The innovation potential of new infrastructure development: An empirical study of Heathrow airport's T5 project
We propose a conceptual framework to analyze technology adoption in mega infrastructure projects, and assess their potential to innovating large socio-technical systems. Drawing on an in-depth empirical analysis of Heathrow airport's Terminal 5 project, we find that innovation hinges on technology adoption decisions that are governed systematically by two intertwined determinants – assessment of expected profitability and development of absorptive capacity, both of which are distributed across various interdependent actors. On an ad hoc basis, technological decisions are also affected by other factors, namely attitudes toward risk, politics, and (lack of) established standards. We reveal how a schedule-driven project framing creates an underlying boundary condition that constrains the longitudinal process of building a ‘whole collective’ with capacity to absorb new technologies. The innovation potential of mega projects is thus subjected to a fundamental, unifying tension: on the one hand, they offer a one-off opportunity to invest in cutting-edge technologies and innovate socio-technical systems; on the other hand, project stakeholders have limited time to develop capacity to absorb novel technologies and negotiate differences on assessments of profitability and risk. Stakeholders may therefore be compelled to agree to adopt proven technologies upfront to reduce uncertainty and mitigate risks, thus limiting the innovation potential of new infrastructure development.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hobday, Mike, 2000. "The project-based organisation: an ideal form for managing complex products and systems?," Research Policy, Elsevier, vol. 29(7-8), pages 871-893, August.
- Islas, Jorge, 1997. "Getting round the lock-in in electricity generating systems: the example of the gas turbine," Research Policy, Elsevier, vol. 26(1), pages 49-66, March.
- Robert G. Fichman & Chris F. Kemerer, 1997. "The Assimilation of Software Process Innovations: An Organizational Learning Perspective," Management Science, INFORMS, vol. 43(10), pages 1345-1363, October.
- Gil, Nuno & Tether, Bruce S., 2011. "Project risk management and design flexibility: Analysing a case and conditions of complementarity," Research Policy, Elsevier, vol. 40(3), pages 415-428, April.
- Massoud Karshenas & Paul L. Stoneman, 1993.
"Rank, Stock, Order, and Epidemic Effects in the Diffusion of New Process Technologies: An Empirical Model,"
RAND Journal of Economics,
The RAND Corporation, vol. 24(4), pages 503-528, Winter.
- Karshenas, Massoud & Stoneman, Paul, 1990. "Rank, Stock, Order And Epidemic Effects In The Diffusion Of New Process Technologies : An Empirical Model," The Warwick Economics Research Paper Series (TWERPS) 358, University of Warwick, Department of Economics.
- Geroski, Paul A, 1999.
"Models of Technology Diffusion,"
CEPR Discussion Papers
2146, C.E.P.R. Discussion Papers.
- Robertson, Paul & Smith, Keith & von Tunzelmann, Nick, 2009. "Innovation in low- and medium-technology industries," Research Policy, Elsevier, vol. 38(3), pages 441-446, April.
- Miozzo, Marcela & Dewick, Paul, 2002. "Building competitive advantage: innovation and corporate governance in European construction," Research Policy, Elsevier, vol. 31(6), pages 989-1008, August.
- David, Paul A, 1985. "Clio and the Economics of QWERTY," American Economic Review, American Economic Association, vol. 75(2), pages 332-37, May.
- Mowery, David C. & Langlois, Richard N., 1996. "Spinning off and spinning on(?): the federal government role in the development of the US computer software industry," Research Policy, Elsevier, vol. 25(6), pages 947-966, September.
- Arthur, W Brian, 1989. "Competing Technologies, Increasing Returns, and Lock-In by Historical Events," Economic Journal, Royal Economic Society, vol. 99(394), pages 116-31, March.
- Hobday, Mike, 1998. "Product complexity, innovation and industrial organisation," Research Policy, Elsevier, vol. 26(6), pages 689-710, February.
- Glynn, Steven, 2002. "Constructing a selection environment: competing expectations for CFC alternatives," Research Policy, Elsevier, vol. 31(6), pages 935-946, August.
- Gann, David M. & Salter, Ammon J., 2000. "Innovation in project-based, service-enhanced firms: the construction of complex products and systems," Research Policy, Elsevier, vol. 29(7-8), pages 955-972, August.
- Gomez, Jaime & Vargas, Pilar, 2009. "The effect of financial constraints, absorptive capacity and complementarities on the adoption of multiple process technologies," Research Policy, Elsevier, vol. 38(1), pages 106-119, February.
- Michael L. Katz & Carl Shapiro, 1994. "Systems Competition and Network Effects," Journal of Economic Perspectives, American Economic Association, vol. 8(2), pages 93-115, Spring.
- Davies, Andrew, 1996. "Innovation in Large Technical Systems: The Case of Telecommunications," Industrial and Corporate Change, Oxford University Press, vol. 5(4), pages 1143-80.
- Dvir, Dov & Lechler, Thomas, 2004. "Plans are nothing, changing plans is everything: the impact of changes on project success," Research Policy, Elsevier, vol. 33(1), pages 1-15, January.
- Dosi, Giovanni, 1993.
"Technological paradigms and technological trajectories : A suggested interpretation of the determinants and directions of technical change,"
Elsevier, vol. 22(2), pages 102-103, April.
- Dosi, Giovanni, 1982. "Technological paradigms and technological trajectories : A suggested interpretation of the determinants and directions of technical change," Research Policy, Elsevier, vol. 11(3), pages 147-162, June.
- Peine, Alexander, 2008. "Technological paradigms and complex technical systems--The case of Smart Homes," Research Policy, Elsevier, vol. 37(3), pages 508-529, April.
