Business model innovation and its impact on the diffusion of innovation in construction business organizations

The evolving business landscape, driven by digitalization and environmental, social, and governance (ESG) considerations, requires a systems approach to construction business. The discussion around digitalization as a key driver of innovation and a catalyst for change has been crucial, prompting construction organizations to adapt their business models. Due to the dynamic nature of the construction industry, construction organizations often encounter challenges in embracing new technologies and updating their business models to meet changing market demands. Consequently, business model innovation often takes a backseat. This chapter delves into how innovation, particularly driven by public sector clients, can influence business model innovations in construction organizations, drawing insights from an extensive literature review and the Hong Kong Housing Authority case. The findings suggest that construction organizations may be more inclined to adopt new technologies, implement systems, and explore business model innovations when public policies are in place to support such initiatives.