Building Research & Information (2002) 30(4), 237–247

Enhancing integration and innovation

in construction

Mohammed Fadhil Dulaimi, Florence Y. Y. Ling, George Ofori and Nayanthara De Silva

Department of Building, School of Design and Environment, 4 Architecture Drive,

National University of Singapore, Singapore 117566
E-mail: mdulaimi@nus.edu.sg

The poor performance of Singapore’s construction industry, like its counterparts in other countries, has been highlighted in
many studies. The most recent study in Singapore, ‘Re-inventing Construction’, criticized the performance of the industry
and identiŽ ed fragmentation and segregation of design and construction activities as the main barriers to improved invest-
ment and development. The objective of the paper is to identify the activities and initiatives that will motivate and enable
the Singapore construction industry to achieve both greater levels of integration and increase the volume of R&D and
innovation activities. An industry survey, workshop and interviews identiŽ ed six factors. The main theme underlying them
is the need for the creation of improved business and market conditions that demand further integration and greater
innovation effort to meet customer demands and expectations.

Keywords: construction business system, construction industry development, change, innovation, integration, institutional
change, research and development, project performance, Singapore

De nombreuses études ont mis en lumière les performances médiocres de l’industrie de la construction à Singapour et dans
d’autres pays. L’étude la plus récente sur Singapour, intitulée “Re-inventing Construction”, critiquait les performances de
cette industrie et estimait que les principaux obstacles à l’amélioration des investissements et du développement étaient la
fragmentation et la ségrégation des activités de conception et de construction. L’objectif de cet article est de recenser les
activités et les initiatives qui motiveront l’industrie du bâtiment de Singapour et lui permettront de parvenir à une meilleure
intégration et à une augmentation des activités de recherche et développement et d’innovation. Une analyse de cette
industrie, un atelier et des interviews ont permis de dégager six facteurs. Le thème principal sous-jacent est la nécessité de
créer de meilleures conditions pour les entreprises et le commerce, ce qui implique une meilleure intégration et un plus gros
effort d’innovation pour répondre aux demandes et aux attentes de la clientèle.

Mots clés : secteur de la construction, développement du secteur de la construction, changement, innovation, intégration,
changements institutionnels, recherche et développement, performances des projets, Singapour

Introduction and Ž nancial capacity that would enable them to compete

The fragmentation of the construction process and the low
level of investment in research and development (R&D) have
been highlighted in many recent studies in several countries.
The Egan Report (1998) criticized the construction industry
in the UK for investing too little in R&D. It further recog-
nized that fragmentation of the industry had inhibited
performance improvement. The ‘Building for Growth’ Report
(1999) criticized the construction industry in Australia for
its track record of low formal expenditure on R&D. It
identiŽ ed the need to integrate the construction supply chain
to enable Australian Ž rms to attain new levels of technical
internationally. The Construct for Excellence Report in
Hong Kong (2001) recognized the need for greater R&D
effort to enable the local industry to adapt the advances
in processes and technologies achieved in other countries.
However, it criticized the level of investment in R&D and
the lack of coordination between academia and industry
in research activities. It highlighted that the very limited
cooperation and fragmentation had impeded proper con-
sideration of issues such as buildability, safety and life cycle
costs. The Construction Task Force in Singapore, in its
Construction 21 (C21) Report (1999), also described a

