Startup engagement and innovation strategies in mid- to large-sized US construction firms

The construction industry's accelerating digital transformation signals a need to shift the corporate mindset toward effectively leveraging existing technological tools. However, this transition involves a learning curve and requires knowledge spillover to become embedded and evolve into a lasting part of a firm's culture. Accordingly, it is crucial to establish innovation networks through engagement with technology startups. This study explored how construction companies engage with startups to adopt technology and enhance innovation. Our findings indicate that construction firms often engage with technology startups through buyer-supplier relationships and strategic partnerships, particularly via premarket product testing. In addition to these approaches, we also observed practices of open innovation and in-house innovation efforts. The top three challenges of such engagement were identified as (1) difficulty in finding suitable startups, (2) startups' lack of knowledge about the company or sector, and (3) the fragmented nature of the construction industry. Conversely, the three most cited benefits were (1) personalized attention, (2) encouraging a rethinking of the status quo, and (3) flexible product or service features. Moreover, although most construction firms lack a strategic plan and clear goals for startup engagement, they reported several evaluation metrics to assess effectiveness. Some metrics included solving existing problems, improving team collaboration, enhancing customer experience, achieving a break-even point, achieving time and cost savings, and increasing project capacity.