The current issue and full text archive of this journal is available on Emerald Insight at:

https://www.emerald.com/insight/0263-5577.htm

IMDS
123,2 Blockchain innovation ecosystems
orchestration in construction
Eleni Papadonikolaki
Bartlett School of Sustainable Construction, University College London, London, UK
672
Algan Tezel
Received 7 March 2022
Department of Civil Engineering,
Revised 20 July 2022 School of Infrastructure and Sustainable Engineering, Aston University,
26 October 2022
Accepted 3 November 2022 Birmingham, UK
Ibrahim Yitmen
Department of Construction Engineering and Lighting Science,
School of Engineering, J€onk€oping University, J€onk€oping, Sweden, and
Per Hilletofth
Department of Industrial Engineering and Management, University of G€avle,
G€avle, Sweden and
Department of Industrial Engineering and Management, University West,
Trollh€attan, Sweden

Abstract
Purpose – Rapid advancements in blockchain technology transform various sectors, attracting the attention of
industrialists, practitioners, policymakers and academics, and profoundly affect construction businesses through
smart contracts and crypto-economics. This paper explores the blockchain innovation ecosystem in construction.
Design/methodology/approach – Through a qualitative study of 23 diverse interviewees, the study
explores how open or closed the blockchain innovation ecosystem in construction is and who its emerging
orchestrators are.
Findings – The data showed that construction aims towards an open innovation blockchain ecosystem,
although there are elements of hybridisation and closedness, each system pointing out to different orchestrators.
Practical implications – The study has implications for governments and large companies in construction,
showing that open innovation initiatives need to be encouraged by policymakers through rules, regulations
and government-sponsored demonstrator projects.
Social implications – The data showed that there is lack of readiness for business model change to support
open innovation blockchain ecosystems in construction.
Originality/value – This is the first study applying the open innovation theory in the construction industry
and sheds light into the phenomenon of blockchain, suggesting routes for further democratisation of the
technology for policymakers and practitioners.
Keywords Blockchain, Building information modelling (BIM), Ecosystem, Innovation, Ecosystem
orchestration
Paper type Research paper

