Effect of Innovation on Productivity in the Construction Industry: A Literature Review: Fid-Bau Portal

Effect of Innovation on Productivity in the Construction Industry: A Literature Review

Laszig, Leif / Bahr, Matthias / Gad, Ghada M. / Lomiento, Giuseppe

The construction industry is characterized worldwide by a significant productivity slowdown, which is attributed to factors such as low capital investments, transition from mass production to customer-tailored products, labor market reforms, regulation, and fragmentation. Despite the proven ability of new technologies to improve productivity, construction lags significantly compared to other sectors in its use of innovative tools, and is slow to adopt new materials, methods, and technologies. Significant advances that are being deployed or prototyped today can transform the effectiveness and efficiency of the construction industry in several areas of innovation (advanced construction materials, digital technologies, automation, and services). The aim of this paper is to investigate the research that has been conducted to date on the effect of innovation on productivity, identify knowledge gaps, and suggest recommendations for future research relevant to construction. This will be achieved through a literature review, across various economic sectors, not limited to construction. Six main lines of research were identified: (1) research and development (R&D) and productivity, (2) diffusion of innovation and productivity, (3) potential advances in digital technologies and productivity, (4) workforce qualification and productivity, (5) structural change and productivity, and (6) measurement challenges and productivity. The reccomendations for future research is to develop a framework—pertinent to the construction industry—to aid decisionmakers in determining how innovation could be employed to increase project productivity, given company-related and environmental factors.