Competition versus interaction as a way to promote innovation in the construction industry

Abstract

Purpose – The purpose of this paper is to discuss the link between economic thinking and public policy, two ways of promoting innovation are reviewed – competition and interaction. The competition perspective is illustrated by Schumpeterian-inspired growth economics, while the role of inter-organisational interaction is shown by the industrial network theory. Design/methodology/approach – The construction sector is used as an example of a politically critiqued industry regarding low innovativeness and productivity, through which the two different views are outlined and compared. The main differences of these two perspectives are outlined as: the organisational unit of analysis (the firm vs the relationship and network), how knowledge is created and spread (exogenous vs endogenous to economic exchange), and the value-creation processes (internal vs external focus). Findings – The two views are essential different and therefore should cancel each other out if implemented simultaneously. Consequently, a conscious choice as to which view should be used within a public policy for promoting innovation must be made. It is concluded that, while both types of economic thinking can be used to promote innovation in this industry, a fundamental difference could arise if construction firms continue to pursue mainly competitive strategies at the expense of addressing its interactional problems. Practical implications – Finally, a set of questions that policymakers need to consider in relation to the three fundamental issues addressed above is discussed. Originality/value – The paper adds to the discussion of how to increase the innovativeness in the construction industry in a novel way by comparing two distinctly different theoretical perspectives on how this is best handled.

Ambidextrous Leadership and Sustainability-Based Project Performance: The Role of Project Culture

“…To meet the requirements of technological, organizational and sustainable development, construction companies or project-based organizations should seek new operational and managerial approaches to achieve a more efficient production or construction process [2,3]. The project is considered as a creative environment, where different parties with various skills and knowledge are addressing specific problems within limited time frame and resources [4].…”

Client’s role in promoting BIM implementation and innovation in construction

“…This has been the case in the construction industry, where public policy is often targeted to promote innovation in the industry (Bygballe andIngemansson 2011, Kuitert et al 2019). Public policies can be viewed as tools that reflect economical thinking (Havenvid 2015). Thus, innovation promoting policies can be based on different theoretical underpinnings of what drives innovation, as shown in a literature review of Havenvid (2015).…”

“…In particular, little attention has so far been paid to how BIM policies are affected and intertwined with general ideas of how public clients should promote innovation in the transport infrastructure sector. A literature review by Havenvid (2015) found how the two perspectives of how clients should drive innovation tend to cancel each other out, arguing for further empirical study of how to prioritise between a focus on competition or client involvement as a basis for policy development.…”

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“…As an example, public policy research from Spain suggested the construction industry is perceived as non-innovative, with market mechanisms being blamed for industries' failure to achieve better efficiency (Ingemansson, 2015). Moreover, international empirical research highlighted several reasons why construction companies encounter challenges implementing innovation to enhance productivity.…”