The construction industry is experiencing a surge of startup activity, but contractors say many emerging technologies still fall short of delivering meaningful results on jobsites.
Long viewed as slow to adopt innovation, construction has lagged behind other industries in productivity growth. A widely cited 2017 McKinsey report found labor productivity in construction grew just 1% annually over two decades, compared to 2.8% for the global economy and 3.6% for manufacturing. A 2024 follow-up showed only modest improvement, with construction productivity rising 10% between 2000 and 2022 — far below gains in other sectors.
Despite those challenges, builders are increasingly turning to technology to improve operations across the project lifecycle, from invoicing and change order management to autonomous equipment and artificial intelligence tools. At the same time, contractors are investing in and partnering with startups to tailor solutions to their specific needs.
However, as technology becomes more common on jobsites, expectations are rising — and the burden is shifting back to startups to prove their value.
Industry leaders say construction technology must offer substantial improvements over existing tools to justify adoption.
“In construction, a solution doesn’t just need to work — it needs to be 10 times better than something that already exists,” said Jim Barrett, chief innovation officer at Turner Construction.
“It’s got to be significantly better to make us want to spend the time to think about either changing out an existing solution or trying to spend the time integrating it into our organization,” Barrett said.
Turner recently adopted change order management software Clearstory across its project teams, citing its ability to streamline complex workflows.
“Clearstory layers onto a high-touch workflow that impacts hundreds, if not thousands, of people on our projects and makes it simpler and faster in a way that raises the bar for outcomes,” said Maria Pantelaros, Turner’s director of innovation.
Still, Barrett noted that integrating new technology requires significant time and resources, limiting how many startups contractors can realistically engage with.
“The effort it takes to bring a new solution into our organization is significant,” Barrett explained.
This challenge is especially evident with artificial intelligence tools. While contractors are exploring partnerships, some question whether outsourcing development is necessary when in-house teams may better understand project needs.
Experts say one of the biggest hurdles for construction startups is achieving true product-market fit.
Aaron McClellan, construction technology manager at Granite Construction, said many tools are designed for vertical building projects and fail to address the needs of infrastructure contractors.
“I think there’s definitely a trend in the tech to be more focused on the vertical construction side,” McClellan said.
In some cases, products are built to satisfy investors rather than end users, leaving contractors to adapt tools that do not align with real-world workflows.
The risks of misunderstanding the industry are not new. The collapse of modular construction firm Katerra highlighted how failing to account for construction’s relationship-driven nature can derail even well-funded ventures.
Contractors also say startups must clearly define the problems they aim to solve before seeking industry buy-in.
“If you’re not sure of the problem you’re solving and who you’re solving it for, then honestly, we’re telling people to come back in six months when you figure that out,” Barrett said.
Henning Roedel, founder of Hardhat Robotics and former robotics lead at DPR Construction, emphasized that startups should focus on tackling complex challenges rather than easy wins.
“My advice to anyone is, if you’re tackling something for construction, tackle a hard problem. The industry will reward you for it,” Roedel said.
Programs like Suffolk Technologies’ BOOST accelerator are helping bridge the gap by giving startups access to jobsites and direct feedback from contractors.
Ultimately, experts say success in construction technology depends on close collaboration with field teams.
“Get out, be with the operations, understand the skepticism, understand the needs, the wants, face to face,” McClellan said. “If you’re not building rapport with the people, you’re making a lot of assumptions. I think that we have to clean up those assumptions, get feedback, and actually start building together.”
Originally reported by Matthew Thibault, Reporter in Construction Dive,
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