IoT and 5G Integration in Construction Industry

The diagram below shows the main stages of the work with a brief description of each of them. It also shows all the control points and where each of the decisions leads. In addition, the main external agents and artifacts that are used in the process are listed here.This diagram is not an absolute and sufficient description of the entire process model, but it allows you to quickly understand the basic principles and sequence of steps. The diagram also complements the description of the process, explicitly demonstrating its non-linearity and relationships. In General, the model description is a set of diagrams with a detailed description of each of the stages.ConclusionThe resulting model of the processIoT and 5G Integration in construction industry is based on the results of research and work of world practitioners in the field of innovation. By combining various approaches, techniques and relying on the received field experience, we have obtained a result that will allow companies to effectively build the process of creating innovations, avoiding the repetition of already discovered problems. At the same time, the very need for an orderly process of creating innovations on the part of companies, as already described earlier, is caused by the increasing complexity of creating innovations and maintaining a competitive advantage. It is worth noting that in the Russian market, since it is catching up [6], no such work has been conducted with empirical research, which gives scientific novelty to the work.Human development throughout history has been accompanied not only by physiological changes, but also by inventions that have simplified life, increased the efficiency of labor, and made it possible to adapt to new conditions. One of the key differences between humans and animals is the ability to create tools and use them as a means of producing material goods. And then you immediately remember the invention of the wheel and its use in structures that simplify the transportation of heavy loads, the invention of the steam engine, which allowed you to abandon manual labor and animal labor, the invention of radio, which allowed you to transmit information at the speed of light for hundreds of kilometers. And this list can go on indefinitely. However all these things have one common characteristic: they were new to the world, meaning they didn't exist or weren't used before.Consider another example. In 2000, in California, Steve jobs, after returning to the management of Apple, analyzed the market for portable players and decided to create an easy-to-use, easily replenished MP3 system that will appeal to the younger generation. Apple at that time already had a capitalization of millions of dollars, but thanks to the management style of Steve jobs, it retained the spirit of a startup. So when creating this product, they did not develop all the components from scratch, conduct long-term research and build complex processes. They took a newly released Toshiba compact hard drive, a Sony battery, a microprocessor, and electronics from Texas Instruments and developed software that combined all the components and most importantly allowed them to play files with the MP3 extension that was released back in 1993, which provided access to a huge existing library of audio files. And the last component was the iTunes app, which allowed you to connect your personal computer to a new device and provide an easy way to download content. [7] If you analyze what Apple has done, they have only developed software from scratch, saving millions of dollars and thousands of hours of research work.On October 23, 2001, the world saw a new product – the iPod, which remains the most successful innovative product to date. In just 4.5 years, the company has sold more than 50 million devices. For comparison, the closest competitor Sony Walkman took 10 years [1]. And if you compare the history of the creation of these products, it took only 1.5 years to develop the first one, since Apple simply collected the technologies available on the market, combined them into one case and wrote the software, while Sony brought its long-term experience in the industry and technologies created over decades inside the company to its product.This brings us to the first part of defining what innovation is. Based on the conclusions that researchers make on this topic, and based on the examples described above, it can be concluded that an innovation is a new or innovative solution:- new solutions are simply more effective, efficient and sustainable than existing practices;- innovative solutions are new to the world, that is, they have never been developed before.These conditions are necessary, but not sufficient. Let's look at another aspect of innovation. In 2004, Microsoft, in collaboration with watch manufacturers, released the world's first smartwatch, the SPOT Watch, which was a real revolution of the time. SPOT stands for Smart Personal Object Technology ("smart personal object technology"), a Microsoft initiative to personalize consumer electronics and other everyday devices. SPOT Watch was its flagship product, but the technology was also available for other products such as car navigation systems and coffee makers. SPOT was supported by the MSN Direct network, which allowed users to receive instant messages from Windows Messenger, as well as receive personalized news headlines, stock updates, and weather forecasts.For enthusiasts, this product looked like the perfect way to deliver information without having to carry a bulky laptop or even take out a smartphone. However, it soon became apparent that the SPOT Watch was a product that would always remain in search of its niche. They came out at a time when smartphones were just beginning to gain popularity, and users were not used to the similar mobile experience that the watch offered. In addition, the watch had a monochrome screen with a resolution of 90 × 126 pixels, which greatly limited its ability to display information. In addition, Microsoft built its infrastructure to transmit information to these clocks, so they had a geographical restriction on usage. Also added to this was a fairly high price, for which users, although they received a revolutionary device, but they either had no interest in it due to the same ultra-high revolutionism or shortcomings, or could not afford it, which turned this product into a major commercial failure. When bill gates finally closed the network service associated with SPOT technology in 2011, no one paid attention to it [9].This story shows that it is difficult to call an innovation a solution that does not benefit from its implementation. Thus, the solution that meets two requirements will be considered an innovation:- must be new or innovative, - should bring benefits from implementation.This is the fundamental concept around which all further discussions will be based. We have already given examples of innovations created by Apple and Microsoft, but they were a product for the end user, but innovation is not limited to this type alone.So, the first most popular type in construction Industry is product innovation. Robert Cooper defined a product as "anything that relates to an external market for sale, use, or consumption. This includes physical products, as well as software and services, combinations of services, hardware and / or software." Accordingly, a product innovation is the release of a commercially successful product that is new to the world or the company.Product innovation is something without which a modern Corporation will lose its competitive advantage and sink into oblivion. The most famous international companies like Apple, Procter & Gamble, Toyota, and GE rely on a constant "stream" of successful new product releases [1]. For example, in the aforementioned P & G, the company's strategy