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OPTIMIZING THE ECONOMIC ADVANTAGE OF UZBEKISTAN’S
CONSTRUCTION ENTERPRISES THROUGH DIGITAL
TRANSFORMATION
Badirov Dilshod Abdug’aniyevich
Master’s degree student at the Higher School of
Business and Entrepreneurship under the Cabinet
of Ministers of the Republic of Uzbekistan
https://doi.org/10.5281/zenodo.15705470
As digital public infrastructure will play a key role as the global community
seeks to meet the UN Sustainable Development Goals (World Economic Forum,
2024), the digitalization presents both challenges and opportunities for
construction enterprises and essential for effectively meeting the demands of
rapid construction. So, the growing construction industry requires deep reforms
in the line with modern requirements.
This article aims to provide a comprehensive analysis of the
implementation of BIM, digital twins, blockchain technologies by international
construction companies
(in the example of “Neom”), highlighting the benefits, challenges, and best
practices. The study examines the definition and classification of BIM, digital
twins, blockchain technologies, the advantages of BIM, digital twins, blockchain
technologies over traditional approaches, and the practices of construction
company in adopting and integrating these innovative solutions.
Uzbekistan’s GDP, as of the end of 2022, construction accounted for
6.7%, up slightly from 6.6% in 2021. Uzbekistan’s GDP was (2022):
~$80.39 billion (World Bank).
And GDP from Construction = 0.067×80.39 billion≈5.39 billion USD. This
highlights that even a 1% increase in sectoral efficiency could generate an
additional $53.9 million in national output.
But, compare to many other industries, the construction industry has
traditionally been slow down at technological development. This industry is
undergoing a significant transformation due to the rapid advancement of digital
technologies to boost the industry’s economic potentials.
Construction industry - small and medium-sized enterprises like a general
contractor, material suppliers, and real estate developers in some specific
regions, faces a real problem due to misjudging their own economic potential.
When that happens, businesses can fail and people lose their jobs.
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For example, in the Table 1.1 (Economic activity types) below, shown the
investments in fixed capital by small enterprises and microfirms by economic
sectors (as a percentage of total) of Uzbekistan.
There shown the contribution of construction to the country's economy. It
takes 3d place, according to the table, but between 2020 to 2023 we can see a
little bit collapse of construction businesses, as a main economy contributor,
when the other economic activities had been getting raised.
Here we have also another question: why local construction companies
can’t participate in international projects, at least at the level of the CIS
countries?
Because, we did not enough digitalize the industry and qualification of
employees does not comparable.
So, there is a need to study key aspects of managing the economic potential
of construction industry enterprises in the context of digitalization, to search
new doors to enter to the open construction market.
The construction industry holds significant economic potential,
contributing to various aspects of a nation's development. Here's a well-known
breakdown key economic impacts:
•Job Creation
•Economic Growth
•Infrastructure Development
•Housing Development:
•Technological Innovation:
•Competition: The industry is competitive, with numerous players vying for
projects. This can lead to price pressures and challenges for smaller companies.
•Labor Shortages
But, here also some problematic potentials of the industry, need to be
studied, in case of avoidance some spaces. Among them, the main ones today
are: resource efficiency potential, innovation potential, and labor productivity
potential.
Imagine a dynamic digital twin that goes beyond static 3D modeling. This
“cognitive digital twin” would continuously assimilate real-time data from IoT
sensors deployed on construction sites.
By leveraging advanced AI and machine learning algorithms, the system
could predict inefficiencies, anticipate maintenance needs, and optimize
resource allocation in real time. Integrating blockchain technology into this
model would create a secure ledger for all digital transactions—from raw
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materials procurement to smart contract execution. This fusion not only elevates
monitoring and performance control but also assures data transparency and
trust among all stakeholders.
Productivity Improvement with Digital Twin Integration (assumption from
studies McKinsey, WEF):
•BIM + Digital Twins can improve labor productivity by 20-25%.
•Assume 200,000 construction workers in Uzbekistan.
•Average productivity: $10,000/year per worker
Productivity Gain=200,000×10,000×0.25=500 million USD/year
Resource Wastage Reduction Typical material wastage (without digital
planning): ~10%
•Annual material cost in Uzbek construction: $2 billion
With BIM and Digital Twins: Potential waste cut to 3%
Material Savings=(0.10−0.03)×2 billion=140 million USD
Using BIM (Building Information Modeling)
BIM is a digital process used in construction and architecture to create and
manage all the information related to a building project throughout its entire
lifecycle, from design and construction to operation and maintenance. Also it
includes resource efficiency, innovation potential, and labor productivity.
Key features of BIM technologies:
3D Digital Model: BIM involves creating a detailed 3D model of a building
that includes not just the geometry, but also data about materials, systems, and
components.
Rich information: Each element in the model (like a wall, door, or HVAC
system) carries detailed information - such as cost, dimensions, manufacturer,
installation dates, and maintenance schedules.
Collaboration Tool: BIM allows architects, engineers, contractors, and
clients to collaborate in real time on a single shared model, reducing errors,
rework, and misunderstandings. Also better visualization, like a 3D models help
stakeholders see what the final project will look like and understand design
intent more easily than 2D drawings. Here some other benefits:
Lifecycle Management: BIM isn't just for design and construction — it
supports the whole building lifecycle, including facility management after the
building is completed. Improved coordination and fewer errors lead to shorter
project timelines.
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Simulation & Analysis: BIM tools can simulate construction sequences,
lighting, energy efficiency, clash Detection structural behavior, and more —
helping teams make better decisions before building even starts.
Accurate Cost Estimating (5D BIM) Materials and quantities are extracted
from the model, enabling better budgeting and more reliable cost forecasts.
