factors affecting innovation and competitiveness in northern iraq construction industry

Factors Affecting the Competitiveness and Innovation in Northern Iraq Construction Industry

Sevar Neamat (145233)

Supervisor: Assoc Prof Dr Ibrahim Yitmen

February 2016

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Agenda

• Innovation and Competitiveness• Iraq and Northern region Construction Industry• Factors affecting innovation and competitiveness• Questionnaire• Data Analysis • Display results• Hypothesis • Testing • Conclusion• Future work

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Innovation and Competitiveness

• Innovation is the process of creating and implementing new ideas for the community.

• Competitiveness is the ability of a firm to provide the community standard quality services at competitive costs.

• Creativity and innovation have always been recognized as the foundation of success of any organization.

• Without taking the competitiveness in consideration, the prosperity process of any firm would be difficult.

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Iraq and Northern Region

• After the Iraq war in 2003, the construction industry developed dramatically in the country, especially in the Northern region.• So, an advance innovation system in managing,

designing and construction execution is needed for the construction industry.• However, many of the construction firms fail in

performance! Which means unsuccessful in achieving its goals

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How to keep the success path?

• To keep the construction industry on the success path by making them innovative and competitive, examining factors affecting innovation and competitiveness is crucial. • So, this research is conducted so as to identify

the factors influencing innovation and competitiveness of the construction industry in Northern Iraq.

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Conducting the research

• Based on the literature review, forty three factors have been selected for both innovation and competitiveness.• These factors are listed down into seven

dimensions.• A questionnaire is made up of these

dimensions and distributed to 150 construction firms in the region.• 85 of the firms replied with the answers

making the response rate 57%.

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Questionnaire dimensions

• Innovation: 25 questions about the following dimensions• Inputs (5 questions)• Drivers (4 questions)• Enablers (5 questions)• Impacts (4 questions)• Barriers (6 questions)• Firm’s need of innovation (1 question)

• Competitiveness: 1 dimension which consists of 18 questions

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Data Analysis

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Who filled the Questionnaire?More than 95% were from Civil Engineers

24%

12%

24%4%1%1%

13%

7%

8%4%2%1%

Please state your position in the company

Supervisor EngineerExecutive EngineerManager of the companyAssist ManagerDesignerHead of Office (civil engineer)Site EngineerHead of EngineersDirect CommissionerOwner of CompanyProject ManagerRapporteur of Company

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Results of Input dimension

Capital (investment in ICT, Software, and Equipment)

Research and Development Expenditure (R&D), and (R&D) projects

Number of Employees who Devote to InnovationConsultancy (To provide valuable advices)

Internal and External idea generation

2

3

4

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Results of Driver dimension

Customer Requirements

Technology Development

Regulation and Legislation

Project Performance Improvement 3

3.5

4

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Results of Barrier dimension

Unwillingness to Change

Lack of Technology

Lack of Experienced and Qualified Staff

Time Constraint

Financial Constraint

Government Policy

2

3

4

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Results of Enabler dimension

Collaborative Partnering

Commitment

Reward SystemEducation and Training Policy

Early Contractor Involvement (ECI)

3

3.5

4

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Results of Impact dimension

Improvement of Experience

Improve Competitiveness

Increase in Technical, Organizational, Management Capability

Short and Long term Profitability 2

3

4

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Results of Competitiveness dimension

Research and DevelopmentAdaption to ChangeRate of Marketing Budget

Motivation and Employ Satisfaction

Strategic Management Plans

Change of Target Market

Level of Success

Intellectual Property (Patents, Brand Registration)Information Communication Technology (ICT)InternationalizationPioneering Leaders

Improvement of Experience

Short and Long Term Profitability

Product Competitiveness

Accounting and Financial System

Level of performance

Cooperative Working AtmosphereCompany Culture

0

2

4

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Developing Hypotheses

• Based on the results of data analysis, 4 hypotheses have been developed:• Hypothesis 1: Construction companies in Northern

Iraq activating their inputs, drivers, and impacts of innovation can improve their project performance.• Hypothesis 2: Construction companies in Northern

Iraq activating their inputs, drivers, and impacts of innovation can increase their competitive advantages.

