Current Industry Landscape

Blockchain technology has the potential to revolutionize the Architecture, Engineering, and Construction (AEC) industry by improving efficiency, enhancing collaboration, and reducing the risk of fraud and disputes. This technology enables secure, transparent, and tamper-proof digital records, which are particularly useful in complex, multi-stakeholder projects:

Reducing inefficiencies and costs:

• The global construction industry is valued at over $10 trillion annually, with a projected growth rate of 3.9% per year from 2018 to 2023 (Statista, 2021).
• A report by McKinsey in 2016 estimated that the construction industry suffers from a global productivity problem, with an average of $1.6 trillion in annual economic value not being captured due to inefficiencies.

Blockchain can help reduce these inefficiencies by streamlining the management of contracts, payments, and project documentation. This would not only save time but also reduce costs associated with delays and errors.

Enhancing collaboration and communication:

• AEC projects typically involve numerous stakeholders, including architects, engineers, contractors, and clients, often located in different parts of the world.
• The average number of parties involved in a construction project ranges from 8 to 12 (Designing Buildings Wiki, 2021).

Blockchain can facilitate better collaboration between these stakeholders by providing a secure, shared platform for exchanging information and managing tasks. This ensures that all parties have access to the most up-to-date and accurate data.

Securing intellectual property and reducing disputes:

• The AEC industry is known for its high rate of disputes, with the global average value of disputes in 2020 being $30.7 million (Arcadis, 2021).
• Intellectual property (IP) theft is also a significant concern in the AEC industry, with the theft of designs, plans, and engineering data costing companies millions each year.

By using blockchain to store, track, and verify project documentation and design files, it becomes possible to establish a transparent and tamper-proof record of ownership and IP rights. This helps to reduce the risk of disputes and protect valuable assets.

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Case Studies

Provenance Chain Network (PCN): This blockchain-based platform, developed by UK-based company Provenance Chain, aims to streamline the construction procurement process by creating a secure, shared ecosystem for managing tenders, contracts, and payments. The platform has been successfully piloted with several companies, demonstrating potential cost savings and increased efficiency.

AEC Chain: A joint venture between China State Construction Engineering Corporation (CSCEC) and the Tsinghua University School of Architecture, AEC Chain is a blockchain platform designed to manage the entire lifecycle of construction projects. The platform enables better collaboration between stakeholders, secure storage of project data, and efficient tracking of project progress.

Arup and the University of Cambridge: Global engineering firm Arup collaborated with the University of Cambridge to explore the potential applications of blockchain technology in the AEC industry. The partnership has led to the development of several proof-of-concept projects, including one focused on improving the management of construction contracts.

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Architects & Royalties: The Past

It is difficult to provide exact figures for how much famous architects were paid for designing famous structures, as the fees can vary widely depending on the scale and complexity of the project, the reputation of the architect, and the time period in which they were working. Additionally, many architects are paid a percentage of the total construction cost, which can be influenced by factors such as materials, labor, and economic conditions.

Here are a few examples of well-known architects and their famous structures, but keep in mind that these are approximate figures and may not account for inflation or other factors:

Frank Lloyd Wright: Wright designed many iconic buildings during his career, such as Fallingwater and the Guggenheim Museum. It is estimated that he may have earned between 5–15% of the construction cost for his projects, but exact amounts are not publicly available.

Le Corbusier: Known for designing Villa Savoye and the Unite d’Habitation, Le Corbusier’s fees would have varied based on the project. Again, exact amounts are not available, but he may have earned a similar percentage to other architects of his time.

Zaha Hadid: As a contemporary architect, Zaha Hadid’s fees were likely more transparent. Her firm designed the London Aquatics Centre for the 2012 Olympics, which cost around £269 million. If her firm received a standard fee of around 5–15% of the construction cost, they could have earned £13.5-£40 million for the project.

Norman Foster: Foster’s firm designed the iconic Gherkin building in London, which cost an estimated £138 million to construct. If his firm received a standard fee of around 5–15% of the construction cost, they could have earned £7-£20.7 million for the project.

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Architects & Royalties: The Future

With the advent of new technologies, particularly blockchain and Non-Fungible Tokens (NFTs), the landscape of the art and design world is undergoing significant changes. By minting their designs as NFTs, architects can take advantage of these changes to create new revenue streams, protect their intellectual property, and increase the value of their work.

Here are a few reasons why architects should consider minting their designs as NFTs:

Ownership and provenance: NFTs use blockchain technology to create a decentralized digital ledger that securely records the ownership and provenance of digital assets. By minting their designs as NFTs, architects can establish a clear and indisputable record of their authorship, ensuring that their work is correctly attributed and valued.

Scarcity and uniqueness: NFTs are unique digital tokens that cannot be replicated or replaced, which gives them inherent value due to their scarcity. By minting a limited number of NFTs for each design, architects can create a sense of exclusivity and increase the value of their work, just as limited edition prints or numbered artworks do in traditional art markets.

Intellectual property protection: NFTs can help architects protect their intellectual property by ensuring that any digital reproductions of their designs are traced back to the original creator. With the rise of digital design tools and online platforms, it has become increasingly easy for designs to be copied or plagiarized. NFTs can serve as a deterrent to unauthorized use and provide a clear legal framework for the enforcement of copyright claims.

Royalties and secondary market sales: One of the most significant benefits of NFTs for architects is the ability to earn royalties from secondary market sales. When an NFT changes hands, a smart contract can be programmed to automatically pay a percentage of the sale price back to the original creator. This provides architects with a passive income stream and ensures they continue to benefit from the success of their work.

In it’s simplest terms, let’s take the scenario of the architect responsible for delivering the design of the house that Michael Jackson lived in during his childhood. The fee for such work would have been in-line with that of a mid-60’s, Indiana based architect. If this work was available as an immutable token of authenticity today, it would have experienced an increase in-value proportional to that of the singer’s profile.

This is why royalties from secondary sales are a non-negotiable for the next generation of professionals in the field of AEC. Architects design buildings to stand the test of time and to develop as commodities. We should empower the original creator’s to benefit from this appreciation in value through royalties. This currently does not exist.

In conclusion, the emergence of NFTs offers architects an opportunity to adapt to the changing digital landscape and secure new sources of revenue, recognition, and creative freedom. By minting their designs as NFTs, architects can ensure their work is valued and protected, while also embracing the potential for collaboration and innovation that the technology affords.

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