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An explanation for the low innovation activity in construction is put forward. The central argument is that the current theory of construction is one root cause for low innovation activity. Instead, an explicit and more powerful theory of construction is needed for further innovation, which is ‘to manage new ideas into good currency’. There are three main mechanisms in the current theory of construction which are identi ed as causing this hindrance. Firstly, production theories in general, as well as construction theories speci cally, have been implicit. Therefore, it has not been possible to transfer radical managerial innovations, such as lean production, from manufacturing to construction at a theoretical level. Direct application of this production template to construction has been limited due to the different context of construction in comparison with manufacturing. Secondly, the current theoretical model of construction is based …