparable companies – beyond the manual trades?
One thing that can be said overall is that digitech is definitely here to stay in the manual trades. That said, the overall degree of digitalization stands at 37%, so there’s clearly still room for improvement. Most construction companies and tradesmen involved in building interiors are positively inclined when it comes to digital solutions, and the changes triggered by digital transformation are largely welcomed. The major differences you see when it comes to attitudes toward digital transformation and actual implementation in operational terms are to do with the age of the business owners and the size of the business. With younger age groups – i.e. people under 50 – people are more likely to consider digital transformation important if they are more educated, and it’s the same the bigger the company gets. Looking at the individual dimensions of digitalization – things like management practice, business development, market communication, business systems, administrative processes, and front-line service delivery – there’s not a single dimension with satisfactory levels of digitalization. The most progress when it comes to digitalization has been made with business processes and administration.
But there’s still a lot of catching up to do when it comes to planning overarching digital transformation strategies. Until now, it seems – if anything – digitalization has been taking place on an ad hoc basis. As a result, there are often difficulties dealing with the different interfaces. But if you’re going to be rigorous in the long term when implementing the different options offered by digitalization, a holistic digitalization strategy is needed.
Looking at the specific trades, it’s primarily electricians, plumbing, heating, and air conditioning experts – but also carpenters and joiners – that score above average when it comes to digital transformation. As for new business models, there’s not much momentum, but an increasing number of models are now being integrated into portfolios. Currently, there’s not much importance given to using digital technology to help skilled craftsmen provide their services. As for artificial intelligence – and its future role as a fundamental technology behind lots of emerging digital applications – it hasn’t yet registered consciously enough with business owners. Looking at digital solutions in business or in companies by using the value chain, i.e. the individual dimensions, is also interesting for comparable companies beyond the skilled crafts sector. The finding that you need a digital transformation strategy to make a success out of digitalization in the long term is also something that can be applied to other companies.
What implications do you think this all has for companies and craft industry organizations?
The significant structural changes that are already taking effect in the skilled trades sector are having a particularly marked impact on small, family-run skilled crafts companies. They will be handing over their businesses in the medium term or they won’t be able to afford the investments that will be required in the future. This could result in crafts and manual skills that have been built up over generations being lost. To keep these businesses going, it will therefore be hugely important to combine the craftsmanship that has evolved over time with the modern opportunities presented by digital technology. But there’s one particular cause for concern in this: the extremely skeptical attitude toward digital technology among business owners. It will be extremely important to offer additional support and put measures in place to motivate people through the craft industry organizations so the digital divide doesn’t continue to widen in the future. The degree of digitalization these firms have achieved really has to be raised to a higher level – not just in terms of service delivery, but also when it comes to market communication, management, and business development. One thing that really stands out is that certain indicators of digital transformation – the ones the experts believe will be particularly pertinent in the future – are very rarely even looked at by the companies, or are very rarely available to them. This could be due to the fact that some applications are more complex than others, so they revolve around a level of digitalization that very few companies have achieved until now. But maybe the thing that’s missing is a holistic take on what digital transformation actually implies.
These days, it’s clear that end customers also expect craftsmen to be up to speed on digital technology. This starts the moment they go looking for something. We ascertained that 89% of end customers prefer to work with craftsmen that have positive reviews on the internet. Digitech is a central aspect of social interaction among young people. It’s a fundamental part of the world they live in. So in this respect, a company’s “digital impression” also plays a key role in recruiting young talent and skilled workers, even if it’s not the key factor when it comes to making a career in construction and building interiors more attractive. This is where other aspects will need to be looked at, such as the extent to which careers are compatible with people’s private lives and the family, or other factors relating to the world they live in.
So what comes next? Will you continue to develop the digitalization barometer?
The aim when we set up the digitalization barometer was that we’d be able to keep updating the study. The results we have now can be a kind of point zero; for the first time we have empirical evidence of what certain people already suspected or sensed from personal experience. Of course our aim and aspiration is to continue with the study. To keep going, we’re looking for support and backing again, people who want to get involved in running the study and join us in moving the manual trades to the next level.