Identifying the determinants of construction innovation

Abstract

This exploratory paper examines the drivers and obstacles to construction innovation. It is based on a large-scale survey of nearly 400 businesses in the Australian construction industry conducted in 2004, and twelve in-depth case studies of innovation on Australian construction projects between 2002 and 2005.

The paper argues that construction businesses can effectively improve their on-going competitive advantage through a more strategic approach to increasing innovation levels. It undertakes an analysis of innovation concepts aimed at making such ideas more accessible to construction industry stakeholders. It then draws on the survey and case study results to analyse the drivers of innovation success, together with the challenges often encountered. It concludes with recommendations for businesses to improve their innovation performance, focussing on the value of relationship-building exercises, particularly with clients, related businesses and employees.

Three priorities for business planning are suggested. Firstly, relationships are required with leading-edge clients in order for a business to be exposed to the pressure to perform beyond business-as-usual. Secondly, relationships are required with related businesses to successfully engineer joint approaches to innovation as a means of managing the risks involved. Finally, positive relationships with employees are needed to maximise the impact of training programs aimed at enhancing managerial and social skills to address non-technical obstacles to innovation.

For policy makers, the results draw attention to the need to improve the profitability levels of construction businesses, by providing an environment that is more conducive to innovation. Finally, the paper draws attention to the need for further research into construction innovation drivers and obstacles.