Building Research & Information ISSN 0961-3218 print/ISSN 1466-4321 online © 2002 Taylor & Francis Ltd
http://www.tandf.co.uk/journals
DOI: 10.1080/09613210110115207
Dulaimi et al.
similar picture of a fragmented construction industry
suffering from inadequate levels of investment in new ideas.
However, the issues and concerns expressed above are not
new. They have been over the last 40 years outlined and
investigated in the course of addressing the inefŽ ciencies
in the construction industry (Banwell, 1964; Latham, 1994;
Egan, 1998). Nicolini et al. (2001) concluded that current
models of organizing construction activities did not enable
good performance on projects and, hence, the delivery of a
satisfactory service to customers. Greenwood (2001) further
provided evidence of the lack of cooperative relationships
between the main contractors and subcontractors. Instead,
traditional cost-driven and potentially adversarial relation-
ships still dominate the industry.
Innovation has been given increasing importance in the
business and research agendas of the leading commercial and
manufacturing organizations (O’Connor and Rice, 2001).
Meanwhile, construction industry reviews in many countries
continue to highlight serious deŽ ciencies and inefŽ ciencies
(Egan, 1998; C21, 1999; Construct for Excellence, 2001). The
observed low levels of R&D activities and innovation are
seen as signiŽ cant barriers that restrict the development of
the construction industry.
A major study was undertaken to review the recommen-
dations of the C21 Report. From the study, nine areas with
the potential to bring improvement to the construction
industry were identiŽ ed. The present paper focuses on the
two aspects of integration and innovation in Singapore’s
construction industry. The objective is to identify the
activities and initiatives that will motivate and enable the
construction industry in Singapore to achieve greater levels
of integration and to increase the volume of its R&D and
innovation. The Ž ndings provide key knowledge to policy-
makers in the construction industry of the barriers and
inhibitors, as well as opportunities, for achieving greater
integration and higher level of R&D effort.
Background
Reinventing construction
The C21 Report is a milestone in the development of the
construction industry in Singapore. It highlighted the main
weaknesses and strengths of the industry, its historical
development and examined the main initiatives established to
drive the industry to improve its performance and image. It
provided recommendations and targets for policies, legisla-
tion and key changes to the practices and procedures of the
construction industry and its main stakeholders to realize set
levels of improvements.
The recommendations were underpinned by a strategic
vision for Singapore’s construction industry, which is ‘To be
a world-class builder in the knowledge age’. To achieve this
vision, the report stressed that it would be necessary to effect
a paradigm shift in the image, processes and purpose of
238
the construction industry. It formulated six strategic thrusts
for the development of the local construction industry:
enhancing the professionalism of the industry; raising the
skills level; improving industry practices and techniques;
adopting an integrated approach to construction; developing
an external wing; and a collective championing effort for the
construction industry.
Integration issue in the C21 Report
The C21 Report criticized the sequential nature of the con-
struction process, which was attributed to the fragmented
nature of the construction industry. The lack of integration
across the value chain is seen as being one of the major
causes of low productivity. The motivation for greater inte-
gration is in the expected improvement that can be realized
from the closer cooperation between consultants and
constructors involved at the different stages of the design
and construction processes. The report’s recommendations
in this area centre on two key changes and initiatives to
encourage and enable greater integration in Singapore’s con-
struction industry. The Ž rst is the promotion of the Design
and Build (D&B) procurement method through providing
a conducive environment for the D&B arrangement and the
encouragement of the formation of multidisciplinary Ž rms.
The second is for the client to play a catalytic role by
embracing D&B and tendering methods that emphasize
greater integration across the value chain.
Innovation issue in the C21 Report
One cornerstone of the C21 vision is the creation of a knowl-
edgeable workforce. Under the strategic thrust ‘Enhancing
the Professionalism of the Industry’, the report calls for
the development of a more progressive industry through the
promotion, recognition and reward of creativity, quality
work and innovation. This would require initiatives at the
professional, company and industry levels to create a culture
that encourages and promotes innovation and creativity.
One of the key recommendations under this thrust was the
creation of a code of conduct for professionals such as
Project Managers. However, the motivation is in the main to
stamp out unacceptable practices and increase professional-
ism to improve the image of the industry.
The strategic thrust ‘Improving Industry Practices and
Technologies’ calls for the stepping up of R&D to enable
the industry to improve its performance. The main recom-
mendations focused on the development of a coordinated
approach to R&D, increased funding for an enhanced and
sustained R&D effort, and targeting R&D effort on tech-
nologies and materials key to Singapore’s environment and
climate as well as those that raise productivity.
Integration and innovation issues in other studies
The continuous shift in the business environment and
practices, increased complexity of products and technologies,
and increased sophistication of customers have motivated the