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Developing Hypotheses

• Based on the results of data analysis, 4 hypotheses have been developed:• Hypothesis 3: Construction companies stimulating

enablers and dimensions of competitiveness can improve their project performance.• Hypothesis 4: Construction companies unable to

overcome barriers cannot improve their competitiveness and project performance.

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Data analysis

• Data has been analyzed

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Hypotheses Testing

• To ensure the validity of the developed hypotheses, hypotheses testing is performed over them.

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Testing Hypothesis 1

T-Test for Input - Project PerformancePaired Differences

t dfSig. (2-

tailed)Mean

Std. Deviation

Std. Error Mean

95% Confidence

Interval of the Difference

Lower UpperInput - Project Performance -.00152 .8267

6.1017

7-.2047

6 .20173 -.015 65 .988

• Data analysis shows us, 66 firms who have selected high scales for input factors, their project performances are high.

• Therefore, the firms that considering the input dimension is essential for the innovation, they have an improved project performance.

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Testing Hypothesis 1• For the driver dimension, the results reveals

that 77 construction firms having high driver’s scales, have high project performance.

• Which means that, the construction sectors paying attention for driver dimension, have high performance in their projects.

T-Test for Driver - Project Performance

Paired Differences

t df Sig. (2-tailed)Mean Std.

DeviationStd. Error Mean

95% Confidence


Lower Upper

Driver - Project

Performance.06818 .61724 .07034 -.0719

1 .20828 .969 76 .335

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Testing Hypothesis 1• Similarly, 69 construction firms having high

impact in their scales, have high project performance.

• This also means that, the firms which care for their impacts, have excellent project performance.

T-Test for Impact - Project Performance

Paired Differences

t df Sig. (2-tailed)Mean

Std. Deviatio

n

Std. Error Mean

95% Confidence Interval of the

DifferenceLower Upper

Impact - Project Performance

.03623 .74542 .08974 -.14284 .21530 .404 68 .688

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• In the results of the survey, 58 construction firms have given high ranges to input factors.

• These firms have been found with high competitive advantages.

T-Test for Input - Competitiveness

Paired Differences

t dfSig. (2-

tailed)MeanStd.

Deviation

Std. Error Mean

95% Confidence


Lower UpperInput -

Competitiveness

-.02625

.62565

.08215

-.19075

.13826 -.319 57 .751

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• In the same way, 58 of the construction firms having high scales of drivers, have high scale of competitiveness.

T-Test for Driver - Competitiveness

Paired Differences

t dfSig. (2-

tailed)Mea

nStd.

Deviation

Std. Error Mean

95% Confidence


Lower Upper Driver -

Competitiveness

.15996 .71960 .0944

9-.0292

5.3491

7 1.693 57 .096

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• The firms with high values of impact factors, have high values of competitiveness.

Paired Differences

t dfSig. (2-

tailed)MeanStd.

Deviation

Std. Error Mean

95% Confidence


Lower Upper

Impact - Competitiven

ess-.0038

3.6422

7.0843

3-.1727

1.1650

4 -.045 57 .964

T-Test for Impact - Competitiveness

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• Data analysis discovered that 75 of the firms that gave high metrics to enabler dimension, have high project performances

Paired Differences

t dfSig. (2-

tailed)Mean

Std. Deviatio

nStd. Error Mean

95% Confidence


Lower Upper

Enabler - Project

Performance.08933 .67415 .0778

4-.0657

7.2444

4 1.148 74 .255

Enabler - T-Test for Project Performance

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• On the other side, 58 of the construction firms having high competitiveness have high project performance.

T-Test for Competitiveness - Project Performance

Paired Differences

t dfSig. (2-

tailed)MeanStd.

Deviation

Std. Error Mean

95% Confidence


Lower Upper

Competitiveness - Project

Performance-.194

44 .91289 .11987

-.43448

.04559 -1.622 57 .110

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Testing Hypothesis 4• All of the firms in the questionnaires who gave

high scales to barrier factors, means that they consider these factors as obstacles and eventually avoid them.

• The firms with high scales of barriers, have high competitive advantages.

T-Test for Barrier - Competitiveness

Paired Differences

t dfSig. (2-

tailed)Mea

nStd.

