Dynamics of Organisational Capability of Japanese Construction Firm towards Open and Service Innovation through PPP/PFI arrangement

Taeko Suehiro (School of Environment and Society, Tokyo Institute of Technology)
Kumiko Miyazaki (Graduate School of Innovation Management, Tokyo Institute of Technology)

STI Policy and Management Journal
Vol 5, No 1 (2020): STI Policy and Management

This study examined the influence of Public–Private Partnership (PPP) — or, more specifically, Private Finance Initiative (PFI) — arrangements in relation to open and service innovation in construction firms in Japan. The expectation of the PPP/PFI procurement arrangement is that Japanese construction firms will provide a broader range of services (service innovation) through expanded cooperation with various other firms (open innovation) compared to the conventional procurement scheme.Our in-depth case study of a Japanese construction company shows the dynamics of project-based firms' capability accumulation through a PPP/PFI arrangement. The study identified a model of capability development for construction firms towards service and open innovation. It consists of three organisational capabilities: technological capabilities, project capabilities and collaborative capabilities. The model can be seen as an ideal approach for understanding and comparing cases of long-term capability accumulation of project-based firms, especially regarding providing services that meet the public's needs. Keywords: Public–Private Partnership (PPP); Private Finance Initiative (PFI); Project Capability, Open innovation; Service innovation; Construction firm