construction industry to explore alternative strategies and
philosophies for developing and procuring construction
projects. The belief that increased specialization would drive
up efŽ ciency has led to increased fragmentation of the
different aspects of design and construction. Construction
Ž rms’ desire to enhance their competitiveness in their own
area of specialism has propagated a more fragmented and
narrowly focused R&D effort.
Further, the adversarial attitudes adopted by the polarized
service providers have generated major obstacles to
reintegrating the value chain. Harmony and cooperation
have proven to be an aim too difŽ cult to achieve (Dulaimi
and Kumaraswamy, 1999). Present procurement methods and
contractual arrangements were seen to enforce differences
in values, goals and orientation that exist within the con-
struction project team (Bresnen and Marshall, 2000).
A reintegration of the principal construction services
through single-source ‘D&B’ became increasingly popular
and even advocated through government policy (C21, 1999).
However, such methods are not without their disadvantages,
and so cannot be deployed on all projects. It has been alleged
that clients may see these methods as mere opportunities for
‘risk dumping’ (Hemlin, 1999).
Recently, the construction industry experienced new develop-
ments and innovations to address the problems of inter-
dependence and uncertainty in the industry through the
adoption of more informal problem solving and adaptation
of interfaces. The increased interest in relationship contract-
ing, exempliŽ ed by the Partnering procurement framework,
was motivated by the desire to achieve greater team inte-
gration (Bresnen and Marshall, 2000). While partnering
was met with varying degrees of success, it was generally
accepted as a valuable approach to integrating polarized
project participants (Dissanayake and Kumaraswamy, 1999).
The effort to Ž nd new organizational structures to deal
with the aspects of interdependence and uncertainty proposed
the use of work ‘clusters’. Nicolini et al. (2001) suggested
the adoption of work clusters that are in many respects
design and construct miniprojects. This idea seemed to build
on the principle of D&B and the recognition of the need to
facilitate the exchange of information, knowledge, expertise
and innovation. These clusters operated ‘as semi-independent
parts of the project under the overall coordination of the
contractor or project manager, replicating the logic of one
point responsibility down the supply chain’ (Nicolini et al.,
2001).
Fragmentation has also created barriers to the development
of a coordinated innovation effort. It has been argued that
the main issue in developing new products is reintegrating
what has been divided as organizations and their products
become more complex (Liker et al., 1999). The issue of
integration of the design and production is evidently funda-
mental to the realization of innovation. There is evidence
Enhancing integration and innovation in construction
of the high cost in integrating design and manufacturing
(Susman and Dean, 1992). Fragmentation would create a
gap through which knowledge would Ž nd it difŽ cult to be
effectively exchanged between the different contributors to
the design and construction of a project.
To recognize the C21 aim of developing a knowledge-based
construction industry in Singapore, a signiŽ cant improve-
ment in the level of integration would need to be achieved
between the different parties. Singapore’s construction
industry would also need to enhance the level of innovation.
The C21 Report has made recommendations for government
institutions to lead and organize R&D effort in construction.
However, Seaden and Manseau (2001) examined the role
of governments’ policies towards enhancing innovation in
construction. After examining such policies in 15 countries
around the world, they concluded that most of currently
available public policy instruments in support of innovation
are not effective. Instead, construction Ž rms need to focus on
developing the momentum for change and innovation within
their own business organizations.
The different recommendations of the C21 Report would
need to overcome the technical, contractual, managerial
and cultural barriers that have promoted adversarial relation-
ships and fragmented R&D efforts. Further, for such
recommendations to be realized, professionals and construc-
tion Ž rms would need to be motivated to embrace the
necessary changes in practices and attitudes. These changes
will create the environment in which the desired improve-
ments will be possible.
Research method
The C21 Report listed 39 recommendations that the con-
struction industry in Singapore should adopt. The research
has identiŽ ed probable implementation strategies to achieve
these recommendations. A questionnaire was designed to
Ž nd out the extent to which senior personnel in Singapore’s
construction industry would agree that the suggested imple-
mentation strategies had the potential to motivate and enable
Singapore’s construction industry to achieve world-class
status. As part of that bigger study, this paper focuses on
how the industry can achieve greater levels of integration and
increase its R&D effort. The research identiŽ ed 11 and 16
implementation strategies that might increase the level of
integration and R&D respectively. Respondents were asked
to rate each of the listed statements for its effectiveness
in motivating and/or enabling the construction industry
to achieve greater integration and increased R&D efforts.
A seven-point Likert scale was used, where 1 was ‘very
effective’, 4, ‘neutral’, and 7, ‘not effective at all’.
Sample proŽ le
The investigation identiŽ ed its target population to include
six population frames comprising the different parties in the
construction value chain. These were clients, consultants,
239
Dulaimi et al.
main contractors, specialist contractors, subcontractors and
suppliers. For the client population target, three groups of
clients were identiŽ ed: public sector clients, private sector
property developers and private sector corporate clients. For
the consultants, architects, structural engineers, mechanical
and electrical (M&E) engineers, and quantity surveyors were
identiŽ ed through the listings provided by their respective
institutes. Samples were selected randomly from the available
data sources.
The target populations for main contractors, specialist
contractors, subcontractors and suppliers were based on
companies registered with the Singapore’s Building and
Construction Authority (BCA) under the relevant workheads.
The BCA classiŽ es every registered contractor under one of
eight categories, G1–8, depending on its operational and
Ž nancial capabilities. G1 contractors can bid for projects of
no more than S$500 000 (US$1 = S$1.80). G8 contractors
are allowed to bid for projects of any size. The study
sampling effort identiŽ ed 1919 civil engineering and general
building contractors. Of these, questionnaires were sent to
200 randomly selected contractors in the G1–5 categories.
Another 154 questionnaires were sent to randomly selected
G6–8 general building and civil engineering contractors.
A total of 1597 specialist contractors who undertake piling,
air-conditioning, lift installation, plumbing and M&E
works were identiŽ ed. Of these, 50 questionnaires were sent
to randomly selected contractors in each group except for the
lift contractors; since the population of this group was small
(only 34), the questionnaires were sent to all of them. A total
of 2189 suppliers who supply precast concrete, building
materials, metal and timber components, sanitary products,
Ž nishing materials, and M&E products were identiŽ ed. Of
these, questionnaires were sent to 405 randomly selected
suppliers. For the subcontractors, 360 registered with the
Singapore List of Trade Subcontractors (SLOT) were identi-
Ž ed. A total of 200 randomly selected subcontractors
were sent questionnaires. The survey package comprised
a covering letter, the questionnaire and a prestamped
self-addressed envelope.
Pilot study
A two-phase pilot study was carried out to ensure the clarity
and relevance of the questionnaire. In the Ž rst phase,
the questionnaire was shown to Ž ve lecturers in the
National University of Singapore. Based on their feedback,
amendments were made to the questionnaire and the
second phase of the pilot study was conducted. A client,
building contractor, M&E subcontractor (representing
both specialist and trade subcontractors), supplier, and
an architect were shown the questionnaire. Based on the
feedback received, minor amendments were again made
to the questionnaire to remove any ambiguities and
discrepancies.
Four slightly different versions of questionnaires were
240
designed for (1) clients, (2) consultants, (3) contractors,
specialist contractors and subcontractors and (4) suppliers.
Industry workshop
The research team organized a workshop that was attended
by 21 senior professionals on 24 October 2000. The aim
was to provide further opportunity to examine closely and
further validate the survey Ž ndings. The workshop partici-
pants included contractors, clients, suppliers and consultants.
The participants were divided into four groups to discuss
the main survey Ž ndings on enablers and motivators, and
recommend important measures to enable the construction
industry to attain world-class status. The Ž ndings from the
workshop are reported during the analysis of the survey
results.
Survey results and data analysis
Response rate
The research team distributed 1815 questionnaires to com-
panies in different sections of Singapore’s construction
industry (Table 1). A total of 261 questionnaires were
returned within 1 month of sending out. Of these, 23 were
not substantially completed and were discarded. A further
38 questionnaires were returned because the companies had
changed their addresses. Data from the remaining 200 usable
returned questionnaires (response rate 11.22%) were
checked, edited, coded and analysed.
The response rate of 11.22% was low. The low level of return
may be a re ection of the low level of familiarity with the
C21 Report that was highlighted in the covering letter as
the focus of the study. Notwithstanding the low response
rate, the sample size for each group was large enough to be
considered representative of the population.
Designation of respondents
The designation of the respondents covered a wide range.
A total of 43, 36 and 11.5% of the respondents were
upper management, middle management and professionals
respectively. Upper management respondents comprised
managing directors, directors and partners. The middle
management respondents were project managers and
corporate-level managers. Professionals comprised architects,
engineers and quantity surveyors. The respondents were
quite senior, and this gave validity to the survey results.
Respondents’ business
The majority of the clients (40%) had undertaken medium-
sized projects that had contract sum of between S$10 million
and S$50 million in the last 5 years. Of the 48 consultants
who participated in the survey, 42% were architects, 15%
were civil and structural engineers, 21% were M&E
engineers, and 13% were quantity surveyors. Regarding the
size of the consultants’ organizations, the study recorded the
 Enhancing integration and innovation in construction

