Blockchain innovation ecosystems orchestration in construction
| DOI | https://doi.org/10.1108/IMDS-03-2022-0134 |
| Published date | 24 November 2022 |
| Date | 24 November 2022 |
| Pages | 672-694 |
| Subject Matter | Information & knowledge management,Information systems,Data management systems,Knowledge management,Knowledge sharing,Management science & operations,Supply chain management,Supply chain information systems,Logistics,Quality management/systems |
| Author | Eleni Papadonikolaki,Algan Tezel,Ibrahim Yitmen,Per Hilletofth |
Blockchain innovation ecosystems
orchestration in construction
Eleni Papadonikolaki
Bartlett School of Sustainable Construction, University College London, London, UK
Algan Tezel
Department of Civil Engineering,
School of Infrastructure and Sustainable Engineering, Aston University,
Birmingham, UK
Ibrahim Yitmen
Department of Construction Engineering and Lighting Science,
School of Engineering, J€
onk€
oping University, J€
onk€
oping, Sweden, and
Per Hilletofth
Department of Industrial Engineering and Management, University of G€
avle,
G€
avle, Sweden and
Department of Industrial Engineering and Management, University West,
Trollh€
attan, Sweden
Abstract
Purpose –Rapidadvancements in blockchaintechnology transformvarious sectors, attractingthe attention of
industrialists,practitioners,policymakersand academics,and profoundly affectconstruction businessesthrough
smartcontracts and crypto-economics. Thispaper explores the blockchaininnovationecosystem in construction.
Design/methodology/approach –Through a qualitative study of 23 diverse interviewees, the study
explores how open or closed the blockchain innovation ecosystem in construction is and who its emerging
orchestrators are.
Findings –The data showed that construction aims towards an open innovation blockchain ecosystem,
althoughthere are elements of hybridisationand closedness, eachsystem pointing out to differentorchestrators.
Practical implications –The study has implications for governments and large companies in construction,
showing that open innovation initiatives need to be encouraged by policymakers through rules, regulations
and government-sponsored demonstrator projects.
Social implications –The data showed that there is lack of readiness for business model change to support
open innovation blockchain ecosystems in construction.
Originality/value –This is the first study applying the open innovation theory in the construction industry
and sheds light into the phenomenon of blockchain, suggesting routes for further democratisation of the
technology for policymakers and practitioners.
Keywords Blockchain, Building information modelling (BIM), Ecosystem, Innovation, Ecosystem
orchestration
Paper type Research paper
IMDS
123,2
672
© Eleni Papadonikolaki, Algan Tezel, Ibrahim Yitmen and Per Hilletofth. Published by Emerald
Publishing Limited. This article is published under the Creative Commons Attribution (CC BY 4.0)
licence. Anyone may reproduce, distribute, translate and create derivative works of this article (for both
commercial and no commercial purposes), subject to full attribution to the original publication and
authors. The full terms of this licence may be seen at http://creativecommons.org/licences/by/4.0/
legalcode
Funding: This work incorporates results from the research project “Toward Blockchain-enabled
Construction Supply Chains: Potential, Requirements and Implementation”funded by the Centre for
Digital Built Britain, under Innovate UK Grant No. 90066.
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/0263-5577.htm
Received 7 March 2022
Revised 20 July 2022
26 October 2022
Accepted 3 November 2022
Industrial Management & Data
Systems
Vol. 123 No. 2, 2023
pp. 672-694
Emerald Publishing Limited
0263-5577
DOI 10.1108/IMDS-03-2022-0134
1. Introduction
The emergenceof blockchain technologybrings changesacross various industriesand attracts
the attention of industrialists, practitioners, policymakers and academics. Blockchain offers a
novel peer-to-peer controlled, distributed database structure and the potential to profoundly
affect thebusiness transactions in construction throughsmart contracts, cryptocurrencies and
reliable asset tracking (Scott et al., 2021). Blockchain challenges the existing views of
innovation, primarily considered as introduction of novel artefacts or processes (Abernathy
and Clark, 1985). Instead, new cross-disciplinary, unbounded and systemic logics in digital
innovation emerge (Yoo et al., 2010) with more distrib uted and less pre defined interact ions
between individuals and organisations(Lyytinen et al.,2016).Bl ockchain technology contains
all these characteristics and complexities of digital innovation.
Blockchain impacts various industries, such as finance (Zamani and Giaglis, 2018),
logistics (Shoaib et al., 2020;Gupta et al., 2020) and healthcare (Sharma et al., 2019), with some
industries been disrupted faster than others (Zamani and Giaglis, 2018). Among various
industries that blockchain impacts, construction is the most traditional, and it has been
notorious for its digital divide across the ecosystem (Dainty et al., 2017). Discussions on
blockchain in construction have accelerated after 2015, a decade after the first introduction
of blockchain in 2008. As construction is very transaction-heavy, it offers an ideal setting for
blockchain innovation as it becomes increasingly digitalised (Papadonikolaki et al., 2022).
Reports show the increasing popularity of blockchain that is touted as the next frontier in
construction (Li et al., 2019;Hunhevicz and Hall, 2020;Perera et al., 2020). Key use cases of
blockchain in construction include project bank accounts (PBAs) for fast payments, reverse
auction-based tendering for bidding and asset tokenisation for project financing (Tezel et al.,
2021) and integrations with building information modelling (BIM) (Hunhevicz and Hall, 2020).
Blockchain could be considered a systemic innovation showing a transactional nature,
affecting the whole construction ecosystem holistically and not just isolated actors.
The construction industry undergoes digitalisation through innovations such as BIM,
Internet of things (IoT) and big data analytics (Li and Kassem, 2021;Sacks et al.,2020)to
addressmany of its pathologies, e.g. trust,payments, fragmentation.Several countries attempt
to regulate, standardise and mandate such technologies. Various institutions, for example,
government,policy and industry consortia,actively developed BIM implementation processes
and pushed its use.However, in low tiers of constructionsupply chain, the democratisationof
BIM was problematicand suppliers’small and mediumenterprises (SMEs) lagged behinddue
to limitedresources and general lackof trust to the good will of tier-1 contractors,to whom they
are based on for fast payments to retain their liquidity (Tezel et al.,2021). To this end,
construction is a project-based and very paper-based and transaction-heavy sector lacking
trust (Qian and Papadon ikolaki, 2020;Li et al., 2019)as tier-1s act as payment gatekeepers (Li
et al.,2019). Blockchain is a transparentlayer for immutable transactions,called the “Internetof
trust”, which is a network that captures real-world information, context and value through
cryptographically assured transactions generating a “transparently validated consensus on
truth”(Calcaterraand Kaal, 2020) that has the potentialto reshape the construction ecosystem.
This paperproblematises aroundecosystem leadership necessaryfor orchestratingblockchain
innovation efforts in construction ecosystems.
Disruptive innovations such as blockchain happen not only inside firms, but through
numerous developments taking place simultaneously in an interconnected ecosystem
(Chesbrough, 2003). The open innovation (OI) paradigm explains how firms can use resources
such as knowledge, complementary assets and intellectual property (IP) outside their
boundaries to innovate and commercialise innovation (Chesbrough, 2003). OI is important for
ecosystems, with players having limited resources, such as SMEs that can exploit open-
source developments and collaborate with other tiers. Innovators need capabilities to
orchestrate these assets and ensure profitable innovation by exploiting external resources
Blockchain
innovation
ecosystems in
construction
673
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