Engineering, Construction and Architectural Management

The role of technology transfer in innovation within small construction firms

Martin Sexton Peter Barrett
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Martin Sexton Peter Barrett, (2004),"The role of technology transfer in innovation within small construction firms", Engineering,
Construction and Architectural Management, Vol. 11 Iss 5 pp. 342 - 348
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The role of technology
transfer in innovation
within small
construction firms
Martin Sexton and
Peter Barrett
The authors
Martin Sexton is a Senior Lecturer and Peter Barrett is a
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Professor at the Research Institute for the Built and Human
Environment, University of Salford, Salford, UK.
Keywords
Innovation, Construction industry, Information transfer,
Small enterprises
Abstract
Findings were drawn from an 18 month research project
involving in-depth case study and action research fieldwork with
seven small construction companies to understand the role and
significance of innovation for them. A key finding of the work
has been the importance of the role of effective technology
transfer in the innovation process. The organizational factors of
innovation model is presented as an analytical and prescriptive
tool to assist small construction firms to understand better and
manage the technology transfer process. The utility and
application of the model is illustrated with a case study.
Electronic access
The Emerald Research Register for this journal is
available at
www.emeraldinsight.com/researchregister
The current issue and full text archive of this journal is
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Engineering, Construction and Architectural Management
Volume 11 Number 5 2004 pp. 342348
q Emerald Group Publishing Limited ISSN 0969-9988
DOI 10.1108/09699980410558539
Introduction
Technology transfer is widely considered to be a
potentially powerful source of innovation which
can provide construction firms with new
technologies that can, appropriately, transform
and complement current technologies to create
and sustain better levels of performance (Sexton
et al., 1999; Nonaka and Takeuchi, 1995; Kogut
and Zander, 1992). Technology transfer is viewed
as the movement of knowledge and technology via
some channel from one individual or firm to
another (Inkpen and Dinur, 1998; Gibson and
Smilor, 1991; Devine et al., 1987). Further, we
take a broad view of technology, defining it as the
know-how about the transformation of operational
technologies and processes; material technologies;
and knowledge technologies (Wilson, 1986;
Hickson et al., 1969).
The construction industry delivers its product
to its client base by way of a stream of generally
single and unique projects. These projects typically
draw together a significant number of diverse small
and large construction firms into varying
collaborations (Betts and Wood-Harper, 1994).
The ambition to bring about the kind of step
change improvements in construction industry
performance called for by the Egan report
(amongst others) must, by necessity, appropriately
envision and engage large and small construction
firms. Further, the scale of small firm activity in the
UK construction industry is considerably, in 1999,
99 percent of UK construction firms having 1-52
staff (Department of the Environment, Transport
and the Regions, 2000: table 3.1), delivering some
52 percent of the industrys workload in monetary
terms (Department of the Environment,
Transport and the Regions, 2000: table 3.3.)
Therefore any overall performance in the
improvement of the industry through technology
transfer is significantly influenced by the ability of
small construction firms to absorb and use new
technology.
The role of technology transfer in the
innovation of construction firms in general, and
The ISCF project was funded by the EPSRC /
DETR: IMI Construction Link programme (grant
number: GR/M42107/01), and this support is
gratefully acknowledged.The academic team was
supported by Marcela Miozzo and Alex Wharton,
University of Manchester, Institute of Science and
Technology, and Erika Leho, University of Salford.
The seven collaborating firms were Bosco
Construction, Christodoulou Marshall Architects,
Contract Services (R&R), Parker Wilson, PLP
Construction, Taylor Hutchinson & Partners, and
Wardle Associates. Thanks are due to all the members
of staff involved.
342
 Technology transfer within small construction firms Engineering, Construction and Architectural Management
Martin Sexton and Peter Barrett Volume 11 Number 5 2004 342348

small firms in particular, is poorly understood, and
there is a clear need to rectify this (Atkin, 1999;
CRISP, 1999). The aim of this paper is to
contribute to this under developed area of
innovation in small construction firms by offering
new theoretical and practical insights and models
coming out of an 18-month EPSRC IMI
Innovation in Small Construction Firms (ISCF)
project. The structure of this paper is as follows.
