The construction industry has often been criticised for its lack of innovation and commitment to R&D. Using a systems approach, this study examined a number of construction innovation system scenarios and policy interventions within the context of four future plausible Russian construction industry transition scenarios. A system dynamics (SD) model was developed to incorporate the main actors of the construction innovation process, namely industry, government and academia. The SD model provided insight into the complexity and inherent dynamics of innovation processes caused by multiple feedback loops, nonlinearity and time delays in decision-making. The SD model also addressed the challenges of transforming Russia’s construction industry into a highly developed sector by providing an understanding of how government policies and supportive programmes could encourage industrialists to innovate, promote research and transfer technology. The transition scenarios were developed by considering the variation of two factors driving innovation in the construction sector, namely: (1) the conditions and level of government financial support; and (2) demand for innovation related to market expectations, largely dictated by traditional versus progressive procurement processes. One key finding was that the Russian construction industry preferences imitation-oriented innovation development.