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To enhance competition in the construction industry, EU policies have created and harmonised functional building codes. Moreover, many actors advocate the construction industry moves towards a lean production, process-based way of working for quality and cost reasons. Here, TimberFramed Engineering approaches are considered to have a competitive and environmental advantage. There is however underlying concerns that conservatism in the construction industry, and lack of timber engineering skills, may be obstacles to change. This paper therefore assesses whether EU construction policy innovation contributed to innovation at the firm level.Timber framed innovators in six European countries were identified, and their sources of innovation assessed.

Innovation is an important source of growth for many companies. It is also challenging, as it may require that the companies build a new position in the supply chain. The literature is devoid of analysis of different ways to build such positions in the construction industry. The purpose here is to explore the challenges involved in implementing innovations that require companies to establish new positions in a construction supply chain. Three in‐depth case studies in the Swedish timber housing industry illustrate different challenges that arise with the different modes of repositioning of organic growth, collaboration and acquisition, and with moving either backward or forward in the supply chain. Organic growth is a slow process that prevents companies from taking a first‐mover advantage. Acquisitions can involve difficulties with exploiting acquired competences. Collaboration brings the risks of diversity of interests and transient solutions. Furthermore, and as shown in the cases studied, challenges are associated with pre‐existing competencies and relationships, with technology‐oriented companies facing customer‐related difficulties and market‐oriented companies mainly facing ones involving technological solutions. The construction industry’s idiosyncrasies amplify these challenges, as its fragmentation makes it difficult to connect with external companies at new positions. Stronger ties with business partners are likely to enable construction companies to exploit more easily innovations that require repositioning in the supply chain.Innovation, supply chain management, case study, Sweden,

This is an electronic version of an article published in:Staffan Brege, Tomas Nord, Roland Sjöström and Lars Stehn, Value-added strategies and forward integration in the Swedish sawmill industry: positioning and profitability in the highvolume segment, 2010, SCANDINAVIAN JOURNAL OF FOREST RESEARCH, (25) primary sawmill production and forward integration into secondary production. It also aims to relate some basic conditions, such as company size, company growth and corporate strategy, to value added and forward integration to profitability. The results show strong positive and significant correlations between forward integration, value added in primary production (somewhat weaker) and unit revenue, and profitability measured as return on investment.There were no strong or significant correlations between size and profitability, playing down the importance of economies of scale (among these already large companies). An interesting result is the much higher profitability of the buying sawmill companies compared to the forest corporations, stressing the importance of both a long-term strategy when investing in value added activities and ultimately the priorities of ownership.

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