Deviation

Std. Error Mean

95% Confidence


Lower Upper Barrier -

Competitiveness

.08431

1.11924

.12140

-.15710

.32573 .695 84 .489

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• The same way, 61 of the firms who have high barrier scales, which means they avoid them, have high project performance.

T-Test for Barrier - Project Performance

Paired Differences

t dfSig. (2-

tailed)

Mean

Std. Deviati

onStd. Error

Mean

95% Confidence Interval of the

Difference

Lower Upper

Barrier - Project

Performance

-.03552 .81315 .10411 -.24378 .17274 -.341 60 .734

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Research objectives

• Analyse the factors affecting the competitiveness and innovation in construction industry in Northern Iraq• Share these results to draw a conceptual

framework indicating the relationship between innovation and competitiveness• Provide some developed hypotheses related to

analysing results.

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Conceptual Framework of Innovative System and Competitiveness in

Construction Industry

• it can be noticed that activating the factors of input, driver and impact, affect positively on project performance of the construction firms.

• While by stimulating enablers’ factors and competitiveness dimensions, results in improving the competitive advantage of the construction sectors.

Driver

Impact

Enabler

Input

Barrier

Proj

ect P

erfo

rman

ce

Competitiveness dimensions

Com

petit

ive A

dvan

tage

+ H1

+ H1

+ H1

+ H2

+ H2

+ H2

+ H3

- H4 -H

4

+ H3

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• The factors of the variables inputs, drivers and impacts, have positive influences on increasing the firms’ competitive advantages, which means by activating these variables, the competitive advantages improve proportionally.

Driver

Impact

Enabler

Input

Barrier

Proj

ect P

erfo

rman

ce


Com

petit

ive A

dvan

tage

+ H1

+ H1

+ H1

+ H2

+ H2

+ H2

+ H3

- H4 -H

4

+ H3

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• Finally, the barriers dimension of the companies, have negative affect on both of project performance and competitiveness.

• So, without overcoming the current barriers, the construction firms are incapable of improving the project performance and competitive advantages.

Driver

Impact

Enabler

Input

Barrier

Proj

ect P

erfo

rman

ce


Com

petit

ive A

dvan

tage

+ H1

+ H1

+ H1

+ H2

+ H2

+ H2

+ H3

- H4 -H

4

+ H3

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Conclusion

• A collection of factors effecting innovation and competitiveness have been studied and selected forming a group of variables/dimensions for innovation and competitiveness. Based on these dimensions, a structured questionnaire survey is created and distributed to experienced engineers such as projects managers, site engineers and office engineers in Northern Iraq construction industry.

• Forty three factors have been selected and listed under seven groups of variables based on previous studies. The variables considered in this research are: 1) input, 2) driver, 3) barriers, 4) enabler, 5) impact, 6) competitiveness, and 7) firm’s need of innovation.

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Conclusion

• The 150 firms have been surveyed, out of which 85 firms replied with the answers making the response rate 57%. Data from questionnaires has been collected and analyzed followed by developing four hypotheses outlining the improvements of project performance of the construction firms and their competitive advantages.

• Moreover, a conceptual framework clarifying the developed hypotheses are designed, ended up with exposing two main theories: 1) through stimulating the variables of innovation such as inputs, drivers, enablers and impacts, the competitive advantages and project performance of construction sectors increase; 2) the construction sectors unable to overcome barriers are unable to increase their project performance and competitiveness.

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Research Limitation

• Due to time limitations, the research was conducted on a relatively small number of construction firms, since only 85 of the firms were replied with answers.• Most of the construction firms in Northern Iraq do not give

an accurate information or even a correct estimation about their annual turnovers, which makes it hard to categorize the firms according to their sizes. • There is no prior research studies on the same topic for

the region, causing it more difficult to lay a foundation for understanding the research problem.

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Recommendations for further research

• Failure measurement systems for the construction industry in Northern Iraq are not effective to measure construction projects performance and identify their problems. Therefore, it is highly recommended to develop such systems. Furthermore, it is recommended to develop a specific unit in all construction firms so as to encourage the innovation. Finally, it is also recommended to investigate and evaluate the most essential factors as a case study of construction projects in Northern Iraq.

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Thanks for your attention

• Sevar Neamat

factors affecting innovation and competitiveness in northern iraq construction industry

Engineering