Innovation process

This section describes the innovation processes of the different companies. For each type of company is elaborated what the general innovation process is of the company. During the

interviews was noticed that the innovation processes of different types of companies differ. Based on this the innovation processes are described for each company separately.

Contractor

From the interviews can in general be concluded that the main reasons for contractors to innovate is because of opportunities in the market. Parties are trying to increase their competitive

advantage over other parties by using innovations. Using integrated contract types (like Design & Construct) do offer the opportunity to innovate. However this is not dedicated to contract form only. Innovation is possible because of freedom in the contracts. When for example the client of a D&C contract still prescribes solutions for the tenderers, innovation potential of contractors is highly reduced. Contractors need the freedom to put in their own knowledge and skills into the project. From this basis they are able to develop new innovations.

Especially the larger companies (company number 6 and the German parent company) innovate by developing innovations totally new to the market (architectural innovations). Those companies have a significantly large R&D department responsible for the innovations. Market shifts are the main ground for the innovations. From these market shifts the R&D department determines in what direction innovations are developed, hereafter the actual innovation procedure starts. During this process testing is extremely important, the companies build large testing grounds to test the innovations in a real life environment. The innovations they develop differ from manufacturing equipment to new techniques and processes.

Especially SMEs innovate mainly on project basis. Their organizations are erected as project organizations, constructing several projects in a certain business line for different clients. The companies claim that their innovations are mostly incremental innovations. Innovation is for them ‘updating or adapting an existing technology’. These are always adapted in a way that the current project can be executed. For these companies it is most important to execute the project

according to plan, adaptions of technologies are necessary. Furthermore it should be noticed that these companies do not have a prescribed innovation process. Innovations are mainly developed by a small, experienced team and then executed on a trial –and– error basis. For SMEs it is important to be involved early with the client. Then they have more time to think about their innovations and to develop these in cooperation with the client. Patents are not important for SMEs. It is claimed that their innovations are minor and the process of patenting costs too much time.

Engineering firms

Engineering firms differ on some aspects in the development of innovations from contractors. However no clear distinction in the results from the interviews can be made related to the size of the companies. For engineering firms the main reason to start innovating are developments in civil engineering. Furthermore they try to stay ahead on competitors by innovating. To lesser extent engineering firms are innovating very specifically in response to market changes.

57 The innovation process whereby new innovations are developed can be classified as the innovation funnel. The innovation funnel is described in Schilling (2013).

Figure 20: Innovation funnel from Schilling (2013)

Focusing especially at the new innovations developed by engineering firms the process can be seen as the innovation funnel. Within engineering firms these ideas are generated by employees working at the firm. Each department has a certain innovation budget and manager who is responsible for the innovations. When the idea is accepted by the manager, company resources are used to develop the idea to an actual innovation. For engineering firms the idea generation is highly important for the eventual development of new ideas. Therefore people are stimulated to pitch new idea. For the innovation capacity of these firms the idea generation of employees is extremely important. Only when employees are well known with the innovation process and where to pitch their idea, innovation might become a success.

For engineering firms it is important to be involved early in the contract. In that case the firms can bring in their knowledge to develop innovations. However engineering firms are always involved early with the client and therefore the amount of innovation capacity is not so dependent on contract type or freedom within the contract. This can be explained by the following. In traditional contracts (for example: RAW) engineering firms are hired by public agencies to develop the specifications and conditions for the contract. In that case they can bring in their knowledge and expertise on this side of the table. Whereby they have the possibility to integrate incremental innovations. Using integrated contracts engineering firms are mainly hired by a consortium or a main contractor. In that case the engineers can bring in their knowledge and expertise on that side of the table. For likeliness of innovations it does not matter whether they are hired by public agencies or contractors. In both cases they are involved early and workout he eventual plan. Innovator

The innovation process of innovators is different than that of contractors and engineering firms. Innovators are mainly small companies (up to 5 fte) owned by someone who has produced certain innovations in the past. For the innovation process, innovators start by having a good idea in which they trust. After doing market research and deciding whether there is market perspective for the innovation, they develop the idea. Resources are needed when companies want to innovate. Innovators mainly do not have those resources so partnering is important for them. The most important resources for innovations are: capital and workforce. Capital is mainly obtained by governmental grants. Workforce is most of the time hired externally or by partnering with other companies. When innovators decide to partner, it is for them important to preserve the say about the company or the idea. The business case of innovators is to generate innovations. After innovations are developed, innovators try to sell the idea and move on to other projects.

58 Conclusion

This section answers the following theoretical research question: What is the current innovation process market parties follow internally to develop innovations?

One innovation procedure for all types of market parties does not exist. Grounds for innovation, important factors, innovation processes and the results for innovation vary between the market parties. This is summarized in Table 6. As can be seen does the process, ground for innovation and important factors differ for the different companies. A conclusion regarding the IPQ is that these parties might react differently on several provoking aspects in the PP. Additionally these parties might be provoked in another way on several aspects.

Table 6: Innovation processes of the different parties

Large contractor SME

contractor

Engineering firm Innovator

Ground for innovation

Market changes Projects Stay ahead of

competition, keep track of developments Idea Important factors Patents Early contractor involvement Rewarding employees, early contract involvement Need for resources Innovation process Prescribed innovation process by R&D department Trial – and – error

Innovation funnel Not defined

Result Mainly architectural innovations Mainly incremental innovations Incremental,

architectural and radical innovations

Incremental and

architectural innovations