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What are the Reasons Behind the Growth of UAE’s Construction Industry?

Construction Projects in the UAE

Construction Projects in the UAE

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Innovation in any field is the application of new ideas and is often complex and dynamic even if it is not technical in nature. In the construction industry, the definition of innovation is totally different from the manufacturing and service industries because of the nature of projects, which makes each project unique.

Construction innovation focuses on the project and the achievement of its milestones; the process of construction innovation covers various project facets such as human resources, cost, management, problem solution, and implementation.

This article describes the critical factors that have had a significant impact in innovation in construction projects in the United Arab Emirates (UAE), which could help the construction firms and specialists to encourage innovation in construction within the country.

Top construction projects in Dubai

1. The Characteristics of Construction Innovation

The characteristics of construction innovation can be described in different forms as discussed below:

1.1 Project-based Cooperative Innovation

There are two levels of cooperation: project and strategic. In other words, there is cooperation between parties involved in the project and there is long-term cooperation between different construction organizations in the industry.

Integrative innovation is the part of project-based cooperative innovation in which integration in construction is essential not only for technological aspects but also for social and managemental aspects.

1.2 Open Innovation

Due to the diverse requirements in a construction project, it involves multiple parties such as contractors, suppliers, consultants, etc. Every sub-part of these parties is considered as a source for innovation that makes the construction innovation one kind of open innovation.

1.3 Dynamic Innovation

Construction projects are complex, dynamic, and non-linear in nature. Therefore, each construction project is considered unique. The development of the characteristics of each new construction project is one kind of dynamic innovation.      

2. Widely-used Forms of Innovation

Researchers have defined three types of innovation. The first one is product innovation or technical innovation, which is related to specific construction products and could be drawn-out to include the whole construction system. Moreover, the design of the product, material, and manufacturing process of the product are also considered under product innovation.

The second one is procurement innovation or organizational innovation, which is related to the way the project was procured. New forms of contract and supply chain management are considered as samples of procurement innovation.

The third one is the process innovation, which is related to the process itself and how the work is going to be achieved. While the specifics required for a steel frame building and cast in situ concrete building can be similar, the participating firms and supply chain could be totally different.

Five levels of innovation related to technical and construction organizations are discussed below:

  1. Generic innovations, which aim to have a new paradigm like the improvement of the concrete characteristics.
  2. Epochal innovations, that is a sub-degree of generic innovations and is about improvement of certain sector of the activity.
  3. Altering innovations, it is aimed at promoting alterations at a higher level in the organization.
  4. Entrenching innovations, it is only a modification to the existing methodology in alignment with the strategic direction.
  5. Incremental innovation, it shows how to use the same collected input to improve and enhance the output.

3. Key Success Factors of Innovation in Construction Projects in UAE

The identified factors which are responsible for the success of innovation in construction in UAE are discussed below:

3.1 Support for Research and Development Investment

A positive and strong relationship has been found between the development of national innovation and level of local research and development in that particular country.

Government reports prepared in recent years indicated that high interest in research and development investment in UAE is one of the key factors which has positively influenced the innovation in the local construction market, accordingly increasing its contribution share in economic growth in the country.

The link between innovation in UAE and investment in research and development is not only a matter of the investment amount but also on the correct deployment of that investment to be aligned with the innovation strategy.

Support for research and development investment is done by governments through different mechanisms like rewards system, tax relief, etc.

Also, the organizations are allocating certain amount of business development for in-house research and development. Additionally, research and development institutes, independent institutes, and universities are finding marketing mechanisms to raise funds for supporting their research work.

3.2 Commitment

Commitment has been identified as a very crucial factor for the success of construction industry innovation in the UAE. Since the innovation process goes through various administrative and technical challenges, the commitment of the organization’s top management to innovation enhances the integration between team members and supports them to overcome those challenges.

The commitment extending from the government and authorities through the main organization leaders up to supply chain leaders was visible in many construction projects of UAE. The importance of leader commitment on promoting the team work concept, trust, conflict resolution, and respect are considered as enabler for innovation.

3.3 Policies and Vision

Innovation in UAE has been initiated and strongly backed by the vision of the country’s leadership. The UAE government has realized the role of innovation to reform the economy into a sustainable economy, which relies on wide range of knowledge rather than consumable resources.

In 2014, the government of UAE under the leadership of H. H Sheikh Mohammed Bin Rashid al Maktoum launched the National Innovation Program. The sectors considered under this innovation and development program include the transport industry, renewable energy, health, and space.

Eventually, most of these sectors require the support of the construction industry which consequently will call for innovation in the construction industry itself.

Such vision was translated into reality by formulating a set of policies that include new regulations, direction of investment, engorgement of private sector and modification of education curriculums to include motivation concept in its core and methods.

3.4 Advanced Procurement Systems

Procurement systems have been identified as a major factor affecting the innovation in construction projects in UAE. The construction industry has increased the adoption of non-traditional procurement and contracting method such as partnership, joint ventures, etc.

