Innovation Best Practice: Cross sector adoption

The term innovation is widely used, and often abused, yet as a concept is somewhat elusive in its exact definition, and this is especially so when viewed across different sectors, yet all organisations require it to compete and survive.

There is extensive literature classifying the many definitions of innovation all demonstrating that simplistic definitions are inadequate, so can we capture the innovation process and compare sectors fairly in terms of successes and failures and assist sectors to learn from each other to accelerate innovation?

How sectors approach and adopt innovation is very dependent on the surrounding eco-system and stress factors such as:

• Type of innovation: products, process, service or marketing innovations
• Pace of technological change: some sectors see rapid and radical innovations and others by incremental development
• Embedded practices (culture): many sectors have firmly established ways of operating, and deviation from these are perceived as high risk
• Competition landscape: leads to increased innovation funding with equally matched companies yet has a negative effect when companies perceive themselves to be lagging in sectors with short time horizons
• Economic and social conditions: research has demonstrated the importance of increasing living and education standards for improving national innovation growth alongside stable legal (especially IP) systems. Key economic factors around favourable tax schemes for R&D and investment are obvious positive factors
• Regulatory regimes/environments: these can be essential drivers in specific sectors, and IPR can significantly impact some sectors

Two sectors that appear to vary considerably in their adoption and use of innovations are construction and aerospace (accounting for 6% and 4% respectively) of global GDP, making both important drivers of global industrialisation. One noticeable difference between these two is the nature of their outputs. Within large scale construction such as infrastructure, we see large one-time projects, often from a consortium of suppliers, with a heavy reliance on often fragmented and fluid supply chains within a dictated time constraint and a regulatory environment that is location dependent. All these factors are not ideal for the evaluation of innovation, and evidence has shown that it has lagged other engineering-based sectors. Aerospace projects, meanwhile, are mostly long-term, allowing a greater degree of innovation experimentation and, importantly, evaluation, reducing innovation failure rate; and they have a few large suppliers and an established global supply chain, plus of course one of the most heavily regulated markets in the world, focused on safety and reliability.

Due to these constraints on the two sectors, we tend to see incremental innovation across the construction sector, and a greater focus on process innovations that appear to be distinctly unrevolutionary in their impact. The contrast to aerospace seems extreme, with examples of dramatic step changes in innovation such as the introduction by Boeing of the 747, and many have drawn unfavourable comparisons to the construction sector, pointing out its mediocre track record, inadequate collaboration, and its problematic adoption of new technologies.

In its defence, the construction sector explains these problems are due to their client’s reluctance to accept new technologies, due to high-risk aversion. Possibly the most important innovation in construction has been the development and adoption from 2010 onwards of BIM (Building Information Modelling) software; this enables 3D modelling of buildings, allowing more efficient construction processes by understanding potential fabrication issues before construction. BIM software has enabled better collaboration and overall enhanced communication reducing misunderstandings, which were a common problem in construction projects.

Around 70% of all UK projects now use BIM (Statista 2020), and companies must be BIM certified to win UK government projects, as is the case in the USA. The impact is that this new technology, which is open-sourced software allowing multiple suppliers, will increase construction efficiency exponentially. The success of Innovate UK KTN’s i3P programme shows that by collaborating, the major primes can obtain faster answers to many of their major issues, by collectively working with the supply chain. Yet the perception by those not in the sector will most likely be that innovation is minimal when compared to the launch of say a new airline model, which gains wider public exposure.

Although there have been encouraging innovation developments in the construction sector such as BIM and off-site manufacturing, which are dramatically improving process efficiency, this is not to say that the industry is moving as fast as it should. For instance, Volkswagen alone invested more than $13 billion in R&D in 2019 – equivalent to the combined amount invested by the 25 largest construction and building materials players, according to the 2019 EU Industrial R&D Investment Scoreboard. For too long, the sector has relied on its supply chain to create incremental innovation, and has suffered from a lower level of technical expertise within its workforce.

In contrast, the aerospace sector allows for greater autonomy of its workforce due to its perceived expertise; this allows for more emphasis around multidisciplinary group working, accelerating idea formation and hence innovation. Although not uncommon, this approach is missing in the construction sector due to the generic factors identified, such as embedded practices, an educated workforce, a large pool of competition, and the main innovation focus on processes.

In conclusion, we must view innovation between these two sectors considering their current environmental conditions and the historical influences within their respective development. We should also see that innovation can range from the radical to the more perceived mundane incremental. Aerospace considers the longer evaluated radical option the most important and is allowed by the factors governing it, not least the regulatory side. Construction, on the other hand, tends to prefer incremental innovation and continuous improvement. This has led to the perception that specific sectors are more innovative even if process improvements, such as BIM in construction, are equally revolutionary in their impact, even if they are less tangible.

Thus, it appears that there will always be a disparity between these sectors in terms of perceived innovation. Still, deeper examination explains both the difference and the parameters/variables as they continue to innovate within sector-specific constraints.

There are opportunities, especially for the construction sector, to adopt some of the innovation methodologies from sectors such as aerospace, certainly around digital applications in project management and rapid prototyping; the sector can also look outside the its common ecosystem across boundaries, using methodologies such as the Innovate UK KTN iX process, which allows organisations to set open technical challenges to solution providers outside of their normal connections and networks. Still, we need to be aware of the nuance and constraints on differing sectors before thinking that such transfer of knowledge is straightforward.

The task for those working at the intersection of sectors is to facilitate cross-fertilisation as the process to overcome sectoral boundaries, to accelerate innovation and hence economic growth, yet be aware of the origins of sectors and the constraints under which they operate.

Explore what Innovate UK KTN can offer

Innovate UK KTN’s purpose is to connect innovators for positive change. As well as speaking to individual businesses and making connections for them, we have developed several tried and tested models for open innovation:

Innovation Exchange (iX)

Innovation Exchange is a programme specially designed to help organisations search for game-changing solutions from cross sectors to challenges and bring them to market faster.

Innovation Networks

Through our Innovation Network programme, we’ve united some of the best minds and greatest thinkers from across the UK in cross-sector areas of innovation, development and new technologies.

Knowledge Transfer Partnerships (KTPs)

Knowledge Transfer Partnerships (KTPs) are designed to build long-lasting and mutually beneficial collaborations between business and the UK’s world-class research base.

I3P

Established in 2016, the Infrastructure Industry Innovation Partnership (i3P) is a community of client and supply chain organisations that have made a commitment to delivering collaborative innovation through projects supported by a large network of experts and innovators and world leading industry knowledge that will drive the future transformation of the infrastructure and construction industry.