Table 1 Distribution of questionnaires and response rates

Respondent Sent out Returned Usable %

responses

Clients (public, private) 217 31 27 12.44

Consultant architects 100 21 20 20
Consultant engineers 200 20 20 10
Consultant QS 53 8 8 15
General building contractors 200 34 28 14
Civil engineering contractors 154 17 14 9
Specialist contractors 287 34 33 11
Suppliers 404 28 24 6
SLOTS subcontractors 200 29 26 13
Subtotal 1815

Companies who changed their addresses -38

Total 1782 222 200 11.22

median number of professionals and technical staff to be participants in general) likely response to the issues raised
Ž ve and 12 respectively. These Ž gures re ect the usual proŽ le in the questionnaire, based on the sample’s ratings (Tables 2
of consultancy Ž rms in Singapore. and 3).

There were 42 responses from general contractors. Of these,
G8 General Building contractors and G8 Civil Engineering
contractors comprised 26 and 17% respectively. The total
turnover reported by the general contractors was S$10.25
billion. Average turnover was S$262.7 million. Among the
33 specialist contractor respondents, the majority of the
respondents (29%) were undertaking piling works. Their
total turnover was S$1.4 billion, and the average turnover
was S$42 million. The 26 subcontractor respondents were
involved in general building (58%), civil engineering (7%),
plumbing (14%), mechanical (7%), electrical (7%) and air-
conditioning (7%) subcontract works. These respondents
were also registered under the SLOTS scheme. The total
turnover was S$459 million, the average turnover S$19
million. The 24 supplier respondents supplied products
such as precast concrete (10%), Ž nishing materials (19%),
building materials (47%), electrical components (10%),
metal and timber parts (5%), and mechanical components
(9%). Their total turnover was S$1.26 billion, the average
turnover S$52 million.
Statistical analysis
Detailed statistical analysis was conducted using the
Statistical Package for Social Sciences (SPSS) software
package. In addition to calculating the overall mean for the
whole sample, the mean ratings were also calculated for
the six different categories of respondents, i.e. clients,
consultants, general contractors, specialist contractors,
subcontractors and suppliers. This allowed the research to
examine whether different construction industry participants
had different views about the implementation strategies
presented. Statistical t-tests of the mean were carried out
to check the entire population’s (construction industry
The null hypothesis H o: m = mo and the alternative hypothesis
H1: m < mo were set out, where m is the population mean and
mo is the critical rating above which the implementation
strategy was considered disagreeable or ineffective. Here, mo
was Ž xed at 4 because by the deŽ nitions given in the rating
scale, ratings >4 represented ‘disagree’ or ‘not effective’.
From the table of critical values of t-distribution, for degrees
of freedom (d.f.) = 199 (200 – 1), and the level of signiŽ cance
for one-tailed test at 0.05, t = –1.645. This meant that if
the calculated t was <-1.645, the null hypothesis for that
issue was rejected and the alternative hypothesis accepted. It
was then concluded that the issue was agreed upon by the
respondents to be effective.
The research performed two analyses of variance (ANOVA)
to test the equality of different population means. The
test was undertaken to identify whether the different
enablers and motivators identiŽ ed by the different groups
of respondents were similar.
First, the mean ratings of the six categories of respondents
were compared. The null hypothesis, H0, stated that the six
population means were equal, and the alternative hypothesis,
H1, was that the means were not equal. Using the SPSS, the
F-ratios were calculated. The signiŽ cance level for the study
was set at 0.05, following the conventional risk level (Cohen,
1992). If the signiŽ cance level was >0.05, it meant that the
null hypothesis of equality of the population means was
accepted, and that it could be concluded that populations
had rated in a similar manner.
The second ANOVA was to test whether the population mean
ratings of Ž ve categories of respondents (with the client
respondents excluded) were similar. This would allow the

