As global infrastructure demands accelerate and traditional construction practices face mounting inefficiencies, digital solutions are emerging and reshaping the construction sector. Once viewed as an analogue-heavy industry, construction is now entering an era of intelligent automation, data-driven design, and predictive decision-making.

Innovation is opening new ways of thinking, as the construction sector increasingly collaborates with tech visionaries. Digital tools are now embedded at every stage of the building process, challenging and reimagining conventional approaches.

But there is more. This transformation is not merely about adopting new technologies. It is about reimagining how buildings, infrastructure, and cities are conceived, executed, and maintained. With Artificial Intelligence (AI) at its core, digital applications are helping project owners and contractors anticipate problems before they occur, streamline workflows, and deliver more sustainable, resilient, and profitable outcomes.

Construction’s Growing Role: Challenges and Opportunities in a Digital Era

The construction sector stands at the forefront of efforts to build a more sustainable world. Beyond meeting essential societal and economic demands, including delivering homes, workplaces, healthcare facilities, and transport networks, construction projects are potentially uniquely positioned to drive progress toward global net-zero ambitions. From advancing renewable energy infrastructure to enabling low-carbon construction and enhancing building insulation, the industry plays a vital role in the green transition.

As highlighted by McKinsey & Co., the sector may be poised for significant growth. Global construction expenditure, measured in constant prices, is expected to climb from $13 trillion in 2023 to $22 trillion by 2040. Achieving such a result would require an average annual growth rate of 3.2%.      
Over the past two decades, the only country that has achieved such rapid growth was China. However, analysts point out that growth outside China would need to accelerate sharply, doubling from a 1.3% to a 2.7% annual rate, to meet these global targets.

In the early 2020s, also in response to the global crisis that started at the beginning of the decade, numerous public-funding initiatives have boosted the demand for long-term infrastructures, whose needs remain robust.

In the United States, the 2021 Bipartisan Infrastructure Law (worth $1.2 trillion) was enacted with the ambition to repairing and modernizing the nation’s infrastructure. This bill aims to revitalize aging infrastructure across the U.S. while promoting job creation and climate resilience. In particular, it allocates $550 billion in new federal funding over five years, supplementing existing programs to upgrade bridges, transit systems, water networks, and more.

In the European Union, the € 800 billion NextGenerationEU recovery plan aimed at transforming the EU into a more resilient, innovative, digital and sustainable economy. By investing in green and digital technologies, the plan aims to modernize both European cities and industries: improving energy efficiency in heating and lighting, optimizing water use, upgrading waste management, and supporting cleaner, more sustainable industrial processes.

Additionally, many private asset owners are committing substantial resources to decarbonize their assets and enhance climate resilience across their portfolios. According to the OECD, investing in climate-resilient infrastructure makes strong economic sense. Such investments not only extend the operational life of infrastructure but also help safeguard returns and support uninterrupted business activity. Over time, these measures tend to generate positive net benefits, proving their long-term value.

On the supply side, McKinsey & Co. underlines that the industry faces a growing labour shortfall. It has been observed, that, as experienced professionals retire or leave for other sectors, the talent pipeline failing to keep pace. In the U.S., job vacancies in the Architecture, Engineering and Construction (AEC) field have surged to 440,000 (up from roughly 300,000 in 2019). Similarly, the U.K. has seen its vacancy rate nearly double over the same period.

In response, firms are increasingly adopting digital technologies to enhance productivity and help bridge the growing gap between construction capacity and market demand. Today, technology stands out as the most powerful lever for transformation: more so than ever before.

In its analysis, McKinsey & Co. specifies that the construction sector has historically been slow to embrace new technologies, particularly in terms of tools that directly boost productivity. For decades, investment in IT remained minimal, with construction firms typically allocating less than 1% of their revenues to digital infrastructure, a stark contrast to the significantly higher spending seen in tech-intensive industries like automotive or aerospace.

Only in recent years the landscape has begun to shift. Between 2020 and 2022, interest in digital innovation within the architecture, engineering, and construction ecosystem grew substantially. McKinsey & Co. reports that global venture capital and private equity investments in AEC technologies surged to $50 billion during that period, with an 85% increase over the previous three years.

McKinsey notes that despite significant investment in construction technology, productivity improvements have been limited because most widely adopted tools, such as digital document management systems and Building Information Modeling (BIM), primarily enhance oversight, safety, and design quality rather than fundamentally transforming on-site labour processes.

BIM refers to the management of information throughout the lifecycle of a built asset, from initial design to construction, maintenance, and eventual decommissioning, using digital modelling. It involves collaboration among engineers, owners, architects, and contractors within a three-dimensional virtual environment (a common data environment), enabling teams to coordinate and communicate in ways previously not possible. However, while BIM and similar technologies advance planning and coordination, they have not yet changed the daily workflows of most workers on the ground.

