Logic of innovation activities of Finnish construction companies studied at the University of Oulu

Construction companies are considered conservative and slow to adopt innovative technologies or services. Kai Hänninen from the Kerttu Saalasti Institute, Jouni Juntunen from the School of Business and Harri Haapasalo from the Research Unit of Industrial Engineering and Management studied the logic of innovation activities of Finnish construction companies. The study identified factors promoting innovation activity and obstacles to action.

Enablers for innovation are the client, learning and management support, while barriers to innovation are costs, skills, contracts, and regulation. Results show that construction companies can divided into three consistent innovation logics: the internal innovators, the non innovation-oriented introverts and the innovation-oriented extroverts. These categories reflect companies' different perceptions of innovation and the variables that influence their innovation.

Study used structural equation modelling (FMSEM) to identify the logic of innovation activity that unites companies.

According to the study, Finnish construction companies divided into three innovation categories. First, internal innovators are conservative and consider innovations within the company. These innovations usually learned from others, which leads to little development in the industry. Secondly, for introverted non-innovators, innovation does not play a significant role in the company, and they only deliver what customer demand in offers. Third, outward-looking innovators understand the importance of innovation and implement an "open innovation system" that leads to improved productivity and enables more diversified innovation.

The study produced added information on the innovation activity of Finnish construction companies. An ability of companies to renew and innovate is vital for maintaining long term competitiveness. The innovation activity of Finnish construction companies can describe according to three logics: internal innovators, introverted non-innovators and outward-looking innovators. Companies can use the research results to help identify and further develop appropriate innovator model. The development of an operating model may require, for example: changes in organisational structure or strengthening an innovation-friendly and open corporate culture.

Research publication:
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

Last updated: 16.5.2023