Innovation in Private Infrastructure Development Effects of the Selection Environment and Modularity

Nuno Gil and Marcela Miozzo

No 07-23, DRUID Working Papers from DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies

Abstract: This study investigates how the selection environment and modularity affect innovation in private infrastructure development. Our findings stem from an in-depth empirical study of the extent ten process innovations were implemented in an airport expansion programme. Our findings suggest that developer and customers can each occasionally champion or resist innovations. An innovation succeeds contingent upon the capability of the stakeholder groups to develop collectively a plan to finance and implement the innovation, which reconciles subjective individual assessments. Innovations can be particularly hard to adopt when they require financing from different budgets, or when the developer’s investment pays off only if customers behave in a specified way in the future. We also find that the degrees of novelty and modularity neither represent sufficient or necessary conditions enabling or hindering innovation. Novelty, however, makes the innovation champion’s job harder because it leads to perceptions of downside risk and regulatory changes, whereas modularity helps the champion operationalise ways that moderate resistance to innovate.

Keywords: Innovation; financing; implementation (search for similar items in EconPapers)
JEL-codes: O31 R42 (search for similar items in EconPapers)
Date: 2007
New Economics Papers: this item is included in nep-ino and nep-ppm
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