Understanding innovations in Malaysia’s construction industry: a study of four large national firms

Abstract

Little published work exists on innovation in construction, which is not helped by the diverse set of activities that characterise the industry. The early attempt to category sources of innovation in the industry depicted it as a supplier driven industry using large data sets from secondary sources. Given the lack of profound firm-level research in the industry, this paper uses four case studies of national firms in Malaysia to examine innovation in the industry. The evidence shows that major innovations in these firms evolve as a crystallization of project demand that drives firms to seek external sources of knowledge that is adapted to meet the construction demand of clients. In doing so two firms demonstrated radical innovations as its diffusion has transformed construction in Malaysia. The remaining two firms are engaged in incremental engineering activities. Also, innovations in two firms were led by their own managements, while the remaining two were supplier-led. In addition, while innovations in all four firms are characterised by re-conceptualisation of foreign sources of knowledge, innovation in one firm involved architectural designing and another modularisation. A blend of institutions constituted by government policy, in-house command, trust and collaborative practices, markets, and industry standards have shaped these innovations.

Keywords:

• incremental innovation
• institutions
• leadership
• collaboration
• trust

Notes

1. Interview by one author with chairman of two of the firms in the study, and another chairman from an additional firm on 2 March 2016.