Google technology could halve construction costs

Google's secret development unit has developed a technology that could earn the company $120 billion a year.

Google X, the company's secret development unit, has developed a new construction technology. A report by Google Inc. (Nasdaq: GOOG) founders Sergei Brin and Larry Page to the company's management states that this method, once it is completed and implemented by the global real estate market, could potentially generate $120 billion a year for the company. The global construction market is estimated at $5 trillion a year.

Google X is engaged in the development of secret innovative projects that are not core to the company's business, such as the driverless car and augmented reality glasses. Google X is the company's main initiative to diversify its sources of income.

Page initiated the development of the construction technology at Google X in January 2011, when he was responsible for the unit. In April 2011, Brin took over responsibility for Google X, at the later stages of development, and Page was appointed CEO of Google.

At the start of the development, Google X was run by Sebastian Thrun, who founded the unit. He is considered a leading global expert in artificial intelligence and developed Google's driverless car. He was succeeded in August 2012 by computer engineer Astro (Eric) Teller, who started out at Google with the responsibility of locating and developing new products.

Unlimited planning options

In 2011, Teller was appointed head of Google X's construction technology project, which had a budget of $5 million. Senior hardware engineer Nicholas Chim was appointed team leader. The project initially included ten senior computer engineers and programmers, who were later joined by economists and real estate and marketing experts.

The Google X engineers initially called the development of the invention Genie (after the genie in Aladdin in "1001 Nights"). Genie, the development team told Google's management, was a platform with online-based planning applications to help architects and engineers in the design process, especially for skyscrapers and large buildings. The platform includes planning tools of expert architects and engineers and advance analytics and simulation tools. Genie standardizes and automates the design and construction processes with unlimited design options, enabling an architect to preserve the building's uniqueness in the urban environment.

In the development team's report to Page, Brin, and Google's management, Genie was presented as a revolutionary technology for the construction of sustainable and environmentally-friendly buildings of a quality never before known. The technology was presented as something that will change the conservative global construction industry through a fundamental and revolutionary change in how buildings are designed, built, and maintained, saving trillions of dollars.

In the report, the Google X team estimated that Genie could save 30-50% in prevailing construction costs and shorten the time from the start of planning to market by 30-60%. As previously mentioned, the Genie team estimated that the platform had the potential of generating $120 billion a year for Google.

As Genie's development progressed and a prototype was built, the Google X team met leading US contractors, including the developers of large buildings, leading construction engineers, and top architects. The team said that the responses were enthusiastic.

Genie's spinoff

With the completion of the first development stage and creation of the prototype, Google decided to spinoff Genie from Google X, and to pursue its development as a separate company, Vannevar Technology Inc., which is registered in Delaware.

Vannevar's three founders are Teller, who headed the Genie project at Google X and was appointed to run the unit; Chim, who headed Genie's computer engineering team; and Jennifer Carlile, a software engineer in Genie's development team.

Vannevar has 14.4 million shares, the distribution of which has not been disclosed, and it raised $2.2 million when it was established. It discloses few details, not even an address. The only way to contact the company is through a Los Angeles law firm.

On its website, Vannevar's logo says, "Reimaging building design for a more sustainable future." IDEAbuilder says, "Vannevar Technology is a venture-backed startup founded by Google engineers that are developing an open cloud-based collaboration platform for building delivery."

A wasteful industry

The construction industry accounts for 10% of global GDP. It is the largest consumer of global resources and raw materials - 50% - and global energy supplies - 48%. It also creates the largest amount of global solid waste - 40% - and is responsible for 50% of greenhouse gas emissions. It is the world's most wasteful industry and the main contributor to the deterioration of the global environment.

The global construction market is estimated at $5 trillion a year, including $1 trillion in the US, and it is growing rapidly. The world's urban population now tops 3.5 billion, a third of whom live in city slums.

With the rapid growth in global urbanization, the world's urban population is projected to double over the next 40 years. Under conditions of business as usual, traditional methods of construction, two-thirds of the world's urban population will live in slums from Rio de Janeiro, through Johannesburg, Nairobi, and Mumbai, to Beijing. It will therefore be necessary to double the world's housing inventory by 2050.

In contrast to the growth in productivity and production capacity in every other industry, the construction industry is not keeping pace, and its output is actually falling, reflected in the widening gap between supply and demand.

Published by Globes [online], Israel business news - www.globes-online.com - on October 16, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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