Examining construction contractors' innovation through the lens of exploration and exploitation

Construction industry is recognised for its lack of innovative nature. As a project-based industry which forms temporary project settings to deliver one-off outputs, the industry constraints construction organisations to implement innovation.  However, recent arguments claim that traditional measurements such as profit, number of patents and amount of R&D do not appraise innovation entirely within organisational context. The necessity of contemporary measures or different perspectives to address hidden innovation has been recognised. This study attempts at investigating the deployment of innovation of construction contractor organisations through the lens of exploration and exploitation. The literature findings reveal that organisations improve their capability to innovate by learning and transferring knowledge to different organisational levels. Exploration and exploitation-two different learning approaches are adopted to develop a conceptual framework to explain the innovation of contractor organisations at organisational, project and project portfolio levels. When construction projects are collaboratively procured (i.e. Partnering, PPP, Design and Build, Management Contracting and New Engineering Contracts), construction organisations are likely to innovate more. This phenomenon is also discussed adopting social capital perspective.