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Ask HN: Industries with low productivity growth that aren't highly regulated?

5 points by Pandabob ↗ HN
The one that comes to mind is the construction industry. In my experience it's very fragmented, uses subcontractors inefficiently and has a low penetration of software use.

What others come to mind?

5 comments

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rijoja
Really interesting question! Thank you for asking! That being said, is productivity really not growing in the construction industry? Also what sources do you have on low utilization of software? I suppose computer science have a very high saturation of competence on task management systems. Still keeping track of materials and so forth must be digitized since a long time along with the blueprints for the buildings and so forth?

With computer usage being so widespread isn't it quite unlikely that at no point someone would have interest in computers and any particular industry that tried to combine their knowledge from both fields.

So in short, is there really any low hanging fruit left? Also could you elaborate on why you say that the construction industry is not using software efficiently.

Pandabob
I've done some software projects in the construction industry, and the consensus I've gathered speaking with people working there is that the productivity growth in general has been abysmal in the industry. Granted, the issues there seem to be very complex and you probably won't solve anything with just more software.

You're right though that the use of software in the construction industry is probably as high as it is in any other industry, but anecdotally at least the way information (like what tasks to do and when) spreads in a construction site is severely lacking.

Also, I don't know how reliable this is, but at least McKinsey has written quite extensively about the productivity slump in construction: https://www.mckinsey.com/industries/capital-projects-and-inf... idustry

rijoja
Aha I do believe the task management situation. I feel that we programmers have been drilled with this like crazy. I doubt that the average builder have a concept of project management the way a programmer does.

I got a 404 on that page. Is the productivity decreasing or just stalling? I guess that since we're dealing with a industry that's thousands of years old it ought to be pretty close to optimal efficiency but perhaps there'd be some things to improve.

Are there standardizations between the systems. Like for example almost everybody in software development have used Jira* at some point?

adventured
The self-storage industry.

Hyper fragmented. 10% of the industry is owned by the industry giants (like Public Storage, which is a $39 billion publicly traded REIT), leaving 90% fragmented to small owners / independent businesses.

Very low productivity growth, very low innovation, poor management software options in the segment.

Someone could make a billion dollars just through consolidation of a tiny fraction of that mess, backed with better software and process.

Public Storage only has 5,600 employees and via their REIT structure spits off $1.4 billion in operating income every year.

The entire industry's value, going by what Public Storage is able to manage, is probably $1.2 to $1.5 trillion. And it's not going anywhere in the coming ~30 years, people are not going to suddenly stop storing their junk. It'll take an operator a lifetime to roll-up, consolidate even 1%-3% of the industry.