© Eleni Papadonikolaki, Algan Tezel, Ibrahim Yitmen and Per Hilletofth. Published by Emerald
Publishing Limited. This article is published under the Creative Commons Attribution (CC BY 4.0)
licence. Anyone may reproduce, distribute, translate and create derivative works of this article (for both
commercial and no commercial purposes), subject to full attribution to the original publication and
Industrial Management & Data authors. The full terms of this licence may be seen at http://creativecommons.org/licences/by/4.0/
Systems legalcode
Vol. 123 No. 2, 2023
pp. 672-694 Funding: This work incorporates results from the research project “Toward Blockchain-enabled
Emerald Publishing Limited Construction Supply Chains: Potential, Requirements and Implementation” funded by the Centre for
0263-5577
DOI 10.1108/IMDS-03-2022-0134 Digital Built Britain, under Innovate UK Grant No. 90066.
1. Introduction Blockchain
The emergence of blockchain technology brings changes across various industries and attracts innovation
the attention of industrialists, practitioners, policymakers and academics. Blockchain offers a
novel peer-to-peer controlled, distributed database structure and the potential to profoundly
ecosystems in
affect the business transactions in construction through smart contracts, cryptocurrencies and construction
reliable asset tracking (Scott et al., 2021). Blockchain challenges the existing views of
innovation, primarily considered as introduction of novel artefacts or processes (Abernathy
and Clark, 1985). Instead, new cross-disciplinary, unbounded and systemic logics in digital 673
innovation emerge (Yoo et al., 2010) with more distributed and less predefined interactions
between individuals and organisations (Lyytinen et al., 2016). Blockchain technology contains
all these characteristics and complexities of digital innovation.
Blockchain impacts various industries, such as finance (Zamani and Giaglis, 2018),
logistics (Shoaib et al., 2020; Gupta et al., 2020) and healthcare (Sharma et al., 2019), with some
industries been disrupted faster than others (Zamani and Giaglis, 2018). Among various
industries that blockchain impacts, construction is the most traditional, and it has been
notorious for its digital divide across the ecosystem (Dainty et al., 2017). Discussions on
blockchain in construction have accelerated after 2015, a decade after the first introduction
of blockchain in 2008. As construction is very transaction-heavy, it offers an ideal setting for
blockchain innovation as it becomes increasingly digitalised (Papadonikolaki et al., 2022).
Reports show the increasing popularity of blockchain that is touted as the next frontier in
construction (Li et al., 2019; Hunhevicz and Hall, 2020; Perera et al., 2020). Key use cases of
blockchain in construction include project bank accounts (PBAs) for fast payments, reverse
auction-based tendering for bidding and asset tokenisation for project financing (Tezel et al.,
2021) and integrations with building information modelling (BIM) (Hunhevicz and Hall, 2020).
Blockchain could be considered a systemic innovation showing a transactional nature,
affecting the whole construction ecosystem holistically and not just isolated actors.
The construction industry undergoes digitalisation through innovations such as BIM,
Internet of things (IoT) and big data analytics (Li and Kassem, 2021; Sacks et al., 2020) to
address many of its pathologies, e.g. trust, payments, fragmentation. Several countries attempt
to regulate, standardise and mandate such technologies. Various institutions, for example,
government, policy and industry consortia, actively developed BIM implementation processes
and pushed its use. However, in low tiers of construction supply chain, the democratisation of
BIM was problematic and suppliers’ small and medium enterprises (SMEs) lagged behind due
to limited resources and general lack of trust to the good will of tier-1 contractors, to whom they
are based on for fast payments to retain their liquidity (Tezel et al., 2021). To this end,
construction is a project-based and very paper-based and transaction-heavy sector lacking
trust (Qian and Papadonikolaki, 2020; Li et al., 2019) as tier-1s act as payment gatekeepers (Li
et al., 2019). Blockchain is a transparent layer for immutable transactions, called the “Internet of
trust”, which is a network that captures real-world information, context and value through
cryptographically assured transactions generating a “transparently validated consensus on
truth” (Calcaterra and Kaal, 2020) that has the potential to reshape the construction ecosystem.
This paper problematises around ecosystem leadership necessary for orchestrating blockchain
innovation efforts in construction ecosystems.
Disruptive innovations such as blockchain happen not only inside firms, but through
numerous developments taking place simultaneously in an interconnected ecosystem
(Chesbrough, 2003). The open innovation (OI) paradigm explains how firms can use resources
such as knowledge, complementary assets and intellectual property (IP) outside their
boundaries to innovate and commercialise innovation (Chesbrough, 2003). OI is important for
ecosystems, with players having limited resources, such as SMEs that can exploit open-
source developments and collaborate with other tiers. Innovators need capabilities to
orchestrate these assets and ensure profitable innovation by exploiting external resources
IMDS (Chesbrough, 2008). In innovation ecosystems, the ecosystem orchestrator becomes
123,2 increasingly important, especially in collaborative and OI, as they orchestrate access to the
ecosystem, the SMEs contributing to innovation efforts, the ecosystem relations, resources
and social capital (Giudici et al., 2018). Dhanaraj and Parkhe (2006) defined ecosystem
orchestrator as a central player taking deliberate actions to create value by connecting firms,
facilitating their interactions and setting governing rules.
As blockchain technology relates to open-source code and value co-creation from
674 community members, it has meaningful links to the OI paradigm (Mu et al., 2019). For this
reason, the paper focuses on the blockchain innovation ecosystem in construction. Giudici et al.
(2018) discussed open system orchestration, focusing more on pro-social interventions rather
than profiting from innovation. In general, ecosystem orchestrators provide solutions to lead
and bring consensus to the ecosystem and in the new and emerging blockchain ecosystem in
construction, closed and open ecosystem orchestrators co-exist. Leadership in open
collaborative innovation endeavours, such as in open-source blockchain projects, entails
both relational and task-oriented leadership behaviours (Mu et al., 2019), but the relationships
are more prominent than task orientation. In the decentralised blockchain ecosystem, the role of
ecosystem orchestrators becomes paramount, warranting further study.
This paper discusses how construction actors are organised in the blockchain
ecosystem. Because blockchain technology can be conceptualised as a systemic
innovation, a macro theory was selected as a sensitising lens to discuss its technological
innovation in construction. Departing from other studies looking at the environment of
blockchain (Clohessy and Acton, 2019; Badi et al., 2021), we look at blockchain as a meta-
organisational ecosystem (organisation of organisations). Seeking to understand to what
extent blockchain influences the openness and closedness of innovation ecosystems in
construction and how the blockchain ecosystem is orchestrated, the study addressed the
research questions (RQ):
RQ1. How open or closed is the blockchain innovation ecosystem in construction?
RQ2. Who are the emerging orchestrators of this innovation ecosystem?
The rest of the paper is organised as follows. The ensuing section presents the theoretical
background of the work and relevant literature. In the third and fourth sections, the
methodology and the data are presented, respectively. The paper concludes with a discussion
of findings section, including theoretical contributions and practical implications, and
concluding remarks.