First, key issues from the technology transfer
literature will be presented. Second, the aims and
the research methodology of the ISCF project will
be briefly described. Third, key findings from this
project will be presented. Finally, conclusions and
implications will be drawn, and in doing so, it
offers a more detailed understanding of the role of
technology transfer in ISCF.
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appropriate innovations. Experience from the
manufacturing sector, for example, has
stressed that the capacity of companies to
understand and effectively use new
technologies from external sources is heavily
influenced by the level of prior-related
knowledge and expertise (Alder and Shenhar,
1993).
.
Finally, current technology transfer
mechanisms do not fully appreciate both the
ability and motivation for construction firms
to absorb and use new technologies are
significantly influenced by the knowledge
characteristics of the technologies. Hard
technologies which are characterised by
explicit knowledge require very different
diffusion mechanisms and organizational
capabilities and processes than those required

for soft technologies which are tacit in

Key issues from the literature nature.

Performance improvement based on technology The implications of these barriers for technology
absorbed into construction firms through transfer in small construction firms crystallises the
technology transfer does occur successfully. systemic nature of technology transfer, and can be
However, firms need to understand and manage fruitfully viewed, as shown in Figure 1, as a
technology transfer activity to ensure consistent technology transfer system (Sexton et al., 1999):
success. Sung and Gibson (2000) identified the
.
Organizational direction and capability the
following variables as affecting the degree of motivation and ability of small construction
success in the process and results of technology firms to absorb and innovate from new
transfer: person-to-person contacts; knowing technologies has to come from within the firm;
whom to contact; variety of communication through envisioning technology strategies and
channels; set up transfer office or committee; supporting organizational capabilities.
a sense of common purpose; understanding of
. Inter-organizational networks small
the nature of the business; attitude and values; construction firms, along with all firms, do not
increase in awareness of transfer; concreteness operate in a vacuum; rather, they are situated
of knowledge/technology; establishment of a
collaborative research program; clear definition Figure 1 The technology transfer system
of transfer; provision of incentives for transfer and
product champions. However, present
construction industry technology transfer
endeavours are being severely hampered by a lack
of proper understanding of such technology
transfer issues and their interrelationships to both
company capabilities and processes, and the
knowledge characteristics of the technologies
being transferred; in particular (Barrett and
Sexton, 1999):
.
First, current approaches tend to view
technology transfer as a mechanistic pick-
and-mix exercise identifying new
technologies, and trying to insert them in their
existing form into (unsurprisingly)
unreceptive construction firms.
.
Second, current technology transfer
mechanisms are not sufficiently informed by,
or engage with, company strategic direction
and organizational capabilities and processes
necessary to enable them to absorb
technologies and to turn them into
343
 Technology transfer within small construction firms
Martin Sexton and Peter Barrett
in a number of fluctuating inter-organizational
networks of varying complexity. Inter-
organizational networks promote and
facilitate the development and transfer of
knowledge and resources needed to encourage
learning and innovation in participating firms.
. Knowledge characteristics of technology the
extent to which new technology can be
effectively absorbed by small construction firms
is substantially influenced by the characteristics
of the technology being transferred.
Two characteristics are especially important.
The first is the extent to which the knowledge
embodied in the technology is explicit or tacit.
Tacit knowledge is hard to formalise, making it
difficult to communicate or share with others.
Tacit knowledge involves intangible factors
embedded in personal beliefs, experiences and
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values. Explicit knowledge is systematic and
easily communicated in the form of hard data or
codified procedures. The second characteristic
is complexity. Whether based on explicit or tacit
knowledge, some technologies are just more
complex than others. The more complex a
technology is, the more difficult it is to unravel.
The argument is that technology transfer will only
be effective if all three elements strategic
direction and capability, inter-organizational
networks and the knowledge characteristics of
technology are appropriately focussed and
integrated to achieve a specific aim.
