Innovation in construction

Simon Murray

Why do so many clever people have so few game changing ideas? Simon Murray thinks big companies and the rise of project managers might be part of the problem.

The UK construction industry has a problem with innovation.  The government has reported that in 2011 contractors invested a mere £37M in innovation1.  There is no shortage of bright people and new technologies in the industry, but neither is there evidence that we are delivering better projects or improving productivity.

"Delivering a single project on time, within budget and to quality has become more important than connecting up all the people working on a series of similar projects to see if they can produce better solutions."

The traditional practices that many clients still use to procure construction work are not conducive to innovation.  But when clients have brought their consultants and contractors into alliances or framework agreements, there has been no sudden flourishing of game changing ideas.  We should ask ourselves whether the root causes of this problem lie much deeper in the structure and culture of the industry.

US academics Wesley Cohen and Daniel Levinthal have argued2 that a firm’s innovative capabilities depend on its ability to recognise valuable new ideas outside the firm, absorb them and convert them into new products and processes.  Defining this as a firm’s absorptive capacity, they highlight the importance of prior knowledge in diverse fields.  As they put it:  “A diverse background provides a more robust basis for learning because it increases the prospect that incoming information will relate to what is already known”.

In his book Where Good Ideas Come From3 Steven Johnson points to connectivity as a key enabler of innovation.  He observes that innovations take many years to mature and result from the collisions between the hunches of people working in related but different fields.  The more connected you are the more likely you are to nurture an innovation.  Or as Johnson says:  “Chance favours the connected mind”.

If the keys to innovation are diverse knowledge and connectivity, where is the construction industry going wrong?  The answer might be found at the core of the industry’s culture and structure and in particular in our reliance on the established professions and on the doctrine of project management. Are these the problems we have to fix if we want to become more innovative?

Professions are essential for maintaining standards of practice and protecting us from charlatans.  The evolution of the construction professions has produced many skilled and motivated people, but it has also developed specialists in narrow fields with limited business relationships beyond their fellow professionals and clients.  They are open to new ideas within their own fields but often fail to spot new ideas outside their fields that connected together could lead to new ways of doing things.  

The recent trend towards the consolidation of construction consultancies into large international firms is exacerbating the problem by creating the impression of diverse knowledge and relationships when the reality is the opposite.  These large consultancies are beginning to look like jars of Smarties.  At a distance they appear to contain all sorts of knowledge but when you get up close you find the contents are all the same shape and size and taste the same.

Project management has its origins in the US aerospace and defence projects of the 1950s and in the tools and techniques used to coordinate the engineering and manufacture of the thousands of components that went into an Atlas missile.  Project management is still focused on the delivery of projects but is now all about breaking projects down into packages to procure low prices and control suppliers rather than about integrating components into completed projects.

The effect of this has been to constrain connectivity by creating a new team for every project and excluding most suppliers from the design and specification of the project.  Delivering a single project on time, within budget and to quality has become more important than connecting up all the people working on a series of similar projects to see if they can produce better solutions.

The time has surely come to ask ourselves whether we want the construction industry to be innovative and competitive or are content with the status quo.  I am not suggesting that the construction industry doesn’t need professional people or project management, but if we are serious about innovation and improving performance we have to find ways of organising our people and processes that maximises our connectivity and makes best use of our diverse knowledge.

Simon Murray is director of the Acumen 7 network.



1.     UK Construction.  An Economic Analysis of the Sector.  Department for Business Innovation and Skills, July 2013.

2.     Absorptive Capacity: A new Perspective on Learning and Innovation.  Wesley Cohen and Daniel Levinthal. Administrative Science Quarterly, March 1990.

3.     Where Good Ideas Come From.  Steven Johnson,  Allen Lane, 2010.



A thought provoking piece. Measuring productivity of the sector as a whole is a good way to promote and provoke innovation. It might encourage us to look at the whole process rather than just the aspect for which we have contractual responsibility.
Simon has clearly and concisely articulated the impact of the inward looking focus of many our businesses and the impact of a lack of real understanding of our clients businesses. This article should be a call to arms to address not just innovation but the real delivery of value to our clients.
I agree in general. In particular I have experienced that this is significantly exacerbated when a client chooses to insert a "Delivery Partner" between themselves and the staff designing the project. This has been the case on many recent major projects, past, present and just commencing.
Good article. Part of the problem is that construction companies want to do things quickly and in a tried and trusted way as this is generally what their clients want, no matter what it says in a tender. There are very few people who want to test ideas, pay for the testing or take any risk. In part I think this is due to cost and time constraints, in part due to litigation risk, and in part due to professions jealously guarding their expertise.
Change approach to IP. Anyone employee developing a new technology should share all income 50:50 with the company rather than it taking 100%.Most employees have to leave a company in order to patent an idea and benefit from the income
The Construction Industry IS innovating as the status quo is not sustainable. Look at the innovation driven by Crossrail, BIM etc. The market will remove those not able to cut costs and time through innovation.
There are many good points raised in this article and the comments in response, which paint a picture of significant barriers and challenges. At Innovate UK we have recently opened a £2M Feasibility Study call to explore improved means for communicaiton and to enable wider collaboration. Thorugh this call we hope to explore solutions to a range of issues resulting from poor collaboraiton and stifling of innovation in the construction sector. This call is now open and closes for registrants on the 15 April 2015 - for more information please see - Supply chain integration in construction Up to £2m for feasibility studies to explore new ways of increasing collaboration and improving the flow of information throughout the construction supply chain. Grants will be awarded to consortiums and individual project costs are expected to be £50k - £150k. - The competition brief can be accessed at: https://interact.innovateuk.org/competition-display-page/-/asset_publisher/RqEt2AKmEBhi/content/supply-chain-integration-in-construction - The deadline for registrations is 15 April. - To stay up to date on the latest information for this competition, join the group at: https://connect.innovateuk.org/web/scic
Strange that none of the comments mentions payment issues for subcontractors as being the main cause of stifling innovation! There is a mass exodus of the really talented and innovative specialists who are choosing to work directly for clients or getting out of construction altogether, leaving behind lots of inferior contractors who don't do a good job and who are not innovative
I agree with Simon here. But I wonder whether there is another cause in the complexity of project relationships and the consequent commercial risks for each business. We are a Tier 2 contractor, and every contract starts with too law a margin to be profitable. So it's a fierce and complex scrap from the off. Innovation is too high a risk for companies singly never mind together. And frameworks barely touch Tier 2's. When they do they are still competitive. We have invested in off-site manufacturing and our commercial team in recent years. But we've only had a decent return on the commercial investment.
I'm a consulting innovation project manager working for a delivery partner. Sounds like I'm part of the problem not the solution! Good article though :-)
Status quo of what, doing things differently from what, Improving performance to what, looking for answers from others because that's the easy thing to do and calling it connectivity on the grounds of innovation. Whilst this is a though provoking article which encourages people to think it is quite meaningless. Simon you will enjoy this, I am a project manager. Concider innovation as standardisation, long gone are the glorified days of old, welcome to the new world.