Procurement innovation: perspectives from Chinese international construction companies

Abstract

The international construction business is witnessing a trend that companies deliver projects through the adoption of innovative procurement systems (e.g. Building Operate Transfer, Public Private Partnership). By devising innovative procurement systems, it is possible to realise construction projects that are difficult for traditional procurement methods, to develop competitive advantages for companies, and ultimately, to deliver value to the society. Notably, Chinese companies are making impressive inroads into the international construction market through enhancing their competitiveness. However, little we know about how Chinese international construction companies (CICCs) perceive procurement innovation and how it relates to their recent success. This research aims to capture their perspectives towards procurement innovation by interviewing nine key decision-makers of CICCs and experts in this area. It is found that CICCs are gradually adopting procurement innovation as a competitive strategy. Unlike the traditional life-or-death competition, competing through procurement innovation can make more projects possible; the emergence of CICCs, in particular their strengths, can be encouraged to deliver more projects and value in the international construction market. This research not only provides CICCs with insights into the procurement innovations in the construction sector, but also enables other companies to know CICCs with which they might compete or collaborate in the near future.