2. Theoretical background
2.1 Innovation ecosystems
The current digital economy relies predominantly on innovative solutions using the power of
data. Innovation typically refers to activities leading to the commercial introduction of
something new. Novelty refers to new products or processes, radically departing from past
practice (Abernathy and Clark, 1985). Novelty could also be based on new combinations of
past practice, constructed within social networks (Schumpeter, 1982). Apart from novelty,
innovation is firmly based on the premise of commercial deployment and profit from it
(Teece, 1986). Therefore, the innovation generation skills are different from innovation value
capturing skills, and both innovation generation and value capturing processes are equally
important to innovation. Innovations fail when innovators fail to capture their returns, and it
is often complementary assets outside/around the firm boundaries, such as marketing, sales
or manufacturing capability, required to enable successful commercialisation of an
innovative idea.
 The Schumpeterian (1982) ideas of innovation as re-combination across and within social Blockchain
networks and systems become increasingly relevant. In business, “ecosystem” provides an innovation
attractive metaphor to describe a range of value, creating interactions and relationships
between interconnected organisations, for example, business ecosystem (Moore, 2016).
ecosystems in
Ecosystem is a network of organisations linked to or operating around a focal firm or construction
platform (Moore, 1993). Ecosystems are collaborative, dynamic, evolving and purposive
constellations in which participants co-create value and include also policymakers, regulators
and competitors, who are traditionally absent from network considerations and beyond the 675
span of managerial control. Adner (2006) stressed the importance of innovation ecosystems in
innovation strategy recognising that most breakthrough innovations fail in isolation, but
instead need complementary innovation and critical supporting elements to attract
customers and users.
An innovation ecosystem is a network of interconnected organisations, connected to a
focal firm or a platform, that incorporates both production and use side participants, creating
and appropriating new value through innovation (Autio and Thomas, 2014). The ecosystem
construct is distinguished from the value chain and supply chain constructs by its non-linear
aspect, as it includes both vertical and horizontal relationships among actors. Typically,
ecosystem boundaries are hard to define, especially in digital innovations that are unbounded
(Yoo et al., 2010) and interdisciplinary (Lyytinen et al., 2016). Following the above, a
blockchain innovation ecosystem can be defined as a network of interconnected
organisations, connected to a focal blockchain platform, creating and appropriating new
value through it. Especially in the construction sector, its innovation ecosystems are
dominated by main contractors who control construction contracts, the multi-tiered supply
chain (including designers, engineers and manufacturers) and the relation with the client or
owner of assets. Importantly, in some countries, the government is the largest client, for
example, the UK government is responsible for 40% of construction projects, whose strategic
priorities shape the innovation scene. Although the construction industry structure is
traditionally adversarial (e.g. competing on lowest price) and very hierarchical, there is a
recent transition towards more innovative business models across the sector (Hall et al., 2020;
Papadonikolaki, 2018).
Consistent to ecosystem thinking, there are two main types of innovation: closed and open,
linked to the proliferation of open-source code (West, 2003). Closed innovation relates with
proprietary systems that do not allow developing or using complementarities between
systems. OI relates to innovation outside the firm boundaries, and its principles, explained by
Chesbrough (2003), show that innovation may originate outside the firm boundaries, use
external research and development (R&D) outputs such as patents, open-source code and
create new business using both internal and external ideas and promote licensing of own IP to
profit from others using it. Table 1 shows open and closed innovation principles. An OI
ecosystem consists of: OI, innovation systems and business ecosystems (Chesbrough and
Appleyard, 2007). Typically, a digital platform is essential to make a digital innovation
ecosystem work as it aligns various actors to achieve a mutually beneficial purpose, and it
can be used for both creating and capturing value. However, when the goals of ecosystem
firms are divergent, OI is not uniformly superior to closed innovation (Almirall and
Casadesus-Masanell, 2010). Therefore, understanding the roles of participants in innovation
ecosystems becomes increasingly important.

