From relational to technological trust: How do the Internet of Things and Blockchain technology fit in?

Abstract

The construction industry is complex, fragmented and struggles to cope with an intricate and geographically diverse Supply Chain (SC) where sophisticated flows of materials, information and capital take place in a dynamic environment. In this context, building trust among partners is a necessary requirement to deliver a successful project on time and on budget. This paper investigates the main factors that build inter-firm trust in large construction projects and explores the disruptive effect that the Internet of Things (IoT) and Blockchain (BC) could have in this process. The findings are based on an in-depth analysis of the literature and ten one-to-one telephone and face-toface interviews. The findings contribute to the literature by suggesting that a Blockchain-enabled IoT ecosystem has the potential to generate inter-firm trust at the front-end, during contract development, and throughout the construction phase. Moreover, the data denotes the need for further technological adoption in the construction industry as a means of smoothing the transition from relational trust to technological trust.

Applications of distributed ledger technology (DLT) and Blockchain-enabled smart contracts in construction

“…Fitriawijaya et al [43] and Zheng et al [44] discuss the ability of blockchain to facilitate historical record keeping of BIM data to provide provenance and to offer data integrity. Information asymmetry is minimised [28,39] by adding a layer of security to IoT and fostering inter-firm trust [45] or when using IoT data to automatically update the ledger via smart contracts [3]. The integration of BIM, IoT and DLT ensures security of information [39] and avoids data loss especially when transferring assets between owners [46].…”

Shifting trust in construction supply chains through blockchain technology

“…Answering the main research question, it can be said that regarding the dimension of the trust sources, blockchain mainly enhances trust by affecting the cognition-based trust and the system-based trust and essentially replaces relation-based trust dimension by Wong et al (2008) classification. This aligns with the transformation of trust from relational to technological in SCM (De la Pena and Papadonikolaki, 2019). Simultaneously, for construction SCM, the function of contracting is expected to reduce the cost of contract signing or bidding and solve the capital flow issues in projects.…”

Reducing information asymmetry and building trust in projects using blockchain technology

“…In fact, this technology offers a method for avoiding information asymmetries while promoting trustful relationships between project participants. The methodology also has the potential to develop inter-firm trust at the front-end, during contract negotiations, and in the construction phase [33].…”