A History of Failed Dreams: Modern Methods of Construction and Katerra

Image courtesy of Chapman Taylor
Image courtesy of Chapman Taylor

Why has the industrialised production of buildings failed?

Construction historian Andrew Rabeneck provides a historical overview for modern methods of construction (MMC) and explains why it has not succeeded. The recent demise of US company Katerra is considered in a wider context of factory-based offsite construction methods.  Is there sufficient aggregation of demand, assurance of funding appropriate regulatory environment or labour acceptance to provide a sound basis for this dream?  Understanding why construction is the way it is now helps to reveal the basic mechanics of meeting the needs of a very diverse market.

A long-held dream

Modern Methods of Construction (MMC) is just the latest label for an impulse that captured the imagination of architects (and now others) for more than a hundred years, at least since 1910 when Walter Gropius (1910) penned his memo to industrialist Walter Rathenau of AEG proposing factories to mass-produce standardised co-ordinated parts that could be assembled on site in many ways. Each of the heroes of European architectural modernism made a similar plea. Le Corbusier with his proposed Dom-ino House of 1914, later developed in his Vers Une Architecture (1924), declared that architecture’s potential for the redemption of society lay in the new techniques of mass-production as much as through the design of buildings themselves. In 1924 Mies van der Rohe stated: ‘the industrialization of building constitutes the core problem of our time. If we are successful in carrying out this industrialisation, then the social, economic, technical and even artistic questions will solve themselves’ (Neumeyer, 1991: 248).

Historically, of course, identification with modern industry was valuable for modernist architects and their supporters in many ways: it positioned architects as useful and progressive contributors to social initiatives; it promised to bypass the messy reality of conventional construction and it underpinned a rhetoric of backwardness in the existing industry that is still politically potent.  More recently, in response to government urging for modernisation of construction, the mantle for promulgating MMC has increasingly passed from architects to contractors and project managers. The promise of government backing for MMC initiatives has given rise to much MMC-based marketing effort. Laing O’Rourke in Britain are an example.  But enthusiasm for ‘disruptive technology’ that will ‘move fast and break things’ in the manner of a Silicon Valley start-up is not supported by essential governmental aggregation of demand and capital funding, so these initiatives tend to fizzle out.

A massive transformation of construction from a local empirical art to a globalised industry has indeed taken place in the last 150 years. Construction has come to be recognised as a modern industry, both intellectually and politically (Rabeneck, 2011). The value of industrial products (PMV - pre-manufactured value) in buildings is now over 60% and rising (Sebestyen, 1998). But this sort of industrialisation, of materials, products, tools and methods, is not what architects, contractors and politicians dream of. Instead, the century-old architectural figuration of industrialization continues to imagine factory-built houses, patent systems of construction, mass-produced interchangeable parts, robot builders and wonder materials. It is a vision sustained by culturally influential architectural thought, ensuring that society sees the world of building and construction through these spectacles.

Heroic architects invent novel ways of building using industrial production. They then struggle to gain acceptance of their ideas and to win over reluctant or unimaginative industrialists or political authorities. When their systems fail (as they mostly do), it is because of the failings of others, for example failure to assure a market, failure to commit capital, failure of users to like the product. The architect survives as a thwarted hero with a magic key that can unlock the factory, making houses that can be produced and marketed like consumer goods at prices reflecting the economies of mass-production.

Such stories are propped up by the powerful notion that normal construction is somehow backward compared with manufacturing industry (Woodhuysen and Abley, 2006). Few historians have attempted an objective analysis of the backwardness rhetoric. Only Linda Clarke (1985), a construction labour specialist, asks whether some defining attributes of construction (e.g. land as a condition of production or the social division of production into design and production) might mark construction as peculiar with respect to the dominant manners of production. She concludes that construction must be a parallel but different form of labour process because of such defining attributes and thus backwardness is not properly relevant. Nonetheless, most authors remain in some way shackled to the notion of construction-as-industry, and construction industry or building industry have entered the language as idioms, certainly since the inter-war years. Thinking about construction is generally trapped within the industry paradigm. Even the economist Michael Ball, who efficiently debunks conventional explanations of ‘backwardness’ as being basically mere points of difference with modern factory processes, situates construction as a discrete industry within the economy (Ball, 1988). He pinpoints relations in construction between production and exchange that lead building firms to act as merchant-producers, using capital to convert resources - land, plant, materials, labour – into profit. Projects are bought in the marketplace of resources, and then sold to clients or owners, subordinating production methods to the requirements of that marketplace. In other words, construction is an industry, but with distinctive characteristics unlike most other industries.