The cooperation and problem solving has enhanced through untraditional solutions. Innovation process in construction was more successful when the integration between the various stakeholders and supply chain became more effective. Also, the advanced procurement system played a vital role for such effective integration.

When strategic and innovative procurement concepts have been adopted, the supply chain management in various projects positively facilitated the collaboration among the project parties. Thus, it unified the goals and kept the team to focus on innovative targets. 

3.5 Leadership Approach

Leadership approach is found to be linked to the organization’s innovation ability in many construction projects in UAE. The team leaders played an essential role in fixing and implementing the required policies and procedures to achieve innovation.

There are two main styles of leadership identified in the construction industry in the UAE. The first one is the transactional style, this style develops the relationship between the team members and their leader through clear communication.

It provides a clear idea of what exactly is required from leaders, with cutting-edge objectives and goals. Such a style of leadership is found to have a positive impact on team innovation.

The other style of leadership is the transformational style, this style encourages the members to go beyond their nominated capacity through changing their thoughts and perceptions. It supports and enables team innovation abilities.

3.6 Market Oriented Researches

The economic growth of UAE boosted due to the continuous process of market orientation, research, and innovation. Also, researchers suggest a strong positive relationship between firm innovation and firm’s market orientation should be promoted for the country’s growth.

Furthermore, the customer orientation as a competition strategy was involved in many projects to survive in high competitive environment. Thus, the innovative solutions were generated to satisfy the demand of customer and to sustain in the market.

Also, the organization and research centers are more focused in developing and responding to market demands in order to enhance innovation system in UAE.

3.7 Flexibility in Movement of Skilled Labor and Subject Expert

Movement of skilled labors, specialists, and experts between organizations allowed a new solution to generate through mixture of different working cultures and knowledge.

The policies and regulation which were hindering the flexibility of specialist movements between companies were considered as a barrier for national innovation in UAE. Certain measures were taken to curb such policies and regulation.

The perception of expert workers, working towards different organizations in the UAE, is highly commendable. Although the skilled labor movement restrictions would positively support the organization’s stability, however, it negatively affects skilled labor’s motivation and innovation ability.

3.8 Knowledge Exchange

The shortage of professionals, experts, and skilled laborers is always counted as the main challenge for the construction industry in the UAE and has been marked as one of the major risks for project delays.

UAE government has realized that fact and had launched a program in 2015, which is composed of seven initiatives to support the national innovation in the country. The initiatives include the annual exhibitions for innovation by the participation of schools, universities, government entities, and private sectors.

Such exhibitions proved to be a potential attraction for global experts to follow and participate. Another initiative was about holding training programs for potential innovators by world-leading experts under the UAE government’s fund.

The same concept was achieved through the encouragement of foreign investment in innovative construction projects in the UAE. Especially for world industry leaders who have their own research and development centers, such leaders came to the country along with their knowledge and experts, a live example to that is Masdar City in Abu Dhabi.

3.9 In-House Testing Facilities

The impact of the distance between research and development institution and their testing laboratories on the value of the output of the research and development process is huge. The researchers suggest that the common culture, language, and even religious background are strongly impacting the output.

According to data collected from more than 6000 research and development firms located in 59 countries; close geographic proximity of research and development institutes and the testing laboratories has positively enhanced the output of the process.

Construction related testing facility - Lonestar Technical Services

The construction industry in UAE was facing the shortage of local and in-house testing facilities. However, the national leadership launched a program to curb the obstructions that research and development centers were facing. This program resulted in the development of local and in-house testing facilities.

Researchers suggest that increasing the number of in-house testing facility can help reduce the time span of construction process by a significant measure.

4. Lesson Learned

As displayed by projects in the UAE, this section will give some suggestions which can be taken as guidelines for improving the innovation and the development in construction projects:

  1. Government should uphold the interest in research and development by means of different programs and schemes. The proper framework should be adaptable enough to acknowledge new types of procurements and agreements.
  2. Government should know the need of the market and adopt new practices for development.
  3. Government should organize conferences and events with other developed countries for knowledge exchange.
  4. Government should uphold the establishment of research centers and local testing laboratories. Concerned specialists should be eager to acknowledge and authorize the locally generated test reports.
  5. The schooling framework inside the nation should allow diversity and decentralization.
  6. The construction association ought to dispense the adequate fund to help research and development investment within organization. Top administration of the association ought to commit on the innovation success.
  7. Construction associations need to adjust their methodology with governmental innovation vision. They should create and acknowledge new types of procurement and their human resource policies should uphold the specialist’s rotation within the local market.
  8. Organization should be client-orientated and working based on the market interest.
  9. Research and development organizations and colleges should build up their advertising strategies to raise funds to support the research work. Their framework should allow the rotation of expertise in the local market.
  10. Universities should focus on developing their own research laboratories or else rely on the locally available testing facilities to promote research on new technologies.


What is open innovation?

There are many parties involved in a construction project such as contractor, supplier and consultants. These parties are considered as a source of innovation that make the construction innovation a kind of open innovation.

What is generic innovation?

An innovation which aims to make a new paradigm is called generic innovation.

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