Classification of innovation for strategic decision making in construction businesses

Abstract

Innovations in construction may be classified in several different ways. To encourage construction firms in Singapore to innovate, a practical approach is provided for the classification of innovations, in order to guide construction firms in their development of innovation strategies. A qualitative systems model, portraying the innovation behaviour of contractors, is developed and validated through Pearson correlation analysis and interviews. From interviews with 21 construction practitioners, the profit maximization goals of construction firms are shown to be a major driving force of innovation. Construction innovation should be classified in accordance with the types of benefits and returns that emerge from them, which makes the investment of money and effort in innovation worthwhile. Three classes of innovations were identified: innovations that consumers are willing to pay for; innovations that reduce contractors' construction costs; and innovations that encompass intangible benefits, thus providing contractors with competitive advantage.