Opening Up the Innovation Process in Construction Firms: External Knowledge Sources and Dual Innovation

Abstract

Empirical evidence on the relative significance of various sources of knowledge for different construction firms’ innovation activities and processes is limited. This study examines the relationships between six external knowledge sources and two types of innovation processes (exploratory and exploitative) in construction firms. The study is based on survey data from 167 managers in construction firms in Hong Kong. The partial least squares structural equation modeling results show that knowledge from clients and suppliers each significantly affects exploratory and exploitative innovation. Knowledge from universities and research institutions significantly affects exploratory innovation but not exploitative innovation. The other three sources (subcontractors, joint venture partners, and competitors) have no significant effects on either innovation type. The study is among the first to empirically explore the links between external knowledge and innovation (exploratory and exploitative) from a process perspective. It also extends open innovation research into the context of construction, showing the knowledge search activity of construction firms and how it influences innovation processes with practical implications for practitioners.