Dawn of the Disruptors

The demolition and construction equipment sector is ripe for disruption by an industry outsider. Could it happen?

Bookshops were once a mainstay of high streets and shopping malls up and down the land and across the world. Many people – myself included – could while away the hours browsing the new releases; looking admiringly at the covers; wishing we had both the time and the intelligence required to consume all the classics. And we did so whilst breathing in that heady aroma of paper and ink that marks bookshops as unique.

And then, one day, our heads were turned. A man named Jeff Bezos believed that the feel and the smell of the books were less important than the cost and the convenience. He was right. So right, in fact, that he then brought the same level of convenience to other items. Pretty soon, he had single-handedly redrawn the retail landscape while rendering bookshops and entire high streets redundant.

In my old house, we had a kitchen drawer that served a single purpose. It was used to house takeaway menus. Depending upon the prevailing mood within our household, we could delve into that drawer and – with nothing more than a phone call – satisfy our cravings for Italian food, Indian food, Chinese food, Thai food. That drawer was a gateway to a global culinary feast.

All those menus are now gone. They have been replaced by an app, which means we don’t even have to negotiate those tricky telephone conversations in which you tried to correctly pronounce the names of foreign dishes without being racially insensitive.

And then, of course, there is Elon Musk. Setting aside the somewhat interesting way that he salutes a US presidential inauguration, Musk revolutionised not just the automotive industry; he is very close to eating NASA’s lunch too with his Space X programme.

Whether it is Jeff Bezos with Amazon, Elon Musk with Tesla and Space X or the creators of Uber Eats, these individuals and their companies have targeted a market sector and, in a very short space of time, turned it on its head.

They are what we now know as “disruptors”; and they have changed the way we buy our groceries, gather and consume our news, listen to music, watch movies. You only have to look at the UK’s dying high streets to see the impact these disruptors have had upon the entire retail experience.

Is the construction equipment sector due for disruption?

Which begs the question. Is the construction equipment sector due for disruption? The sector is worth billions and, deliberately or otherwise, the incumbent manufacturers appear to have left the door ajar.

The household names of the car industry sat on their laurels, assured that their petrol and diesel-powered models would feather their respective nests now and long into the future. Many in the field of demolition and construction equipment have done likewise.

There are outliers, of course. JCB with its pioneering work in the field of hydrogen power; Liebherr’s giant leaps in autonomous mining equipment; Volvo’s exceptional work in the sphere of emissions reduction; and Bobcat’s remarkable embracing of technology.

But, in many instances, the sector has become slow and intransigent. Like the oil and gas companies trying to squeeze every last dollar from their commodities before those commodities are outlawed once and for all, some manufacturers are clinging stubbornly to diesel fuel; to machines with cabs that we’re increasingly struggling to fill; to producing machines that are good for a single but very short life but that cannot be effectively remanufactured, rebuilt or resold for a decent price.

Against that background, the door isn’t just ajar for a disruptor; it is wide open. And there is an “all are welcome” sign hanging outside.

Conventional wisdom says that the barrier to entry is too high; that it would be impossible for a newcomer to make a significant impact in the field of demolition and construction equipment.

I beg to differ. If Elon Musk can disrupt the automotive sector, then the construction equipment industry is there for the taking.

And let’s not kid ourselves. Some of the equipment on offer today is extraordinary. Each excavator, each wheel loader and each dozer is an amazing feat of engineering.

But, at heart, they are an engine, a transmission and some hydraulics arranged in what we currently believe to be an efficacious manner. All of that could be very easily replicated, improved or entirely replaced should someone have a mind to do so.

If the machines of the future are to be fuelled by something other than diesel, the engine expertise currently within the sector will be largely meaningless. If our machines are ultimately driven by servos and motors, then there will be no need to acquire hydraulic knowledge and experience. That too will be redundant.

I see it like this. The industry has been travelling down the same road for a century or more. But it has come to a crossroads.

Many companies will choose to continue down their chosen path until it is no longer environmentally permissible or economically viable to do so. Some will turn left and head down the road marked “electric”. Some will turn right and take the “hydrogen” road.

But there remains a very real possibility that, as current manufacturers slow on their approach to this vital junction, someone new could enter the race, like an F1 car on fresh tyres storming from the pit lane. They could be nimble enough and hungry enough to catch and potentially overtake those industry veterans that are weighed down by history and that have obdurately continued down the road well-travelled.

Whether that’s a good thing remains to be seen. If a disruptor does enter the race and makes things better for customers, operators and the environment, I would welcome them with open arms.

If, however, that disruptor shows any signs of megalomania or a weird way with a crowd salute, then I am very much out.

This topic was the subject of an in-depth discussion on today's after show chat. You can listen to the resulting podcast here.