In summary, the literature stresses the
important role of technology transfer in successful
innovation and offers prescriptive guidance on
how to manage the technology transfer process
activity. Research within the construction industry,
however, indicates significant barriers to effective
technology transfer.
Results from the ISCF project provide insights
into the nature of technology transfer in small
construction firms. Before presenting these results,
the aims and research methodology of the ISCF
project will be briefly detailed in the next section.
ISCF project aims and research
methodology
This paper is based on results from an 18-month
project looking at innovation in small construction
firms. The key aims of the project were to:
.
Determine what innovation meant for small
construction firms, particularly with respect to
what is the motivation to innovate; and what
constitutes appropriate innovation.
.
Investigate how small construction firms
create, manage and exploit innovation.
344
Engineering, Construction and Architectural Management
Volume 11 Number 5 2004 342348
The seven collaborating small firms consisted of
four consultants and three contractors. Firm size
varied from 11 to 26 staff, and the turnovers
(in 1999) ranged from 0.44 to 3.2 m. The overall
research process used in the ISCF project is given
in Figure 2 (Sexton and Barrett, 2003).
Key ISCF project results
Definition of appropriate innovation
The ISCF findings defined appropriate
innovation as:
the effective generation and implementation of a
new idea, which enhances overall organizational
performance
This definition contains the following
assumptions.
(1) Idea ideas are taken to mean the starting
point for innovation. Ideas can be
administrative and technical in nature.
(2) New not all ideas are recognised as
innovations and it is accepted that newness is a
key distinguishing feature. The idea only has
to be new to a given firm, rather than new to
the world. Further, the newness aspect
differentiates innovation from change. All
innovation implies change, but not all change
involves innovation.
(3) Effective generation and implementation
innovation requires not only the generation of
an idea (or transfer of a new idea from
outside the firm), but also its successful
implementation. The implementation aspect
differentiates innovation from invention.
(4) Overall organizational performance
innovation must improve organizational
Figure 2 ISCF research methodology
 Technology transfer within small construction firms
Martin Sexton and Peter Barrett
performance, either individually, or
collectively through the supply chain.
Innovations that improve some isolated aspect
at the expense of overall performance are
undesirable.
Organizational factors of innovation model
The key implication of the ISCF definition of
innovation for technology transfer for small
construction firms is that they need the
organizational capability and an appropriate
response to the interaction environment to absorb
and use appropriate new technologies. The ISCF
findings produced a model of the organizational
factors critical to successful innovation (Figure 3)
which proved to be useful in both understanding
and managing innovation activity i.e. it is both an
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analytical and prescriptive model. The variables
which make up the model are defined as follows.
. Business strategy is concerned with the overall
purpose and longer-term direction of the firm
and its financial viability.
.
Market positioning is the chosen (or emergent)
orientation towards desired target markets for
the purpose of achieving sustainable
profitability.
.
Technology is the machines, tools and work
routines used to transform material and
information inputs (for example, labour,
Figure 3 Organizational factors of innovation model
345
Engineering, Construction and Architectural Management
Volume 11 Number 5 2004 342348
raw materials, components, capital) into
outputs (for example, products and services).
.
People are viewed as possessing knowledge,
skills and motivation to perform a variety of
tasks required to do the work of the firm.
.
Organization of work involves the creation and
coordination of project teams and commercial
networks both within the firm and across its
business partners.
. Interaction environment is that part of the
business environment which firms can interact
with and influence.
.
Given environment is that part of the
business environment which firms are
influenced by, but which they cannot
influence themselves.
The model proposes that business strategy / market
positioning, organization of work, technology, and
people are the key organizational variables in
understanding and improving innovation in small
construction firms. The model emphasises and
embraces both the holistic and systemic
dimensions of innovation. The creation,
management and exploitation of innovation
involves consideration of not only the content of
a chosen innovation, but also the management
of the process of innovation and the context in
which it occurs. The model considers two
aspects of context: the inner and outer contexts of
 Technology transfer within small construction firms
Martin Sexton and Peter Barrett
the firm. The inner context refers to the business
strategy / market positioning, organization of work,
technology and people. The outer context refers to
the given and interaction business environments.