241
Dulaimi et al.

Table 2 Mean rating, t-test and ANOVA for `Integration’

Rank Implementation strategies for greater integration Mean ANOVA1 (all ANOVA2 (clients
rating t-test groups) excluded)

t p F p F p

1 Contractors, subcontractors and suppliers to adopt 2.59 -20.78 0.00 0.92 0.47 1.01 0.41
construction management systems that are com-
patible to ensure the smooth running of projects
2 Earlier involvement of specialist contractors in 2.51 -20.13 0.00 1.67 0.14 1.91 0.11
projects
3 Clients to play a more active role during the design 2.70 -16.97 0.00 0.73 0.61 0.88 0.48
and construction stages
4 A cultural change within the industry promoting a 2.61 -16.65 0.00 0.74 0.60 0.75 0.56
win± win attitude in construction contracts
5 Greater recognition of the role of specialist 2.71 -15.84 0.00 0.58 0.71 0.37 0.83
contractors
6 Risks and responsibilities as well as bene® ts of 2.93 -15.42 0.00 1.61 0.16 1.74 0.14
greater integration to be made clear to all organiza-
tion involved in construction projects
7 Ensuring that IT applications and systems adopted 2.93 -13.49 0.00 0.94 0.46 1.11 0.36
by the different organizations on a project are
compatible
8 Develop a robust plan to introduce IT across the 3.13 -9.59 0.00 1.62 0.16 1.76 0.14
company
9 Adoption of Design and Build procurement method 3.13 -9.01 0.00 2.93 0.01 3.43 0.01
by clients
10 Enabling contractors and consultants to expand to 3.05 -8.82 0.00 1.73 0.13 1.90 0.11
provide a `one-stop-service’ to clients by becoming
a multidisciplinary ® rm, i.e. offering architecture,
engineering and construction services
11 Adopting e-commerce and other electronic systems 3.32 -8.07 0.00 1.28 0.27 1.33 0.26
for exchange of information and ordering material/
service across the supply chain

examination of the industry’s views without that of its
customers whose main business may not be directly related
to construction. Null and alternative hypotheses were also
set out.
Factor analysis is motivated by the fact that measured
variables can sometimes be correlated in such a way that
their correlation may be reconstructed by a smaller set of
parameters that could represent the underlying structure in
a concise and interpretable form (Basilevsky, 1994). The
27 enablers were input into the SPSS software and factor
analysis carried out to ascertain if there was any further
relationship among the many proposed implementation
strategies to help the construction industry achieve the
improvements highlighted by the C21 Report. Appendix 1
provides the results of the factor analysis under the nine
areas. The tables in Appendix 1 show the factor loadings,
commonalities and eigenvalues for the extracted factors. The
factor loadings are the correlation coefŽ cient between an
original variable (the statements) and an extracted factor.
Commonality (h2) is a measure of variance in the variables
that have been accounted for factor analysis. The eigenvalue
is a measure of how standard variables contribute to the
principal component (Dallas, 1998).
Results and discussion
Integration
The t-test results showed that all 11 proposed measures to
motivate the company to achieve greater integration across
the construction value chain were effective (Table 2). The
factor analysis uncovered that there was a single factor that
explained the ratings given by the respondents on integration
(Appendix 1). This is labelled as:
Enabler 1: Promoting and enabling greater integration
across the value chain.
Respondents indicated the need, at the macro level, for the
risks and responsibilities, as well as beneŽ ts, of greater inte-
gration to be made clear to all organizations involved in
construction projects. There must be a cultural change to
promote a win–win attitude in construction contracts. In this
respect, the full potential of partnering should be explored.

242
 Enhancing integration and innovation in construction

Table 3 Mean rating, t-test and ANOVA for R&D

Rank Implementation strategies to increase R&D effort Mean ANOVA1 (all ANOVA2 (clients
rating t-test groups) excluded)