Blame for failure of MMC systems feeds off the backwardness rhetoric surrounding construction generally. It has given rise to a rich literature of industry improvement, often sponsored directly by government, that offers recipes for modernisation most of which embody a vein of MMC, and much borrowing from business theory. The movement has been well documented by Adamson and Pollington (2006), but balance to its boosterism has been provided by Macmillan (2004), Pearce (2003), and Green (2011).


The recent $2 billion bankruptcy of Katerra is just the latest in a long history of enterprises misjudging the nature of construction in some fundamental way. Katerra was originally established in 2015 to develop economies of scale through bulk purchasing arrangements for building products and components, to be sold on to contractors and developers. It addressed what its founders thought were primitive procurement methods in conventional construction. But developers’ architects wanted to specify products they knew, shunning the Katerra alternatives. So Katerra then moved into vertically integrated construction, using Katerra products in Katerra designed and built projects. They acquired architectural and engineering practices and contractors to implement this strategy, fuelled by massive injections of capital, raised by pitching MMC to gullible banks with the promise of using electronics industry procurement methods to radically change the construction industry, reap significant profit and capture market share. Katerra’s founders made the same mistake that most in the ‘construction improvement’ field do. They failed to properly understand why construction is the way it is now, the basic mechanics of meeting the needs of a very diverse market.

Katerra’s founders came from the electronics industry, where they had made fortunes by acquisition and streamlining supply chains. They were caught up in a recent American vogue for architect-led prefabrication, emphasising sophisticated high design, the exclusion of traditional builders and a consumerist attitude to housing (Kieran & Timberlake, 2004). It is a movement fuelled (until recently) by easy credit and prefabricated house designs that promise to bypass the mess, expense and uncertainty of dealing with the construction industry (Rabeneck, 2009). They thought they could repeat their success for the $10 trillion construction industry. But as a former employee explained: 'There was a misconception that the entire industry is broken. That’s not the case. There are portions that need repair, but there is a lot that works well. Katerra launched into reinventing the entire industry' (Davis, 2021).

What have we learned?

The lesson of the last hundred years is that for the kind of industrialisation dreamt of by architects to succeed, a market for the product must be assured, underwritten by government. In Europe after World War Two, the political will to aggregate and guarantee markets existed and that enabled the profitable spread of large panel industrialised concrete systems within command economies; governments frequently controlled over half of their entire construction markets during the trente glorieuses post-war years .

But America’s more open market was never able to provide the required conditions, whether through the aggregation of demand, the assurance of funding, the regulatory environment, or indeed the labour acceptance of MMC. America thus became the scene of many failures of architect-led industrialised building initiatives. Recent histories have begun to explain why such schemes have failed or remained insignificant with respect to construction practice. The first to understand this crucial point was Barry Russell (1981). Then came George Herbert’s (1984) account of Gropius’s ill-fated American experiment and Douglas Knerr (2004) on the failure of Lustron. The failure of the US government’s ‘Operation Breakthrough’ was explained by Bender and Wilson (1973). The most elegant recent analysis comes from Colin Davies (2005), in which he articulates oppositions between the worlds of architecture and production and the muddling of productive and aesthetic aims that has characterised Modern Architecture’s engagement with industrial production for the last hundred years. Davies is picking up on Alison Ravetz’s brilliant critique of welfare state planning and industrial policy. Ravetz (1980: 165) pointed to a 'deep division in society in which technical and industrial processes and their workers are socially divided from policy makers, academics and professionals'.