is to use all possible external and internal resources to provide the company with a sufficient number of ideas that will pass through the product funnel to become new products of the company, which will allow it to maintain its position in the market [9]. The "innovate or die" principle” ("innovate or die») it has become fundamental in the market.In turn, you need to understand that today the creation of products with everyone is becoming more and more difficult. Thus, according to Robert Cooper, the number of brand-new products in company portfolios has doubled in the two-thousandth compared to the nineties, while now one-quarter of corporate income comes from products that they did not sell three years ago (and in some industries this figure reaches 100%) [1]. Research by consulting company Arthur D. Research has shown that from 2010 to 2012, efficiency and productivity decreased by 25%, but satisfaction with this level almost doubled [2]. Robert Cooper writes about the decline in R & d productivity due to the instability of the global economy and the lack of budgets for fundamental development, and that many top managers are aware that there is a real shortage of strong, valuable ideas. He also notes the fact that there are no truly innovative developments in the company's portfolios, and the pressure from investors only makes the situation worse [1]. Alexander Osterwald came to a similar conclusion in his article. He investigated why giant companies like Nestle fail to replicate the success of their most innovative products, and concluded that the problem lies in the fact that companies do not create a portfolio of potential winning projects, but believe that they can choose "winners" at once, which is why they fail [10]. The process of creating product innovations will be discussed in more detail later in this paper. At this stage, the main conclusion is that product innovations, although they look like a fairly obvious option, but at the moment their creation is accompanied by a lot of problems, which makes you think about other types of innovation. Let's consider another option. Henry Chesbrough described the situation that is happening in a rather conservative at first glance pharmaceutical industry. According to analysts ' estimates, the industry is in crisis: fewer new chemicals are approved for sale, regulatory requirements for government agencies are becoming more complex, and R & d costs for developing new drugs are constantly increasing. In this environment, the well – known company Johnson and Johnson conducted an experiment with one of their products-Velcade: a drug for multiple myeloma, a form of bone cancer. J & J offered the drug to European health ministries on the condition that if the drug is not effective in 90% of patients, it does not need to be paid for. The result of this experiment is not yet known, but in any case it is an interesting attempt to overcome stagnation in an industry where existing business models were in a state of crisis [11].A similar example is the October 2007 release of the album "In Rainbows" by Radiohead. The band's managers, along with the record company EMI, decided not to follow the standard release process, but to post the recordings on the band's website as an experiment. Fans were asked to pay as much as they chose to pay for the music, which also included additional merchandise with the band's logo. It must be said that the problems with the established business model in the recording industry were well known: CD sales fell significantly just a few years ago, while alternative music distribution channels, such as iTunes, began to gain polarity. As a result, the band's website had more than 3 million hits in the first 60 days after release, of which about 1/3 decided not to pay anything, while the remaining 2/3 paid an average of 4 pounds, which created a net income of about 2.67 pounds on average - much more than the band would have received under a normal business agreement [12].The examples described above described innovative changes in the business model, in order to obtain benefits and get out of a difficult situation. This brings us to the second type of innovation – business model innovation. But before defining this concept, let's define what a business model is.A business model is a complete description of the logical relationships through which a company creates benefits and value for its customers and for itself. A detailed description of this logic makes the business model visible, evaluated, and subsequently modified [13].The business model performs the following functions:• formulates a value proposition (i.e. the value created for users by a technology-based offer); • defines the market segment and specifies the mechanism for implementing the value (i.e. users for whom the technology is useful and for what purposes);• defines the structure of the value chain needed to create and distribute the proposed and complementary assets needed to maintain a position in the chain;• describes in detail the mechanism(s) of revenue from the offer;• assesses the cost structure and potential revenue (value proposition and value chain structure);• describes the firm's position in the value chain that connects suppliers and customers (including identifying potential partners and competitors);• formulate a competitive strategy that will give the innovative company an advantage over its competitors.Depending on the required level of detail, the business model can be based on the Business Model Navigator concept of the University of St. Gallen, as well as on the world-famous Business Model Canvas framework created by Alexander Osterwalder and Yves Pinier.Business Model Navigator describes the business model in a meta-perspective using four dimensions: What does the company offer its clients?Who is the target audience?How is a value proposition created?How does the company make money? [14]In this way, a company in construction Industry can change individual components of the business model in order to improve its efficiency. Business model innovation is the deliberate modification of an existing business model or the creation of a new one that better meets the needs of customers than existing business models. This definition satisfies the description of innovation, since it implies the creation of something new and the availability of benefits from implementation.However, all product innovations and business model innovations are not the only types of innovation. There are also fundamental innovations - "this is a creative idea that leads to a revolution in thinking" [14]. Such innovations are based on extensive research, knowledge, and theoretical evidence and lead to further research and development. Such innovations occur in collaboration with the scientific community, commercial laboratories and corporations. This type of innovation can lead to changes in thinking, expand existing theory, or become a breakthrough concept with a huge impact - perhaps even leading to the development of a new industry. Examples of such fundamental innovations are Einstein's theory of relativity, electricity, penicillin, the telephone, wireless communications, transistor, UNIX, and the Internet. A fundamental innovation includes an academic scientific component, which makes it somewhat accessible as a public good, as well as less protected from a commercial point of view.BibliographyCooper G. R. Winning at New Products: Creating Value Through Innovation. – New York: Hachette Book Group, 2017. – 448 с.Thuriaux-Alemán B., Eagar R., Johansson A. Getting a Better Return on Your Innovation Investment. – New York: Artur D. Little, 2013.Chesbrough, H. Open Innovation: The New Imperative for Creating and Profiting from Technology. – Boston: Harvard Business School Press, 2003. – 227 c.Jong M., Marston N., Roth E. 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