The process of innovation refers to the actions,
reactions and interactions of, and between, the
various organizational variables in the outer and
inner contexts.
The utility of the organizational factors of
innovation model for understanding and
managing technology transfer will be discussed by
drawing upon a case study of one of the ISCF
project collaborating firms.
Case study of technology transfer
The case study describes Consultant Bs
absorption and use of an off-the-shelf
computerized quantity surveying system.
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Consultant B is a quantity surveying and
construction cost consultancy with a turnover of
0.44 million in 1999. The firm has two partners
and eleven staff. The case study will be structured
around the organizational factors of innovation
model.
Given / interaction business environment
The ISCF project findings identifies clients as
being the driving influence in the interaction
environment. In common with all of the
collaborating firms, Consultant B emphasised
that:
our strategy is very much driven from the outside
by clients . . . it is difficult for a practice our size to
be proactive.
This was the case with the trigger to adopt and use
the new computerised quantity surveying system,
with it being stressed that:
our clients initially drove it . . . ten or twelve years
ago we were working for [a UK water utility] and
they insisted that all their bills be produced on a
particular package.
Business strategy/market positioning
The ISCF project findings suggest that owners of
small construction firms view the increasing
investment in information technology as an area of
significant innovation activity in itself, and as a
powerful enabler for innovation in enhancing the
quality and efficiency of the services their firms
offer. Consultant B believed that it needed to
invest in specialist software to enable them to
compete with its competitors. Having measured a
job, the firm wanted to be able to produce a more
flexible document:
We wanted something that we could adapt and
alter slightly, because, although it is based on a
standard library, which is based on the standard
method and measurement, which is the
time-honoured way of producing a bill of
Engineering, Construction and Architectural Management
Volume 11 Number 5 2004 342348
quantities, the industry wanted things quicker, and
we needed something that would allow us to make
short-cuts and wouldnt keep us in a
straightjacket. Weve just done a job for which one
document was required for three different
buildings. Basically once youve got one, its very
quick to do the other two. Much quicker that it
would have been before; it is more efficient.
A further critical consideration in this sifting and
evaluation process is the financial implications of a
given technology transfer issue. The financial
constraints faced by small construction firms
affect the general capacity and capability for
innovation. A partner of Consultant B argues that:
small firms have a tight budget, so they dont have
the people around to tackle a specific problem . . .
the cost of innovation is the short-term human
involvement, and then having committed the
capital to physically spend, you need some human
time to make it work. The three go together. The
big one though is the cash one.
This significant barrier to innovation is evident in
Consultants B future thinking for the
computerised QS system:
. . . we B would like to digitise its QS system,
enabling staff to quicken the speed at which they
measure external areas of buildings. However, the
idea is considered too expensive and would need
guaranteed work to make it worthwhile.
The key argument presented here is that, owners of
small construction firms need to be confident of
the business benefit of absorbing and using a new
technology before they commit significant
resources.
In summary, the business strategy / market
positioning dimension to technology transfer is
very much centred around an informal, intuitive
process of identifying business needs and carrying
out cost benefit analyses to determine optimal
solutions. The owners are close enough to their
firms markets and capabilities to instinctively
know what will work and what will not.
Technology
The computerised quantity surveying system
chosen by Consultant B was proven off-the-shelf
solution. This was emphasised in the observation
that:
At the end of the day, its a system that any QS
could buy; its not something thats specific to us.
One of the partners of Consultant B stressed that
although the software was, in itself, a piece of
explicit, off-the-shelf technology, a significant
amount of tacit knowledge had to be developed
and shared before the technology could be
absorbed into the firm and used. Indeed, it is
acknowledged that we are fortunate, in may ways,
that we have one guy who works here who lives and
breathes computers and that:
346
 Technology transfer within small construction firms
Martin Sexton and Peter Barrett
it is a fair comment to say that much of the
knowledge needed [to use the software] is in
peoples heads . . . I think that what happens is that
if someone notices that if you press Alt-B this
happens, then the word gets around; but apart
from that no, theres no conscious decision to
disseminate the information.
