ABN AMRO Report: Innovation in Construction Needs Scaling for Impact
Amsterdam, Wednesday, 27 August 2025.
ABN AMRO highlights that innovations without scaling risk becoming ineffectual, urging a focus on broad implementation to truly combat climate change in the construction sector.
The Challenge of Scaling Innovations
The recent report by ABN AMRO underlines the crucial gap between innovation and practical implementation within the construction sector. The document posits that while innovations—ranging from advanced technologies to sustainable construction methods—are plentiful, a lack of scale limits their effectiveness in improving productivity or combating climate change. This sentiment echoes Leontien de Waal’s insights, who argues that innovations alone do not guarantee significant productivity improvements without sufficient market volume [1].
Current State of Construction Sector Productivity
The construction sector faces a paradoxical situation wherein labor productivity declined by 2% from 2019 to 2023, despite a flurry of innovative projects and pilot schemes [1]. Similarly, the U.S. construction sector mirrors these challenges, with productivity stagnant since the 1970s despite a broader economic tripling of labor productivity [3]. This persistent stagnation underscores the need for a comprehensive approach that not only fosters innovation but also ensures its widespread adoption.
Call to Action by Industry Leaders
Industry voices, including Leontien de Waal of ABN AMRO, advocate for a shift in focus from isolated innovations to a robust implementation strategy that scales successful innovations. This involves governments, development agencies, and investment funds reallocating resources to support the integration of these innovations into standard practices [1]. Such actions are deemed essential to creating the necessary market conditions that make innovative investments profitable.
Forward Strategies and Recommendations
ABN AMRO’s report aligns with broader calls within the construction industry, where forums such as the Property Council of Australia’s Modern Methods of Construction Forum emphasize the need for modular and prefabricated solutions to address productivity and housing deficits [4]. Aligning these innovations with regulatory reforms could enable more efficient construction processes, thus meeting both climate and economic goals. The synergy between innovation and regulation is vital to bridging the gap between potential and real impact in efforts to modernize the industry [4].