Upcoming World of Modular (April 20–23, 2026) speaker Erlend Spets examines the common hurdles faced by scaling modular enterprises -and how to overcome them
Erlend Spets, Associate Partner at McKinsey & Company, comes to modular with an engineer’s instincts and a systems thinker’s perspective. Trained as a structural engineer, he says the profession gave him “firsthand insight” into both the opportunity and the challenge facing construction.
“Construction is the world’s largest ecosystem, representing around 13% of global GDP,” Spets says. Yet despite its scale, the industry has seen “limited productivity growth over the past 80 years” and has been slow to adopt digital tools and processes.
He also frames the stakes in environmental terms. “Construction impacts about 40% of global CO2 emissions,” 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.
The digitization myth: tools don’t equal productivity
As a speaker at the upcoming 2026 World of Modular, presented by the Modular Building Institute, Spets will dive into one of his clearest messages: that construction’s digitization story gets oversimplified. Many teams assume that adopting tools like Building Information Modeling will automatically lift productivity.
“Our research has shown that this relationship is not always straightforward,” Spets says. “It depends on how BIM is embedded into workflows and whether it’s paired with organizational changes and collaboration.” Without that integration, he adds, the benefits “can fall short of expectations.”
For modular and offsite construction, that distinction matters. The technology is only part of the equation. The operating model must change with it.
Who “gets” modular, and who treats it as a niche
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.
“Leaders who truly ‘get’ modular recognize that it’s not a plug-and-play solution,” he says. “They understand that scaling modular requires a continuously improving building system, deliberate influence on early design decisions, and learning from jobsite realities.”
They also appreciate the structural challenge. “It’s doable, but it’s not simple,” he adds, emphasizing the need to maintain control over the value chain and “scale thoughtfully.”
In short, modular success depends less on enthusiasm and more on discipline.
Where modular delivers the biggest gains
McKinsey’s research suggests modular delivers the strongest payoff where speed and labor constraints dominate.
“Modular can reduce construction timelines by up to 50% by moving work offsite and allowing parallel site preparation,” Spets says. It can also reduce onsite labor needs by “as much as approximately 40%,” particularly in repeatable building types and in higher labor-cost markets.
But he quickly adds a caveat: “The success of modular also depends heavily on execution and integration across the value chain.”
The most common failure point: Alignment arrives too late
If there is a single recurring theme in Spets’ analysis, it is timing.
“Early stakeholder involvement is essential,” 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.
That late alignment often undermines the very efficiencies modular is meant to create.
What North America can learn from global leaders
Spets points to several markets that have pushed modular adoption further: Singapore, Japan, China, the Nordics, and Germany.
“We see strong adoption in multistory residential and single-family housing, especially using element-based approaches,” he says. Hotels and public buildings such as schools, kindergartens, and healthcare facilities also stand out.
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.
A better question for World of Modular attendees
Asked what a first-time World of Modular attendee should ask exhibitors, Spets offers a question that quickly separates marketing from substance:
“What is unique about your modular building system, and where can you demonstrate proven benefits compared to in-situ construction?”
He also encourages owners and developers to ask how they can actively work with suppliers to unlock modular’s full benefits.
A framework for scaling successfully
Spets says his World of Modular session will bring “facts and figures from analyzing over 700 companies in modular construction globally.”
While there is no single recipe for success, he points to three recurring characteristics among companies that scale profitably:
- A defined building system with standardized components and limited bespoke change
- Tight integration across design, manufacturing, and assembly
- Disciplined scaling, where demand is stable and capacity matches near-term needs
“Companies that scale profitably invest in their building systems and keep refining them for a specific market of sufficient size,” Spets says. They maintain value-chain control through integration or strong partnerships and avoid expanding faster than they can reliably deliver quality and value.
His goal for the session is straightforward. “I hope to provide both knowledge and inspiration,” he says, reinforcing his belief that with careful planning and a stable supply chain, modular can deliver real benefits to stakeholders and end users.
You can hear more from Erlend Spets at the 2026 World of Modular conference and tradeshow, April 20–23, 2026, at the Bellagio Hotel & Casino in Las Vegas, Nevada.
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