In summary, small construction firms often lack
the organizational capability and capacity to
readily absorb and use technology requiring a high
degree of tacit knowledge. Small construction
firms focus on consumable technology which
can quickly and more easily be absorbed into the
organization by informal, mini-experimentation
through learning-by-doing.
Organization of the work
The organization of the technology transfer
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process involved Consultant B developing a
relationship with the supplier of the quantity
surveying software and the users of the software,
i.e. the firms staff.
The supplier relationship provided Consultant
B with access to the technical expertise of the
software house, and the experience of other firms
using the package. The benefits and nature of this
relationship were described as follows.
One of the benefits of the package is the support
from the software people, so that if we say this
didnt work well, or it would be handy to have this
in here, they will look at it. They have workshops
with various practices from around the country
who use it.
The staff engaged in the technology transfer
process at the piloting stage to ensure that the
technology met the needs of the business and to
nurture widespread ownership of the adoption of
the new technology. The purpose and aim of the
piloting stage was described as follows:
The job on which we trailed the packages was a
very, very simple job, a little bungalow . . . I think it
enabled us to choose the system; it showed us that
(a) it worked, and (b) people were happy to use it,
didnt find it too confusing and difficult.
The organization of work aspect, then focused
on developing supplier and external users network
to access expertise and experience, and to combine
this with the recipient firms own capabilities. The
combining of network and firm knowledge was
facilitated through internal piloting to enable safe
mini-experimentation and staff empowerment of
the new technology.
People
The staff of Consultant B need the knowledge,
skills and motivation to properly use the quantity
surveying software. The knowledge and skills were
developed in two ways. First, the software supplier
provided three training days as part of the package.
Engineering, Construction and Architectural Management
Volume 11 Number 5 2004 342348
Second, as described in the technology section
above, staff consolidated and developed their
knowledge and skills through informal learning
by doing.
The ability of staff to use the new technology
was not sufficient in itself; staff also had to be
motivated to use it. This managing people
through change aspect was considered as core to
the final success of the technology transfer. This
imperative was captured in the following
observation by one of the partners:
I think we took people along with us when we were
looking at it and making decisions; we didnt
impose it. So people understood what we were
trying to do and where we were trying to go. I dont
think there was any doubt that we were going to do
it. But because we wanted to keep the staff wed
invested a lot of time and money in them we
wanted to take them along with us, and make sure
they were happy.
In summary, the people factor of innovation
centres on developing the capability of staff to use
new technologies. This principally takes the form
of incoming expertise and experience from
supplier and external users networks (see
organization of work section) and learning-by-
doing. The motivation of staff to adopt new
technology is important, with appropriate
engagement and communication to effective
manage staff through change required.
Conclusions and recommendations
The ISCF results reveal that small construction
firms absorb and use technology which can
contribute to the business in a quick, tangible
fashion, and which can be dovetailed into
organizational capabilities they already possess,
or which can be readily acquired or borrowed
through their supplier and business networks.
Any technology which is too far removed from this
comfort zone, and which requires too much
investment and contains too much risk, tends to be
intuitively and swiftly sifted out. A safe evolution
approach to innovation through technology
transfer is taken as the way forward, not risky
revolution.
These results have implications for policy-
makers and small construction firms. Policy-
makers need to understand the differing ability and
motivation of small construction firms to absorb
and use new technologies compared to large
construction firms. Further effort by government
bodies and professional institutions is needed to
filter and package well proven technologies that
would appeal to small construction firms
(Sexton et al., 1999). For small construction
firms, the organizational factors of innovation
347
 Technology transfer within small construction firms
Martin Sexton and Peter Barrett
model assists in identifying the factors critical to
successful innovation through technology transfer:
business strategy / market positioning,
organization of work, technology and
people. The model provides a framework or
checklist to help owner(s) identify what action has
to be taken to progress an innovation in a systemic,
integrated way.
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