2.2 Orchestration of innovation ecosystems

In innovation ecosystems, the control or coordination may reside with a single company, a
collection of firms, a consortium or a not-for-profit organisation (Chesbrough and Appleyard,
2007). The interdependence among ecosystem participants challenges how ecosystems are
IMDS Categories of principles Closed innovation principles Open innovation (OI) principles
123,2
Human resources (HR) The smart people in the field work for Not all the smart people work for us, so
us we must find and tap into the knowledge
and expertise of bright individuals
outside our company
Research and To profit from R&D, we must discover External R&D can create significant
676 development (R&D) it, develop it and ship it ourselves value: internal R&D is needed to claim
some portion of that value
Commercialisation If we discover it ourselves, we will get it We do not have to originate the research
to the market first to profit from it
Business models The company that gets an innovation Building a better business model is better
to the market first will win than getting to the market first
Idea creation If we create the most and the best ideas If we make the best use of internal and
in the industry, we will win external ideas, we will win
Intellectual property We should control our intellectual We should profit from others’ use of our
Table 1. (IP) property (IP) so that our competitors IP, and we should buy others’ IP
Principles of open and do not profit from our ideas whenever it advances our business model
closed innovation Source(s): Adapted from Chesbrough (2003)

coordinated and managed. This implies various ecosystem roles and associated activities and
the importance of ecosystem orchestration. Chesbrough (2008) defined orchestrator as the
role of those who orchestrate knowledge assets, complementary assets and IP to
commercialise innovation. Dhanaraj and Parkhe (2006) defined orchestration as “deliberate
actions” undertaken by a central hub firm, to ensure the creation and extraction of value. Key
orchestration processes are managing (a) knowledge mobility, (b) innovation appropriability
and (c) network stability (Dhanaraj and Parkhe, 2006). Knowledge mobility relates to
maximising value creation by ensuring that specialised knowledge of each member is not
locked within its organisational boundaries. Innovation appropriability relates to capturing
profits generated by innovation (Teece, 1986), including the use of patents, copyrights and
trademarks (Chesbrough, 2008). Network stability refers to dynamic stability with non-
negative growth rate while allowing for entry and exit of network members.
Equally, the Dhanaraj and Parkhe (2006) view of ecosystem orchestration implies a sense
of contractual control across the ecosystem relating more to closed innovation than to OI.
Indeed, innovation may have formal management through ownership-based control devices
or informal coordination mechanisms (Autio and Thomas, 2014). Reypens et al. (2019)
described the Dhanaraj and Parkhe (2006) view of orchestration as “dominated” and enforced
by contracts as opposed to consensus-based orchestration. They defined network
orchestrator engaging in mainly three practices: connecting, facilitating and governing
(Reypens et al., 2019). Through “connecting”, the orchestrator identifies potential members
with desired capabilities and recruits them into the network, formally (through contracts and
agreements) or informally. By “facilitating”, the orchestrator provides a platform where the
members interact with each other or combine their capabilities, ensuring that their goals and
motivations of members are aligned. By “governing”, the orchestrator puts appropriate
governance arrangements in place, such as setting up collaborative structures, defining
milestones and deliverables, to control and coordinate the activities in the ecosystem to
ensure the achievement of desired outcomes.
From the spectrum of “dominated” to “consensus-based orchestration”, Reypens et al. (2019)
propose the idea of hybrid orchestration as orchestrators switch from one mode to the other
responding to emergent network challenges. When studied longitudinally, orchestrators were
found to change their behaviours from “engagement” to “connection”, and “co-development” to
“progress”, from simply assembling members to create value and achieve strategic growth Blockchain
(Paquin and Howard-Grenville, 2013). Evolving orchestration behaviours suggest a hybrid innovation
approach, as orchestrators’ role and innovation continuously evolve. Apart from evolving
orchestration behaviours in innovation ecosystems, roles also evolve and beyond the
ecosystems in
traditional roles of hub firms, members and intermediaries, for example, business incubators construction
and venture associations (Dutt et al., 2016; Giudici et al., 2018), emerge. Table 2 summarises key
roles and characteristics of open, hybrid and closed ecosystems.
677
2.3 Blockchain innovation ecosystem in construction
Blockchain technology has been thought as the most important invention since the Internet
(Tapscott and Tapscott, 2016). However, inventions are different from innovation, in terms of
the need of the latter to carry value. Blockchain applications struggle to be considered
valuable innovations, despite the hype (Hunhevicz and Hall, 2020; Perera et al., 2020).
Blockchain is a form of distributed ledger technologies (DLTs) (Li et al., 2019), a database that
exists across several locations or among multiple participants. Contrary to centralised
databases on fixed locations, a distributed ledger is decentralised and reduces the need for a
central authority or intermediary to process, validate or authenticate transactions (Nawari
and Ravindran, 2019; Hunhevicz and Hall, 2020). Blockchain also allows transactional data to
be recorded chronologically in a chain of data blocks using cryptographic hash codes (Perera
et al., 2020). When a transaction is registered on blockchain, the transaction is packed with
other transactions in a block, and the validator nodes or miners – computers nodes connected
over a specific blockchain network – analyse the transaction and validate the block via a
predefined consensus protocol.
Due to of the ability to store immutable data and verify transactions, blockchain is an
attempt in addressing the global decrease in trusting the Internet and the underdeveloped
trust in decentralised technological solutions (Calcaterra and Kaal, 2020). Trust is a
ubiquitous concept in psychology, sociology, philosophy and business. In business, trust
influences corporate activity and interaction (Gulati and Nickerson, 2008), and high level of
trust increases efficiency in business relations. Therefore, interorganisational relations and