The gulf between the worlds of architecture and production is sustained both by negative attitudes towards conventional construction and by a lack of interest among architects in the boring things that might make prefabrication succeed: capital markets; investment theory; the control of demand; market aggregation; supply-chain integration; production engineering; marketing. The gulf is recognised, too, by Barry Bergdoll who was the curator of the Museum of Modern Art’s (MOMA) 2008 Home Delivery exhibition:

In leading architectural schools there is an equivalent huge cultural divide between those who are creatively engaging with exploring new relations between architecture and production and the steady, almost reflexive, success of manufactured housing, which by most accounts captures nearly a third of all  US single-family house starts but is invisible to, and all but impervious to, design culture.  (Bergdoll and Christensen, 2008)

Indeed, successes of industrialised building under normal market conditions have come mostly from the US, and to a lesser extent from Scandinavia and Japan, but they have come exclusively from the field of industry, not architecture. One in four American homes comes from the factory, over 400,000 units a year since the early 1970s, but to learn about that one must rely on industry accounts and US Department of Commerce statistics, or Arthur Bernhardt’s (1980) industry study. 

The challenge for MMC going forward is to finally ditch the Fordist mass-production analogy and to seek technologies that can optimise the use and recycling of globally industrialised construction products and materials. Industry still needs to know what to produce so the role of design remains important. The most significant construction technologies of the last hundred years are possibly ready-mixed concrete, cranes and cordless power tools; but they are not the stuff of the dreams we like to dream. The danger is that the MMC discourse will be dominated by fashionable enthusiasms like ‘innovation’, and that the backwardness rhetoric about construction will inhibit serious study of how construction really works. Global population pressure plus the mobility of capital and its instruments of distribution are already transforming every construction market and the culture of construction: the extraction of raw materials, the manufacture and distribution of building materials, products and systems of construction, the organisation and execution of construction, the management of construction labour and not least the position of architects and engineers (Rabeneck, 2018). These recent transformations are still barely discussed, let alone understood. MMC must confront them if its products are not to become just the latest failed systems.


Adamson, D.M. and Pollington, T. (2006). Change in the Construction Industry: An Account of the UK Construction Indusrry Reform Movement 1993-2003. Abingdon: Routledge.

Ball, Michael. (1988). Rebuilding Construction: Economic Change and the British Construction Industry. Chapter 2. London: Routledge.

Bender, R. and Wilson, F. (1973).  A Crack in the Rear-View Mirror: A View of Industrialized Building. New York: Van Nostrand Reinhold.

Bergdoll, B. and Christensen, P. (2008). Home Delivery: Fabricating the Modern Dwelling. New York: Museum of Modern Art.

Bernhardt,  Arthur D. (1980). Building Tomorrow: The Mobile Manufactured Housing Housing Industry. Cambridge: MIT Press.

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Davies, Colin.  (2005) The Prefabricated Home. London: Reaktion.

Davis, Daniel. (2021, June 18). Katerra’s $2 Billion Legacy.  Architect Magazine. https://www.architectmagazine.com/technology/katerras-2-billion-legacy_o

Green, Stuart D. (2011) Making Sense of Construction Improvement. Chichester: Wiley-Blackwell.

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Kieran, S. & Timberlake, J.  (2004). Refabricating Architecture.  New York: McGraw Hill.

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Pearce, David. (2003). The Social and Economic Value of Construction. London: New Construction Research and Innovation Strategy Panel. 

Rabeneck, Andrew. (2011).  The invention of the building industry in Britain. ArtefaCTOS, 4 (1), 93-121.  https://revistas.usal.es/index.php/artefactos/article/view/8538/11184

Rabeneck, Andrew. (2009).  Review of: Home Delivery: Fabricating the Modern Dwelling by Barry Bergdoll and Peter Christensen. Construction History, 24, 140-142. http://www.jstor.org/stable/41613953

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