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Innovation in Private Infrastructure Development Effects of the Selection Environment and Modularity

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  • Nuno Gil
  • Marcela Miozzo
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    Abstract

    This study investigates how the selection environment and modularity affect innovation in private infrastructure development. Our findings stem from an in-depth empirical study of the extent ten process innovations were implemented in an airport expansion programme. Our findings suggest that developer and customers can each occasionally champion or resist innovations. An innovation succeeds contingent upon the capability of the stakeholder groups to develop collectively a plan to finance and implement the innovation, which reconciles subjective individual assessments. Innovations can be particularly hard to adopt when they require financing from different budgets, or when the developer’s investment pays off only if customers behave in a specified way in the future. We also find that the degrees of novelty and modularity neither represent sufficient or necessary conditions enabling or hindering innovation. Novelty, however, makes the innovation champion’s job harder because it leads to perceptions of downside risk and regulatory changes, whereas modularity helps the champion operationalise ways that moderate resistance to innovate.

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    File URL: http://www3.druid.dk/wp/20070023.pdf
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    Bibliographic Info

    Paper provided by DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies in its series DRUID Working Papers with number 07-23.

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    Date of creation: 2007
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    Handle: RePEc:aal:abbswp:07-23

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    Web page: http://www.druid.dk/

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    Keywords: Innovation; financing; implementation;

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    1. Rod Coombs & Mark Harvey & Bruce S. Tether, 2003. "Analysing distributed processes of provision and innovation," Industrial and Corporate Change, Oxford University Press, vol. 12(6), pages 1125-1155, December.
    2. Ulrich, Karl, 1995. "The role of product architecture in the manufacturing firm," Research Policy, Elsevier, Elsevier, vol. 24(3), pages 419-440, May.
    3. Nelson, Richard R., 2003. "On the uneven evolution of human know-how," Research Policy, Elsevier, Elsevier, vol. 32(6), pages 909-922, June.
    4. Andrew Davies, 2004. "Moving base into high-value integrated solutions: a value stream approach," Industrial and Corporate Change, Oxford University Press, vol. 13(5), pages 727-756, October.
    5. Watson, Jim, 2004. "Selection environments, flexibility and the success of the gas turbine," Research Policy, Elsevier, Elsevier, vol. 33(8), pages 1065-1080, October.
    6. Sendil K. Ethiraj & Daniel Levinthal, 2004. "Modularity and Innovation in Complex Systems," Management Science, INFORMS, INFORMS, vol. 50(2), pages 159-173, February.
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