t p F p F p

1 Increase tax incentives for companies which invest 2.33 -21.07 0.00 1.22 0.30 1.44 0.22
in new construction technologies and management
systems
2 Establish a government-sponsored body to lead and 2.49 -17.08 0.00 1.50 0.19 1.44 0.22
coordinate the industry’s R&D effort
3 Assigning a government-sponsored body to share 2.57 -16.93 0.00 1.70 0.14 1.86 0.12
the risks of innovation
4 Your company to establish a reward system to rec- 2.74 -16.07 0.00 0.63 0.68 0.6 0.66
ognize innovators and promote innovation
5 Companies and professional bodies to establish 2.81 -15.13 0.00 2.00 0.08 2.32 0.06
closer links with research groups at universities to
tap into leading edge technologies and knowledge
6 Increased cooperation among organizations 2.88 -14.52 0.00 1.56 0.17 1.98 0.10
involved in construction to coordinate innovation
effort within a particular project
7 Your company to require staff to use the latest IT 2.96 -13.92 0.00 0.68 0.64 0.76 0.55
applications to replace traditional methods of
working
8 Providing suf® cient tendering period to allow ten- 2.81 -11.94 0.00 0.85 0.52 0.24 0.92
derers and consultants to develop new ideas
9 Establish `innovation’ networks for companies to 3.08 -10.93 0.00 1.14 0.34 1.36 0.25
share non-sensitive technological advances and
new ideas
10 Your company to create a `no-blame’ culture to 3.16 -9.50 0.00 1.47 0.20 1.81 0.13
encourage staff to experiment with new ideas
11 Your company to pay for staff to attend national and 3.16 -9.32 0.00 0.22 0.96 0.09 0.99
international seminars, conferences and training
courses
12 Establish an industry-sponsored body to share the 3.27 -8.40 0.00 4.37 0.00 5.04 0.00
risks of innovation
13 Procure more contracts based on Design and Build 3.27 -7.03 0.00 5.09 0.00 6.12 0.00
method
14 Professional bodies to set up their own R&D units to 3.36 -6.90 0.00 1.07 0.38 1.17 0.33
lead the development within each profession
15 Your company to give staff a `slack’ in their workload 3.44 -6.20 0.00 1.21 0.31 1.44 0.22
to give them an opportunity to develop and experi-
ment with new ideas
16 Introduce a levy on all contracts to fund a central 3.82 -1.66 0.10 3.19 0.01 3.84 0.01
construction R&D organization

Demonstrating how the change of the supply chain mindset
can achieve improvements the Gaffney, Cline and Associate
(GCA) project is a good example. The contractor on this
project, in the UK, described how a trustful and transparent
relationship was established with the Ž rm’s supply chain.
On this project the contractor negotiated and ‘ring-fenced’
margins with the different members of the supply chain,
unleashing their specialist knowledge to develop time
and cost-saving innovations. This allowed them to improve
performance rather than protect their risk, creating a true
win–win situation. The beneŽ ts included 20% reduction
in cost, nearly 20% reduction in time, defect free at hand-
over and the client was more willing to commission some
members of the supply chain for more work (M4I, 2001).
Respondents also felt that clients and specialist contractors
should play greater roles in the development process of the
construction project. Specialist contractors should be
involved early and given greater recognition of the roles that
they can play.
The adoption of the D&B procurement method by clients

243
Dulaimi et al.
would be effective in achieving greater integration. Con-
tractors and consultants should expand to provide a ‘one-
stop service’ to clients by becoming multidisciplinary Ž rms.
Integration would be more successful if there was compati-
bility of management and information systems. Contractors,
subcontractors and suppliers should adopt construction
management systems that are compatible to ensure smooth
running of projects. In addition, e-commerce and other
electronic systems for exchange of information and ordering
materials/ services across the supply chain should be adopted
to enhance integration.
When comparing the responses among the six groups of
respondents, the ANOVA revealed that only one issue was
not rated in the same manner, i.e. ‘the adoption of D&B
method by clients’ (F = 2.93, p = 0.01). Compared with other
respondents, consultants, again, gave D&B the lowest rating.
This may be because the D&B procurement method was per-
ceived to give the contractor the leadership role traditionally
held by consultants. At the same time, contractors gave this
issue the highest score among the different population
groups. This may be a signal from contractors that they
can do a better job in achieving this integration when they
assume leadership of the D&B project.
The workshop participants unanimously agreed that it was
important that there was integration across the construction
value chain. Participants felt that integration needs to occur
at multiple levels. At the design level, consultants need to
be integrated and work together to achieve the project
objectives. At the construction level, the contractor needs to
integrate his subcontractors and suppliers. Care should be
taken with regard to interfacing of work, and protecting
and safeguarding work to avoid damage by subsequent
subcontractors. Participants from the public sector felt that
integration was best effected through D&B procurement
system. However, the client would need to have a strong
project management team to manage and supervise the
D&B contractor’s design and construction activities. Second,
clear client’s requirements need to be prepared for bidding
purposes. Participants from the private sector felt that it
was difŽ cult to write a project brief in great detail to com-
municate the clients’ requirements to the D&B bidders.
Therefore, they were more likely to use one of the hybrids
of D&B (such as develop and construct) to achieve their
project objectives. Third, to reap the beneŽ ts of D&B, the
contractors should be allowed to be the single point of
responsibility in a true sense. This means that clients should
avoid nominating suppliers and subcontractors to work
under the D&B contractor.
Enhancing innovation and R&D effort
The t-test of the mean showed that all 16 measures indicated
in the questionnaire to motivate the company to increase its
R&D effort were effective (Table 3). Additional points were
raised at the industry workshop (see below). The outcome of
the factor analysis revealed Ž ve factors (Appendix 1):
244
Enabler 2: Increase government’s role in R&D.
Enabler 3: Companies to give greater emphasis to cre-
ativity and innovation.
Enabler 4: Developing a culture of innovation.
Enabler 5: Coordinated R&D effort for the whole
industry.
Enabler 6: Changing procurement methods to improve
R&D effort.
The government plays an important role in motivating
companies to invest in R&D. Respondents felt the govern-
ment should increase tax incentives for companies that
invested in new construction technologies and management
systems (this was also rated as the most effective method)
(Table 3). There was support for the C21 recommendation
to set up a government-sponsored body to lead and co-
ordinate the industry’s R&D effort and to share its risks of
innovation.
A key Ž nding was that the respondents noted that companies
should give greater emphasis to creativity and innovation
by providing more measures to help staff undertake
R&D. Respondents felt that companies should make
resources available for staff to attend national and inter-
national seminars and conferences, and training courses
continuously to update their skills and knowledge. Com-
panies should also establish a reward system to recognize
innovators and promote innovation. Staff should be required
to use the latest IT application to replace traditional
methods of working.
While companies put in place beneŽ ts for staff to embark on
R&D, mindsets should also be changed and a culture for
innovation be adopted. Respondents felt that companies
should create a ‘no-blame’ culture and give staff a ‘slack’ in
their workload to encourage them to develop and experiment
with new ideas.
The industry also had a role to play to increase R&D efforts.
Respondents agreed with the introduction of a levy on all
contracts to fund a central construction R&D organization.
This industry-sponsored body could coordinate the indus-
try’s R&D effort and share the risks of innovation. This
body could host ‘innovation’ networks for companies to
share non-sensitive technological advances and new ideas. In
the UK a similar effort was launched in 1999 in response to
calls for the construction industry to be more innovative
(Egan, 1998). The Movement for Innovation (M4I) was
initiated with the aim of facilitating the dissemination of
best practices and innovation. A similar effort has initiated
a Network of Construction Creativity Clubs (NCCC). The
NCCC offers an opportunity to innovators to communicate
their knowledge directly by presenting them at events
(Dimirijevic et al., 2001).
Besides an industry-wide body, respondents felt that pro-
fessional bodies should set up their own R&D units to lead
the development within each profession. These professional
bodies and the companies should also establish closer

