The key factors associated with construction industry development worldwide are identified by using a grounded theory approach. This first involved the identification of 62 variables from earlier studies. A questionnaire survey was then used to elicit views of the current strength of each variable. The resulting data were factor analysed and a set of eight key factors obtained comprising the following: (1) industry-led better practice and culture; (2) financial resources and investor confidence; (3) human skills and a culture of transparency; (4) government policies and strategies supporting construction business; (5) research and development for construction; (6) a self-reliant construction culture; (7) institutional support; and (8) supportive attitudes from aid agencies. These appear to be relevant to both developed and developing countries.