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The purpose of this study is to investigate the challenges and potential improvement mechanisms for the development of technology and innovation in the Ethiopian construction industry.

In this study both quantitative and qualitative research approaches were adopted. While a structured questionnaire was used for the quantitative data collection, semi-structured interview was used for qualitative data collection. In analyzing the quantitative data, mean score was used to rank the variables and factor analysis was conducted to identify the underlying dimensions of the research constructs. The qualitative data was analyzed thematically focusing on specific objectives of the study; the challenges and improvement mechanisms of technology and innovation development.

The findings indicate that the major challenges are nature of the industry and lack of awareness, weak capacity of companies and the regulatory instruments, inadequate tender duration and poor monitoring and controlling practice. The suggested improvement mechanisms are effective coordination of the process and awareness creation, promoting technology and innovation in the procurement process and technology and innovation consideration in construction project registration.

Effectiveness of construction industry improvement programmes is affected by inappropriateness of the adopted implementation mechanisms. Understanding the operating environment; the enablers and potential barriers, is important for the success of any envisioned improvement programme. The improvement framework proposed by this study indicates the potential intervention areas and improvement mechanisms to effectively induce and enhance technology and innovation development in the construction industry. Major pillars of the improvement framework are improving regulatory framework, raising awareness and stakeholder engagement and continual monitoring and controlling of the practice.