links with university research groups to tap leading edge
technologies and knowledge.
Finally, R&D efforts can be improved at the procurement
stage. Respondents felt that procuring more contracts based
on the D&B method would be effective at increasing R&D
efforts. In addition, respondents wanted clients and con-
sultants to allow more time for tendering, so that new ideas
could be developed before the construction contract was
signed. Project team members should work closely together
so that innovation effort within a particular project could be
coordinated. All the above would help in creating an
environment conducive to innovation.
To demonstrate the impact of procurement on innovation
effort, Miller (1997) presented case studies from the USA,
Hong Kong and Canada. He found that most procurement
strategies encouraged innovation. The key was that procure-
ment strategies needed to be structured to produce com-
petition that focused on the desired improvements. On a
highway project in Toronto, Ontario, a Design, Build and
Operate (DBO) procurement method was used. Contractors
were given the role of ‘system integrators’. Here, contractors
tendering for a DBO contract presented alternative for-
mulations of the project for the client functional needs. The
client then made a commitment based on the formula that
best delivered the desired combination of quality, time and
life-cycle cost.
Participants in the industry workshop agreed that there was a
need for the government to fund and support the industry in
funding R&D effort. However, at the same time, they argued
that if an ‘inventor’ was conŽ dent of the new product, then
the inventor should take on the risk.
When comparing the responses among the six groups of
respondents, the ANOVA revealed that three issues were not
rated in the same manner. The Ž rst issue was ‘introduce a
levy on all contracts to fund a central construction R&D
organization’ (F = 3.19, p = 0.01). The second issue not rated
in the same manner by different groups of respondents was
‘establish an industry-sponsored body to share the risks of
innovation’ (F = 4.37, p = 0.00).
In both issues, specialist contractors and suppliers felt that
these would not be very effective in motivating R&D. This
may be because technology is a critical factor that deter-
mines competitiveness in this sector of the industry and this
dictates that R&D needs to be carried out by individual
Ž rms to improve their specialist services or products, instead
of relying on a central construction R&D organization or an
industry-sponsored body.
Regarding the levy suggestion, there will always be the worry
that main contractors will pass the extra cost down the value
chain. This would put pressure on specialist contractors and
suppliers to reduce their cost to remain price competitive.
Any attempt by contractors to pass the extra cost up the
Enhancing integration and innovation in construction
value chain, i.e. to the client, may be subdued by competitive
pressures.
On the third issue concerning ‘procure more contracts based
on D&B’ (F = 5.09, p = 0.00), consultants felt that this
would not be effective in motivating R&D. Owing to the
single-point responsibility resting on the D&B contractor,
consultants needed to relinquish their leadership of the
construction process. Hence, their ability to innovate and the
ability of the new leader (the D&B contractors) to be more
innovative and promote R&D will be in doubt.
Conclusion
National reviews of the construction industry, such as the
C21 Report, aim to create the momentum for change that
would lead to signiŽ cant improvements in the performance
of the industry. The fundamental problems of Singapore’s
construction industry identiŽ ed by the C21 study such as low
productivity and fragmentation are shared by construction
industries in several other countries. This research has shown
clear support for the C21 Report’s recommendations on the
need to have an integrated approach to construction, and to
raise the level of construction R&D.
Research has shown examples of new ideas that have been
introduced to deal with the problems of fragmentation and
low levels of innovation. The adoption of new procurement
methods (Dissanayake and Kumaraswamy, 1999; Bresnen and
Marshall, 2000) and new organizational structures (Nicolini
et al., 2001) are seen to improve the ability of the industry to
provide more integrated and innovative solutions to customer
needs and expectations.
The Ž ndings of this research indicate the need for new ways
of thinking in Singapore’s construction industry. To improve
the level of integration, the industry seeks to embrace
strategies that would create a more harmonious business
environment. Here the different parties and professionals
would be required and allowed to make timely contributions
to the decision-making process throughout the construction
development process. Such an environment would require
a cultural change promoting win–win business relation-
ships. In addition, strategies to develop IT tools such as
e-procurement and systems need to support this new
organizational set-up by allowing smooth and effective
information and knowledge sharing.
The concern is that the construction industry in Singapore is
still looking to government to provide leadership and funding
to spearhead changes and improvements. The research has
shown the industry giving higher support to government-led
strategies to enhance the R&D effort. The government
and other public institutions being the industry’s biggest
customer can play a key role in facilitating and creating the
business environment conducive for such improvements.
However, it is doubtful whether construction Ž rms will
achieve these improvements without a fundamental shift of
245
Dulaimi et al.
attitudes. Research has shown evidence of the ineffectiveness
of public policy instruments in supporting innovation in
construction (Seaden and Manseau, 2001).
Architectural, engineering and construction Ž rms will have
to participate in an industry-wide effort to coordinate
and share the beneŽ ts and risks of R&D effort. In addition,
further cooperation within the supply chain is needed to
remove any legal and organizational hindrance and enable
greater innovation on construction projects.
However, such an effort must be aligned with the needs and
expectations of the stakeholders, as related to the Ž rm and
the industry as a whole. Greater integration and enhanced
R&D would require a signiŽ cant shift in attitudes to
encourage cooperation. Such a shift should be based in
recognition that the ability of a Ž rm to develop superior
products and services is signiŽ cantly in uenced by the level
of cooperation across the supply chain and between
professionals.
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 Enhancing integration and innovation in construction

