Appropriate innovation in small construction firms

Abstract

Innovation‐led performance improvement in the construction industry is significantly influenced by the innovation performance of small firms. There is a dearth of research investigating innovation from the perspective of the small construction firm. This paper contributes to this underdeveloped area by offering relevant empirically based results. The findings stress the important role that owners of firms play in successful innovation. The type of innovation undertaken, and the different organizational factors which are brought into play, is shown to depend on the characteristics of the interaction environment in which the firm is operating. Small construction firms need to incrementally nurture, or identify and move into, supportive enabling interaction environments. This is achieved through an integrated development of a firm's business strategy and market positioning, organization of work, technology and people. The process of innovation is demonstrated to be subject to cyclical peaks and troughs as the progress of the innovation competes with day‐to‐day pressures. Small construction firms have their own distinctive characteristics, which are profoundly different from those of large construction firms. The implication for policy is that any initiatives geared toward improving appropriate innovation need to appreciate these differences.