{"id":159787,"date":"2026-03-02T07:00:30","date_gmt":"2026-03-02T07:00:30","guid":{"rendered":"https:\/\/www.pbctoday.co.uk\/news\/?p=159787"},"modified":"2026-02-27T17:41:46","modified_gmt":"2026-02-27T17:41:46","slug":"why-modular-can-scale-why-it-so-often-doesnt","status":"publish","type":"post","link":"https:\/\/www.pbctoday.co.uk\/news\/mmc-news\/why-modular-can-scale-why-it-so-often-doesnt\/159787\/","title":{"rendered":"Why modular can scale, and why it so often doesn\u2019t"},"content":{"rendered":"

Upcoming World of Modular (April 20\u201323, 2026) speaker Erlend Spets examines the common hurdles faced by scaling modular enterprises -and how to overcome them<\/h2>\n

Erlend Spets, Associate Partner at McKinsey & Company, comes to modular with an engineer\u2019s instincts and a systems thinker\u2019s perspective. Trained as a structural engineer, he says the profession gave him \u201cfirsthand insight\u201d into both the opportunity and the challenge facing construction.<\/p>\n

\u201cConstruction is the world\u2019s largest ecosystem, representing around 13% of global GDP,\u201d Spets says. Yet despite its scale, the industry has seen \u201climited productivity growth over the past 80 years\u201d and has been slow to adopt digital tools and processes.<\/p>\n

He also frames the stakes in environmental terms. \u201cConstruction impacts about 40% of global CO2 emissions,\u201d he notes, with roughly one-third direct and two-thirds indirect. That scale is exactly why he believes meaningful change in construction can drive outsized sustainability gains.<\/p>\n

The digitization myth: tools don\u2019t equal productivity<\/h3>\n

As a speaker at the upcoming 2026 World of Modular<\/a>, presented by the Modular Building Institute<\/a>, Spets will dive into one of his clearest messages: that construction\u2019s digitization story gets oversimplified. Many teams assume that adopting tools like Building Information Modeling will automatically lift productivity.<\/p>\n

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Erlend Spets, Associate Partner at McKinsey & Company, was the keynote speaker at the Modular Building Institute\u2019s World of Modular Europe conference in Brussels.<\/figcaption><\/figure>\n

\u201cOur research has shown that this relationship is not always straightforward,\u201d Spets says. \u201cIt depends on how BIM is embedded into workflows and whether it\u2019s paired with organizational changes and collaboration.\u201d Without that integration, he adds, the benefits \u201ccan fall short of expectations.\u201d<\/p>\n

For modular and offsite construction, that distinction matters. The technology is only part of the equation. The operating model must change with it.<\/p>\n

Who \u201cgets\u201d modular, and who treats it as a niche<\/h3>\n

Spets draws a sharp line between executives who treat modular as a one-off tactic and those who see it as a strategic operating model.<\/p>\n

\u201cLeaders who truly \u2018get\u2019 modular recognize that it\u2019s not a plug-and-play solution,\u201d he says. \u201cThey understand that scaling modular requires a continuously improving building system, deliberate influence on early design decisions, and learning from jobsite realities.\u201d<\/p>\n

They also appreciate the structural challenge. \u201cIt\u2019s doable, but it\u2019s not simple,\u201d he adds, emphasizing the need to maintain control over the value chain and \u201cscale thoughtfully.\u201d<\/p>\n

In short, modular success depends less on enthusiasm and more on discipline.<\/p>\n

Where modular delivers the biggest gains<\/h3>\n

McKinsey\u2019s research suggests modular delivers the strongest payoff where speed and labor constraints dominate.<\/p>\n

\u201cModular can reduce construction timelines by up to 50% by moving work offsite and allowing parallel site preparation,\u201d Spets says. It can also reduce onsite labor needs by \u201cas much as approximately 40%,\u201d particularly in repeatable building types and in higher labor-cost markets.<\/p>\n

But he quickly adds a caveat: \u201cThe success of modular also depends heavily on execution and integration across the value chain.\u201d<\/p>\n

The most common failure point: Alignment arrives too late<\/h3>\n

If there is a single recurring theme in Spets\u2019 analysis, it is timing.<\/p>\n

\u201cEarly stakeholder involvement is essential,\u201d he says. When modular decisions come late, teams are forced to retrofit design, supply chain, and construction processes into an approach that requires upfront coordination.<\/p>\n

That late alignment often undermines the very efficiencies modular is meant to create.<\/p>\n

What North America can learn from global leaders<\/h3>\n

Spets points to several markets that have pushed modular adoption further: Singapore, Japan, China, the Nordics, and Germany.<\/p>\n

\u201cWe see strong adoption in multistory residential and single-family housing, especially using element-based approaches,\u201d he says. Hotels and public buildings such as schools, kindergartens, and healthcare facilities also stand out.<\/p>\n

For North America, the lesson is not to copy blindly but to understand how these markets integrate modular into repeatable building types and public infrastructure, and how they align design, manufacturing, and delivery from the outset.<\/p>\n

A better question for World of Modular attendees<\/h3>\n

Asked what a first-time World of Modular attendee should ask exhibitors, Spets offers a question that quickly separates marketing from substance:<\/p>\n

\u201cWhat is unique about your modular building system, and where can you demonstrate proven benefits compared to in-situ construction?\u201d<\/p>\n

He also encourages owners and developers to ask how they can actively work with suppliers to unlock modular\u2019s full benefits.<\/p>\n

A framework for scaling successfully<\/h3>\n

Spets says his World of Modular session will bring \u201cfacts and figures from analyzing over 700 companies in modular construction globally.\u201d<\/p>\n

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Erlend Spets, Associate Partner at McKinsey & Company, was the keynote speaker at the Modular Building Institute\u2019s World of Modular Europe conference in Brussels<\/figcaption><\/figure>\n

While there is no single recipe for success, he points to three recurring characteristics among companies that scale profitably:<\/p>\n