Appendix 1: Details of the factor analysis

Issues that would enable/ motivate a company to achieve greater h2 Factor Enablers (Eigenvalue)
integration loading

A cultural change within the industry promoting a win± win attitude in 1 0.717 Promoting and enabling greater
construction contracts integration across the value
The adoption of Design and Build procurement method by clients 1 0.611 chain
Ensuring that IT applications and systems adopted by the different 1 0.734
organizations on a project are compatible
Develop a robust plan to introduce IT across the company 1 0.756
Contractors, subcontractors and suppliers to adopt construction manage- 1 0.580
ment systems that are compatible to ensure the smooth running of projects
Clients to play a more active role during the design and construction stages 1 0.837
Earlier involvement of specialist contractors on projects 1 0.642
Adopting e-commerce and other electronic systems for exchange of 1 0.793
information and ordering material/service across the supply chain
Risks and responsibilities as well as bene® ts of greater integration to be 1 0.768
made clear to all organizations involved in construction projects
Greater recognition of the role of specialist contractors 1 0.696
Enabling contractors and consultants to expand to provide a `one-stop- 1 0.717
service’ to clients by becoming a multidisciplinary ® rm, i.e. offering
architecture, engineering and construction services

Issues that would enable/motivate a company to increase its research

and development

Increase tax incentives for companies that invest in new construction 0.76 0.812 Increase government’s role in
technologies and management systems R&D (6.46)
Assigning a government-sponsored body to share the risks of new 0.77 0.81
innovation
Establish a government-sponsored body to lead and coordinate the 0.80 0.786
industry’s R&D effort
Companies and professional bodies to establish closer links with research 0.65 0.635
groups at universities to tap into leading-edge technologies and knowledge
Your company to pay for staff to attend national and international seminars, 0.84 0.882 Companies to give greater
conference and training courses emphasis to creativity and
Your company to require staff to use the latest IT application to replace 0.73 0.755 innovation (1.46)
traditional methods of working
Your company to establish a reward system to recognize innovators and to 0.66 0.564
promote innovation
Your company to create a `no-blame’ culture to encourage staff to experi- 0.63 0.754 Developing a culture of
ment with new ideas innovation (1.23)
Establish `innovation’ networks for companies to share non-sensitive 0.51 0.594
technological advances and new ideas
Your company to give staff a `slack’ in their workload to give them an 0.74 0.529
opportunity to develop and experiment with new ideas
Introduce a levy on all contracts to fund a central construction R&D 0.75 0.828 Coordinated R&D effort for the
organization whole industry (1.15)
Professional bodies to set-up their own R&D units to lead the development 0.69 0.654
within each profession
Establish an industry-sponsored body to share the risks of new innovation 0.70 0.641
Providing suf® cient tendering period to allow tenderers and consultants to 0.78 0.787 Changing procurement methods
develop new ideas to enhance R&D effort (1.01)
Procure more contracts based on Design and Build method 0.72 0.753
Increased cooperation among organizations involved in construction to 0.59 0.291
coordinate innovation effort within a particular project

247