Why start up firms are critical to research and development in construction

Why start-up firms are critical to R&D in construction New Civil Engineer | May 16, 2023

On the Code Story podcast, René Morkos discusses his journey as a founder, his experiences in construction, and more.

As published on New Civil Engineer

Technology can help. But companies do not want to waste their cash on the wrong solution and the appetite for investing the time and resources needed to build their own is waning.

It’s an interesting dynamic. On the one hand, the argument has been won when it comes to investing in new technology solutions to improve the construction process. Post-Covid, the acceleration in digitatisation has been huge and parts of ConTech are maturing.

On the other hand, the range of tools available can make it hard to know which direction to go in next. Many organisations have already targeted and addressed the easy wins, both in terms of implementation and achieving a fast return on investment.

We have seen lots of new technology providers enter the market to try and tackle the next piece of the puzzle, with many backed by large investment groups. The sums involved are huge – over US$5bn was invested in construction software providers in 2022. Most went to US-based companies, although the UK did well too.

Let someone else do the heavy lifting

It has resulted in a shift. Companies have a much better understanding of what they want from a technology perspective. They just need someone to deliver it.


These needs are usually linked to productivity improvements – essentially doing the same thing but better. That’s why you see so many solutions focused on things like workforce and supplier management, project management and design.

But, when it comes to companies like Alice Technologies with such a unique proposition, the reason for the purchase is very different. We’re engaged because we are doing something distinct. Through use of artificial intelligence, we are helping major contractors make significant improvements to the way that they schedule and deliver projects.

To develop a solution like this, these companies would need to make a significant investment into research and development (R&D), something that they would not have the time or inclination to do.

By working with us, we eliminate the need for them to plough money into R&D. We have done the development and testing required to deliver something fit for purpose that works straight out of the box, at no risk to them.

It’s a model familiar to the biotech industries. Small companies develop new drugs all the time. Once they have gone through the testing process, ironed out the issues and gone to the licensing stage, they are often purchased by the big pharma companies. Watch the large construction software companies and they tend to follow a similar pattern. And, while the costs are higher, the bigger companies are happy to pay this price because they avoid the challenges associated with developing an early-stage tech solution.


The challenge of change

Some of the problems in construction have been there for a long time, making change difficult. A fresh perspective from a technology-first business offers new ways and processes that can accelerate long-lasting change.

Technology companies that get this right will have a big market that they can pitch to. But a word of caution here, as there are two types of providers operating in the industry.

The first are those that have built a solution to a generic problem, for example a payroll platform, and are then systematically taking the solution to different verticals with some minor cosmetic changes to fit each market.

The second is one that has built a tailored solution for the industry in question. As someone who worked in construction before developing my own technology solution, I would emphasise the importance of the latter.

In this sector, some problems and inefficiencies are so entrenched that this understanding is essential, as is the experience of how the construction ecosystem looks, fits together and behaves.

So when making that next purchasing decision for a new piece of software, make sure that you find the one that has been designed to solve your specific problem and will improve your business quickly and effectively.

See ALICE in action.

Take a custom tour of ALICE and learn why the world's top GCs 
are using it to optimize their most strategic projects

Book a Demo