Having reviewed literature on the three separate elements of innovation, projects and regulation, the three ‘element pairs’ are considered; innovation and regulation, innovation and projects, regulation and projects; before being synthesised to substantiate the research and inform two Research Questions.
2.15.1 Innovation and regulation
Gann notes that ‘our understanding of innovation in construction processes is far from complete’ (Gann, 2000: 210) and list five elements that require further attention, including the regulatory environment in which innovation takes place, which is illuminated by this research. Winch (1998) notes the connections between innovation and regulation in project-based working from the perspective of project-based firms, and Gann (2000) notes the need for project-based firms to assimilate project-generated innovation into ‘organisational memory’.
In developing this argument, Gann (2003) contributes a useful point to the research justification, noting that regulation does not necessarily drive innovation in ways of working because project management is not normally subject to regulatory conditions. However, innovation in ways of working may act as a lever for accelerating innovation in products and processes to meet criteria for performance-based regulation of, for example, the Code for Sustainable Homes. Further, ‘economies of effort’ may deliver more purposeful ways of improving performance in project working, which challenge more traditional practices. Thus the research area is both subtle and nuanced.
These points are usefully amplified and summarised by Shields (2005: 19) who notes that construction innovation research has a tendency to focus on the ‘on-site activity’ rather than on the associated framework, that the
59 focus has been on firms rather than projects because both economic theory and policy-making locate innovation and its value in the context of firms, and that construction research continues to view innovation as primarily associated with firms’ products, rather than as a process within a broader complex system.
Within this context, this research considers innovation in response to regulation at the inception, planning and design stage of the project itself for all the organisations involved for which innovation, and its value, has different meanings at their own sector levels and at an individual organisation level.
2.15.2 Innovation and projects
‘A dearth of research’ on innovation in project-based firms has been identified (Keegan & Turner, 2002: 367), where innovation in ‘project- based, service-enhanced enterprise’ is not ‘adequately addressed’ (Gann & Salter, 2000: 955). However, although a recent growth in the focus of research in project-based innovation has been noted (Acha et al., 2005) this is still primarily at the level of firms participating in projects, rather than in the context of the complex interplay of organisations in the project itself. In addition, Harty notes that current thinking on innovation in construction ‘fails to take multiple and contrasting perspectives’ (Harty, 2008: 1029) into account, recognising that the range of organisations involved in projects will have different, and potentially conflicting, perspectives and drivers.
The inherent nature of projects as temporary groups of organisations tends to inhibit innovation within projects (Gann, 2000; Sexton & Barrett, 2005) and establishing the ownership and associated benefits arising from project-based innovation in products and processes is difficult to establish (Barlow, 1999; already noted as a potential reason for housing construction as a low-level innovation).
60 Gann notes that project-based construction firms are good at project work but often less good at ‘organising internal business processes’ (Gann, 2000: 226) because projects are one-off and task-oriented, where every project is regarded as new and there is little transfer of knowledge from projects to the ‘internal structure, systems & cultural attributes’ (Gann, 2001: 327) to be used as a starting point for future projects. This contributes to the view that the sector has both too much and too little innovation - ‘there are plenty of new ideas, but they tend not to achieve good currency’ (Winch, 1998: 271) thus not fulfilling the definition of innovation as the successful application of a new idea (as defined in Section 2.3). The ‘good currency’ needs to be applied to subsequent projects to generate value in order for new ways of project working to be successful.
Further, Lu and Sexton (2006) note the differences between ‘explorative innovation’ for solving problems presented at individual project level, and the ‘exploitative innovation’ arising from this that can add organisational value, or reduce the cost of time, and bridging the gap between the two innovation types is identified as the challenge for construction projects (Gann, 2000; Dubois & Gadde, 2002). This would move housing construction innovation from the product-based ‘low level innovation’ discussed in Section 2.8.1 to the assimilation of the value of process- innovation to an organisational level defined as ‘organisational memory’, adapting knowledge gained from problem-solving in specific projects as ‘algorithms of repeated activity’ (Nelson & Winter, 1982, noted by Acha et al., 2005).
Thus the literature shows that project-working tends to inhibit innovation, and that the value of any explorative product or process innovation that arises is difficult to assign to any project organisation as exploitative. This research aims to include an identification and assessment of innovation in the context of an early-phase SOCIAL housing development project.
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2.15.3 Regulation and projects
There is minimal literature that focuses on the links between regulation and projects, although Gann (2000) notes that a project-based environment generates a dynamic process for organisations within both a shared and discrete regulatory landscape. This dynamic process, within the regulatory given environment, can promote or inhibit innovation. The research aims to add value to the landscape of innovation, regulation and projects by specifically considering this landscape and the associated innovation responses.