Innovate or Perish? Exploring some of the Myths of Construction Innovation

Abstract

The construction innovation literature suggests that managers face a stark choice. They can innovate or perish in the face of growing global competition and an increasingly uncertain and dynamic world. Innovation is presented as a key area of reform needed to raise business performance, yet at the same time it is argued that Australia is falling behind in the global innovation stakes. Evidence suggests that the Australian Construction sector is a poor innovation performer when compared to all-industry averages and contributes relatively little to the national innovation effort. Drawing on international innovation research, this paper argues that these views are overly simplistic and explores some of the myths that surround the process in the construction industry. Through interviews with some of Australia's leading innovators and policy-makers it suggests that many of the factors that are said to drive innovation are not as straight forward as they may seem. There are important qualifications to consider and it would seem that construction innovation is a highly interactive and amorphous process, involving many people with multiple interests dealing with day-to-day challenges.

Determinants of Innovation in European Construction Firms

“…Construction sector is classified as a low-tech sector (European Commission 2012a). However, low-tech and high-tech industries interconnect (as partners, clients, buyers) and both contribute to innovation (Pavitt 1984;Bhattacharya, Bloch 2004;Brochner 2010; Hansen, Winther 2011; Loosemore 2014). The study by Reichstein et al (2008) for the construction sector in the UK indicates several examples of product and process innovation in the construction industry, shown in Table 2.…”

“…A second reason for the underestimation of R&D in this sector is that innovation in construction depends heavily on the progress made by its suppliers of materials and other components and projects (Pavitt 1984;Hall 1994) and the departments of R&D in upstream sectors (e.g. architects or materials innovation departments) (Reichstein et al 2008;Arora et al 2014;Loosemore 2014).…”

Exploring the beliefs of Australian prefabricated house builders

“…It also renders one of prefabrication's most recognised advantages as not realistically advantageous. This may effectively set a baseline firm size required to make prefabricated housing viable in Australia, as has been noted for construction innovation generally (Loosemore, 2014). This is particularly aberrant against the backdrop of the Australian housing industry's dominance of small and medium sized firms.…”

“…This commitment to innovation carries with it significant risk in challenging the inertia of the construction industry, but also potential for huge rewards in becoming an industry leader (Loosemore, 2014). The current paper is based on 14 interviews to examine house builders' experiences adopting prefabrication, with a particular focus on how the current views of the industry have affected their actions.…”

“…Most firm-led innovation activity in the residential construction industry is subsequently minor changes to internal processes (Thorpe, Ryan and Charles, 2009). Regulators and government bodies have the potential to instigate larger changes, through top-down enforcement of standards and/or offering of incentives (Loosemore, 2014). Clune (2012) highlighted the difficulty in imposing top-down changes on construction firms, particularly when long-term policies clash with immediate priorities like housing production costs.…”