In contrast, promising innovations like modular construction and digital procurement could boost efficiency, but their adoption remains slow due to scaling challenges, limited infrastructure, and lack of operational experience. These barriers have slowed their widespread implementation and prevented the construction sector from realizing the full productivity benefits that technology could offer.

Emerging Con-Tech Start-Ups: Catalysts of Innovation and Sustainability in Construction

Construction technology (ConTech) is becoming a cornerstone of innovation and sustainability across the industry. The U.S. leads in this field, with 97 start-ups securing 42.5% of total global investment in the sector.

Technologies such as AI, the Internet of Things (IoT), robotics, 3D and 4D printing, drones, and extended reality are making smarter, more sustainable practices a reality across the entire building lifecycle. These tools help reduce environmental impact by enabling precision, efficiency, and transparency, intervening all through the value chain, from early-stage planning and design to energy performance verification in completed structures. Innovations like smart building sensors, energy-efficient materials, and additive manufacturing techniques are already playing a vital role in lowering emissions and waste.

Within this broader digital transformation, a new generation of construction technology start-ups is emerging as a powerful force. As highlighted in a recent analysis by Accuracy, these start-ups are deploying cutting-edge technologies to reimagine traditional construction workflows and accelerate the industry’s transition to a more sustainable and efficient future.

Five prominent types of con-tech innovators stand out.

First, design configurators use generative design algorithms to rapidly produce multiple architectural and engineering options tailored to specific project requirements, enabling optimized and creative solutions.

Second, AI is increasingly embedded across construction activities, from computer vision systems that monitor progress on-site to big data analytics that improve planning and decision-making. Predictive AI, in particular, plays a growing role in enhancing safety and efficiency: it enables early identification of on-site risks and supporting preventive maintenance by analysing sensor data to anticipate equipment failures before they occur. Additionally, AI optimizes the allocation of human and material resources by considering real-time factors such as weather, deadlines, and logistics to improve overall project efficiency.

Third, drones and unmanned aerial vehicles (UAVs) offer precise volumetric scans, automate safety and quality inspections, and streamline data collection, significantly enhancing site management.

Fourth, virtual and augmented reality (VR/AR) technologies, while still emerging, improve project visualization, detect design clashes early, and foster better collaboration through immersive experiences. Beyond design, VR also offers immersive training simulations that prepare workers for complex or hazardous tasks in a safe environment, significantly reducing onsite accidents. Meanwhile, AR enables remote technical assistance by overlaying real-time guidance and instructions directly on-site, speeding up problem resolution and minimizing travel.

Finally, automation and robotics are steadily transforming construction through industrialized processes and on-site robotics, increasing productivity, accuracy, and safety.

Some examples of con-tech startups driving innovation include:

• Spacemaker AI, an Oslo-based construction tech startup, acquired by the American Autodesk, which uses generative design to help architects, urban designers and real estate create optimized urban development plans, considering design criteria and data like terrain, maps, wind, lighting, traffic and zoning among others.
• Buildots, an Israeli start-up, uses computer vision to monitor construction progress and detect deviations in real time. By combining advanced AI with seamless integration, it provides predictive insights that help eliminate errors, avoid delays, and bring greater clarity and confidence to all project stakeholders.
• The American DroneDeploy, offering aerial site mapping and volumetric data capture, enabling rapid site analysis and progress tracking, and HoloBuilder, which provides 360-degree site documentation and immersive progress visualization for remote collaboration.
• Monumental, a Dutch start-up based in Amsterdam, develops autonomous, AI-powered robots that automate bricklaying on construction sites. Their technology helps tackle labour shortages and improve efficiency in building processes.

Importantly, many of these start-ups place sustainability at the core of their innovation, employing real-time data monitoring, advancements in concrete technology, and CO₂ capture techniques to promote greener building practices.

This dynamic start-up ecosystem is a vital catalyst for modernizing construction, bringing fresh thinking and technological agility to an industry ripe for transformation.

For further reading, you may consult these sources:

• From start-up to scale-up: Accelerating growth in construction technology, by McKinsey & Co.
• Delivering on construction productivity is no longer optional, by McKinsey & Co.
• A Systematic Review of the Digital Transformation of the Building Construction Industry, in ResearchGate
• The 50 most promising startups of 2025 that are redefining the Contech ecosystem, by Cemex Ventures
• AI in automated sustainable construction engineering management, in ScienceDirect
• Role Of Construction In Advancing Sustainability, by ForConstructionPros
• Construction in the digital age – An overview, by Accuracy
• Pourquoi les entreprises du BTP doivent-elles adopter une stratégie de développement digitale ?, by Axecibles