Innovation in Construction A Project Life Cycle Approach

SCRI Research Report4Innovation in constructionA Project Life Cycle ApproachExecutive summaryThe construction industry has long been criticised for its conservatism and lack of innovation. But is this characterisationfair? Much of the innovation in the sector occurs at the project level and tends to be process and organization based.According to official statistics construction companies invest comparatively little in formal R&D, but rather adopt newtechnology and develop new ideas to improve their operations. Such innovations are difficult to capture with standardindicators which tend to be more suitable for technology intensive sectors. Consequently, more research is required to developappropriate metrics for the different types of innovative activities that are carried out throughout the lifecycle of construction projects.This report investigates the ways that construction innovation occurs and tries to address the difficulties in measuring this. Firstly, itintroduces the basic concepts related to innovation and emphasizes the importance of systemic innovation metrics that reflect thebreadth of the sector. It provides a list of indicators currently used to measure construction innovation based on a literature reviewand discusses the adequacy of these metrics. Then, it proposes a framework that analyses the innovation value chain (IVC) throughthe investigation of components of the innovation process including the drivers, inputs, enablers, barriers, tools, and outcomes.The IVC view considers three stages of innovation: idea generation, conversion, and diffusion. A questionnaire was designed basedon this framework and a survey was administered to investigate the innovative activities of construction companies. The findingsof the survey suggest that the contractors largely innovate to improve their processes and services; their innovations are mainlyorganization-based and incremental and driven by their clients. Although they are successful at generating ideas, they struggle todiffuse these ideas and convert them into products and services at the same level.The project level has been largely ignored in analysis so far; however it is the key to improving innovation performance. Thereport extends the IVC analysis at the project level, by adopting a multi-stakeholder approach, through the production of four casestudies. These case studies have been selected among award winning projects at the North West Regional Construction Awards2009. Interviews have been conducted with the key actors to track the collaborative ways in which the successful innovations havebeen generated and to investigate the consequent benefits of innovation at the project and company level. The reported cases areall examples of collaborative partnership among project teams and demonstrate a number of technical and organisational innovationsand good practices. These are grouped under four categories namely, strategic partnership, Modern Methods of Construction,lean construction, and community engagement. The innovative practices not only led to a number of project level benefits suchas reduction in duration and cost, improved quality and environmental performance but also wider benefits such as enhancedcorporate image, knowledge transfer to inform future decisions, client and end-user satisfaction, and improved quality of life.The findings of this survey are expected to illuminate further studies that will investigate the dynamics between project and firm levelinnovation that will help understand the role of different actors in facilitating innovation throughout the lifecycle of a constructionproject. The key lessons from this report are as follows:ivn To present a fuller picture of construction innovation, a wider built environment perspective should be adopted.n Much R&D activity is taking place that is not registered officially. More should be done to raise awareness of the R&D Tax Creditscheme to construction companies.n A representative range of measures for construction innovation needs to be created. In this regard, the Innovation Value Chainapproach to the measurement of innovation provides a flexible and simple system that can usefully be adopted alongsidemeasures that consider the economic, social and environmental impacts of innovation.n More research is required to better understand the complex relationship between regulation, innovation and business need toinform future policies.n The benefits of innovation can only be realised by fully understanding the components of the whole innovation process that isbased on knowledge acquisition, transformation, and diffusion. Our understanding of innovation and how it occurs in the sectorcan be enriched further by detailed work that brings together different theoretical perspectives on innovation that will enable thedevelopment of context sensitive ways of recognising and measuring innovation.