Quasi-firms for Real Innovations

The construction industry is notorious for its (lack of) innovativeness. Many papers, reports and articles have been written on this subject already for more than three decades. The explanations presented can be summarized by such terms as fragmentation, segmentation and segregation when referring to the industries’ structure and by qualifications such as opportunistic, hostile, antagonistic and conflictive when referring to its culture. In this paper it is argued that the main reason for the innovation status quo is the fact that the construction industry, when compared to other industries, lacks real producersproducers who develop products and compete with each other in terms of these products. It is particularly this kind of competition which is identified as a source to stimulate innovation. In construction, production capabilities are tested on the market and not product capabilities. As a result, design decisions are not tested on the market. It is this flaw which is examined in this paper, and possible improvements are suggested. Endurable strategic alliances, as quasi-firms, are proposed as the equivalent of producers. Essential herein is the pivotal position of design. An organizational innovation as such could change the way business is done in the construction industry. It would alter its structure as well as its culture.