Regulatory Compliance BIM helps meet local codes and standards more
efficiently with automated checks and simulations.
Reduced Waste Precise planning means fewer material overruns and less
rework.
Hypothetically, we can see the figure below in the case of Uzbek
construction industry:
Factors
Uzbekistan Score (0–10)
Global Avg
Gap
BIM Implementation
3
6
-3
Digital Twin Integration
2
5
-3
Blockchain for Contracts
1
4
-3
Worker Digital Literacy
4
6
-2
Inconveniences of Building Information Modeling:
Cost Software licenses, hardware upgrades, and staff training can be
expensive up front.
Training Teams need time to learn BIM tools and workflows, which can
slow adoption.
Complexity: For small or simple projects, BIM may be more complex than
necessary.
Data Management Managing: large volumes of detailed information
requires robust systems and protocols.
Legal and Ownership Issues It can be unclear who owns the BIM model or
who is liable for errors in shared data.
Compatibility of software: Different teams may use different BIM software,
leading to file compatibility or versioning issues.
Resistance to Change Traditional firms or professionals may be hesitant to
switch from 2D CAD to BIM due to comfort with older methods.There is a good
case with the megaproject called “THE LINE” by Neom, a 106-mile-long city in
the Saudi Arabian desert, which construction work was started i nOctober2022,
on this megaproject.
The plan is for nine million people to live within a mere 33 square
kilometers—an area comparable to the size of Venice, Italy, which is home to
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only about 260 000 inhabitants. According to the press release and advertising,
it was an ambitious with the show of the future structure of the megacity.
Using information modelling, the Neom escapes from wasting resources,
which are the main component of the construction policy.
What kind of resources did Neom save with the help of digital technologies?
Over ordering: By creating highly detailed 3D models and simulation
environments long before any physical work begins, Building Information
Modeling (BIM) and digital twin technologies ensure that every component of
the design is precisely calculated and tested. This preconstruction testing
reduces the likelihood of over ordering materials and minimizes rework caused
by design errors. As a result, less steel, concrete, and ancillary materials are
wasted during construction.
Optimized Supply Chains: Digital platforms seamlessly integrate
procurement, storage, and on-site usage.
Efficient Simulation of Energy Needs: The use of digital simulation allows
planners to forecast energy requirements during both construction and the
operational phases.
Real-Time Monitoring: Smart sensors and AI-driven analytics adjust energy
usage on the fly, ensuring that resources like fuel and electricity are allocated
only where necessary,
Precision Engineering and Smart Water Management Digital modeling
helped them design systems that carefully control water consumption for
construction activities. Smart sensors monitor usage in real time, helping to
prevent overuse or spillage.
Energy-Efficient Design and Construction: With the integration of
renewable energy sources (like solar and wind) and digital oversight of energy
consumption, the project significantly reduces its carbon footprint.
Low-Emission Transportation and Automated Processes: The digitization of
logistics—from inventory scheduling to transport route optimization—ensures
that fewer fossil fuels are burned
Time and Labor Resources: The digitization of construction workflows
through smart contracts and AI-driven scheduling enhances labor productivity.
Reduced Errors and Rework: With detailed digital planning, mistakes are
identified in advance.
Neom increased material efficiency, it can be calculated by comparing the
cost or volume of materials incorporated into the final structure against the total
materials purchased, decreased waste reduction rates - this involves tracking
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waste streams and implementing waste management strategies and did improve
energy efficiency.
So, despite of some above mentioned nuisances, the government should
continuously support the active implementation of BIM, digital twins, blockchain
technology solutions in the construction industry in terms of efficiency and to
gain the United Nations Sustainable Development Goal 13.
(Table 1.1) Economic activity types
Total by types of economic activity (as a percentage of the
total)
2020
2021
2022
2023
100
100
100
100
including:
agriculture, forestry and fisheries
7,4
6,9
5,1
3,5
Industry
48,9
46,1
51,5
62,9
Construction
10,3
15,6
12,8
10,4
Trade
13,4
8,3
7,7
7,7
Transportation and storage
3,4
2,3
4,1
2,9
accommodation services
2,7
3,6
1,4
2,3
information and communication
0,7
0,8
0,7
0,4
financial and insurance activities
0,5
0,1
0,1
0,1
Education
0,4
0,3
0,4
0,2
health care and provision of social services
1,9
2,8
2,7
1,2
arts, entertainment and recreation
0,4
0,6
0,3
0,1
other types
10
12,6
13,2
8,3
References:
1.
Information from “Uzbekistan - 2030” strategy;
2.
Construction in Uzbekistan (Journal, 2024)
3.
International Conference on the 50th Anniversary of the Department of
Informatics (Silvia Parusheva, Varna University of Economics, 2019);
4.
Materials from the World Economic Forum, 2017;
5.
Global CIO, November 2, 2023;
6.
Priority directions for developing the economic potential of the
construction industry of the republic of Uzbekistan (Ismailov A.M Associate
Professor of Tashkent State University of Economics, Ph.D. Tashkent,
Uzbekistan. Tashkent, 2023) (Economics and Innovative Technologies E-
journal).
7.
Megia, J., Sánchez-Lasheras, F., Liébana-Cabanillas, F., & Martínez-
Martínez, V. (2021). Renewable energy sources and sustainable development: A
ACADEMIC RESEARCH IN MODERN SCIENCE
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bibliometric analysis and systematic review of the literature. Sustainability,
13(7).
8.
Nikolai Efremov and Maria Efremova. (2022). The Benefits of Green
Technologies in the Construction Industry. Journal of Sustainable Construction,
15(2).
9.
Internet materials.
