energizing innovation in integrated project delivery final report - SPUR

• New technologies can cause a firm to fail if they stifle the firm’s ability to maintain a
sustainable short-term income.
Industry level barriers:
• Innovation within an industry sector but not across sectors
• Government regulations
• Competitive bidding provides little margin for a contractor to implement new
techniques or upgrade quality in its product.
• The market itself is a barrier because it is extensive, unstable, fragmented and
geographically dispersed. This creates an uncertain environment for innovation,
thereby increasing risk dramatically.
• Construction firms rarely have the capital to invest in risky innovations.
• Construction is closely regulated by building codes which are nationally, state-wide,
and locally enforced.
• Transient nature of construction makes innovation requirements and benefits different
from one location to the next.
• The changing ratio between construction costs and financing costs.
• Incentives for innovation are low.
While barriers to innovation in the construction industry have been identified, previous research
does not provide a ranking or rating of the barriers in terms of their magnitude and/or frequency
of exposure. The frequency with which barriers are noted in literature may give an indication of
it’s magnitude. For example, fear of change, the competitive bidding process, selected project
delivery method, and industry codes and regulations are often cited in the literature as barriers. It
could be assumed then that these are the most significant barriers. The results of the present
research as described below provide quantitative evidence as to the magnitude and frequency of
the barriers.
The need for research and development (R&D) to occur and to have R&D capabilities also
presents a barrier to innovation. Firms have a hard time innovating unless they are deeply rooted
in R&D (Dulaimi 1995). While firms in other industries such as the semiconductor and medical
industries are intimately involved in generating and developing new technologies, most
construction firms are not. As a result, 60-80% of new construction technologies developed in
the U.K., for example, fail (Dulaimi 1995). More investment is needed in R&D in the
construction industry.
Failure of a new technology to gain widespread implementation may result because of conflicts
in the development and diffusion of technologies. Christensen (1997) presents four laws of
disruptive technology to an industry, whether it be the construction industry or another work
industry. These four laws are:
1. Companies depend on customers and investors for resources.
2. Small markets do not solve growth needs of large companies.
3. Markets that do not exist cannot be analyzed.
4. Technology supply may not equal market demand.
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