The consistency of innovation activities of Finnish construction companies studied at the University of Oulu

Construction companies are generally considered conservative and slow to adopt new technology. Kai Hänninen from the Kerttu Saalasti Institute of the University of Oulu, Jouni Juntunen from the Business School and Harri Haapasalo from the Industrial Engineering and Management Research Unit studied the consistency of innovation activities of Finnish construction companies. The study identified factors that promote innovation activities and barriers to the activities.
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The factors that enable innovation are the client, learning and management support, while the barriers to innovation are costs, competence, contracts and regulation. The results show that construction companies can be divided into three categories according to the consistency of innovation: internal innovators, non-innovation-oriented introverts, and innovation-oriented extroverts. These categories reflect the different innovation perceptions of the companies and the variables that affect the company’s innovation.

The study used structural equation modelling (FMSEM) to identify the consistencies (logic) of innovation activities that unite the companies. According to the study, Finnish construction companies can be divided into three innovation categories. First, internal innovators are conservative and keep innovations within the company. These innovations are usually learned from others, which leads to only minor development in the industry. Second, non-innovation-oriented introverts do not play a significant role in innovation in the company, and they only deliver what is requested in the bids. Third, innovation-oriented extroverts understand the importance of innovation and implement an “open innovation system” that leads to productivity improvement and enables more diverse innovation activities.

The study produced new information on the innovation activities of Finnish construction companies. The ability of companies to renew and innovate is vital for maintaining competitiveness. The innovation activities of Finnish construction companies can be described by three different categories: internal innovators, non-innovation-oriented introverts, and innovation-oriented extroverts. Companies can use the research results to help identify and develop their own innovator model. Developing the model may require changes in the organizational structure or strengthening the innovation-friendly and open corporate culture.

Research paper:
Hänninen Kai, Juntunen Jouni & Haapasalo Harri: Identifying latent classes to successful AEC innovation through a survey of Finnish construction companies. Emerald Insight. 12.4.2023.

Further information:
Senior Research Fellow Kai Hänninen, University of Oulu Kerttu Saalasti Institute
kai.hanninen@oulu.fi

Last updated: 7.11.2023