- Antonelli, Cristiano, 1989. "The role of technological expectations in a mixed model of international diffusion of process innovations: The case of open-end spinning rotors," Research Policy, Elsevier, vol. 18(5), pages 273-288, October.
- Hollenstein, Heinz, 2004. "Determinants of the adoption of Information and Communication Technologies (ICT): An empirical analysis based on firm-level data for the Swiss business sector," Structural Change and Economic Dynamics, Elsevier, vol. 15(3), pages 315-342, September.
- Drew Fudenberg & Jean Tirole, 1985. "Preemption and Rent Equalization in the Adoption of New Technology," Review of Economic Studies, Oxford University Press, vol. 52(3), pages 383-401.
- Michael Hobday & Andrew Davies & Andrea Prencipe, 2005. "Systems integration: a core capability of the modern corporation," Industrial and Corporate Change, Oxford University Press, vol. 14(6), pages 1109-1143, December.
- A. Canepa & P. Stoneman, 2004. "Comparative international diffusion: Patterns, determinants and policies," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 13(3), pages 279-298.
- Spyros Arvanitis & Heinz Hollenstein, 2001. "The Determinants Of The Adoption Of Advanced Manufacturing Technology," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 10(5), pages 377-414.
- Geyer, Anton & Davies, Andrew, 2000. "Managing project-system interfaces: case studies of railway projects in restructured UK and German markets," Research Policy, Elsevier, vol. 29(7-8), pages 991-1013, August.
- Leonard-Barton, Dorothy, 1988. "Implementation as mutual adaptation of technology and organization," Research Policy, Elsevier, vol. 17(5), pages 251-267, October.
- Massini, Silvia & Lewin, Arie Y. & Greve, Henrich R., 2005. "Innovators and imitators: Organizational reference groups and adoption of organizational routines," Research Policy, Elsevier, vol. 34(10), pages 1550-1569, December.
- Gil, Nuno, 2007. "On the value of project safeguards: Embedding real options in complex products and systems," Research Policy, Elsevier, vol. 36(7), pages 980-999, September.
- V. Krishnan & Shantanu Bhattacharya, 2002. "Technology Selection and Commitment in New Product Development: The Role of Uncertainty and Design Flexibility," Management Science, INFORMS, vol. 48(3), pages 313-327, March.
- Stoneman, Paul & Kwon, Myung-Joong, 1994. "The Diffusion of Multiple Process Technologies," Economic Journal, Royal Economic Society, vol. 104(423), pages 420-31, March.
- Rosenberg, Nathan, 1976. "On Technological Expectations," Economic Journal, Royal Economic Society, vol. 86(343), pages 523-35, September.
- Prencipe, Andrea & Tell, Fredrik, 2001. "Inter-project learning: processes and outcomes of knowledge codification in project-based firms," Research Policy, Elsevier, vol. 30(9), pages 1373-1394, December.
- Markard, Jochen & Truffer, Bernhard, 2008. "Technological innovation systems and the multi-level perspective: Towards an integrated framework," Research Policy, Elsevier, vol. 37(4), pages 596-615, May.
- Watson, Jim, 2004. "Selection environments, flexibility and the success of the gas turbine," Research Policy, Elsevier, vol. 33(8), pages 1065-1080, October.
- Miller, Roger, et al, 1995. "Innovation in Complex Systems Industries: The Case of Flight Simulation," Industrial and Corporate Change, Oxford University Press, vol. 4(2), pages 363-400.
- Hobday, Mike & Rush, Howard & Tidd, Joe, 2000. "Innovation in complex products and system," Research Policy, Elsevier, vol. 29(7-8), pages 793-804, August.
- Prencipe, Andrea, 1997. "Technological competencies and product's evolutionary dynamics a case study from the aero-engine industry," Research Policy, Elsevier, vol. 25(8), pages 1261-1276, January.
- Stephen Flowers, 2007. "Organizational capabilities and technology acquisition: why firms know less than they buy," Industrial and Corporate Change, Oxford University Press, vol. 16(3), pages 317-346, June.
- Hodson, Mike & Marvin, Simon, 2010. "Can cities shape socio-technical transitions and how would we know if they were?," Research Policy, Elsevier, vol. 39(4), pages 477-485, May.
- Barlow, James & Köberle-Gaiser, Martina, 2008. "The private finance initiative, project form and design innovation: The UK's hospitals programme," Research Policy, Elsevier, vol. 37(8), pages 1392-1402, September.
- Colombo, Massimo G & Mosconi, Rocco, 1995. "Complementarity and Cumulative Learning Effects in the Early Diffusion of Multiple Technologies," Journal of Industrial Economics, Wiley Blackwell, vol. 43(1), pages 13-48, March.
- Cacciatori, Eugenia, 2008. "Memory objects in project environments: Storing, retrieving and adapting learning in project-based firms," Research Policy, Elsevier, vol. 37(9), pages 1591-1601, October.
- Geels, Frank W., 2004. "From sectoral systems of innovation to socio-technical systems: Insights about dynamics and change from sociology and institutional theory," Research Policy, Elsevier, vol. 33(6-7), pages 897-920, September.
- Markard, Jochen & Truffer, Bernhard, 2006. "Innovation processes in large technical systems: Market liberalization as a driver for radical change?," Research Policy, Elsevier, vol. 35(5), pages 609-625, June.
- Francesco Lissoni, 2000. "Technological Expectations And The Diffusion Of 'Intermediate' Technologies," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 9(6), pages 487-516.
When requesting a correction, please mention this item's handle: RePEc:eee:respol:v:41:y:2012:i:2:p:452-466. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.