Closed innovation Hybrid innovation

ecosystem ecosystem Open innovation ecosystem

Relations Contractually dependent Semi-independent and Independent firms

or semi-independent independent firms
firms
Orchestrator Hub firms Hub firms or Intermediaries, e.g. business
type intermediaries incubators and accelerators,
venture associations
Orchestrator Large corporations Varying sizes Varying sizes (including
size (for profit) non-profit)
Member Member firms, partners, Member firms, partners, Member firms
relations supply chains supply chains
Member size Varying sizes Small and medium Small and medium enterprises
enterprises (SMEs) (SMEs)
End goal Collective innovation Innovation goal and Independent search and pursuit
goal independent business of business opportunities
opportunities Table 2.
Key references Dhanaraj and Parkhe Reypens et al. (2019), Dutt et al. (2016), Giudici et al. Composition of closed,
(2006) Paquin and Howard- (2018) hybrid and open
Grenville (2013) innovation ecosystems
IMDS constellations, such as supply chains and ecosystems, are often considered key application
123,2 areas for blockchain. Because blockchain as a distributed technology shapes and is shaped
by various participants such as accessors, participants, miners and regulators, developers/
start-ups, large companies trialing blockchain-based operations, think-tanks, non-profit
consortia, research organisations and others, it is associated with interorganisational
constellations. Blockchain is considered key enabler of digitalisation of supply chains and
logistics (Gupta et al., 2020) as many supply chain theories can be adapted for blockchain
678 technology (Treiblmaier, 2018). Treiblmaier (2018) demonstrated the shortcomings of
neoclassical economic theories such as principal agent theory (PAT), transaction cost
analysis (TCA) in addressing human behaviour, resources and dynamic relationships over
theories such as resource-based view (RBV) and network theory (NT). Qian and
Papadonikolaki (2020) have demonstrated how blockchain-based smart-contracts change
the nature of trust in construction supply chains from relational to technological trust.
Blockchain is an important technology in construction as it complements BIM and IoT
with various applications across the project life cycle across cities, energy, property,
transport and water sectors (Scott et al., 2021; Elghaish et al., 2021; Sacks et al., 2020). The
fragmented nature of construction procurement shows that main contractors take ownership
of innovative solutions, and SMEs struggle to address skills shortages and financial liquidity.
Nevertheless, blockchain in construction has been used in the digitisation of material flows to
complete material information of a built asset, for example, in material passports (Li and
Kassem, 2021). Blockchain has demonstrably been applied in project bank accounts (PBAs) to
ensure fast payments for SMEs, hence bypassing the dominance of contractor in delaying
payments and allowing liquidity to SMEs and asset tokenisation for supporting project
financing through crowdfunding for raising funds for shared ownership (Tezel et al., 2021).
These changes show a transition towards a less paper-based and more trusting sector.
Alongside private organisations and their pilot projects with blockchain, blockchain
consortia emerge for different industries globally (Barima, 2017), governments across the
world trail trial blockchain for public funds (Anjum et al., 2017) and multinational
organisations like the North Atlantic Treaty Organisation (NATO) and European Union (EU)
show interest in it (Houben and Snyers, 2018).
Blockchain protocols are classified over two dimensions, anonymity (public/private) and
consensus (permissionless/permissioned), with advantages and disadvantages (Tezel et al.,
2020). Public ledgers allow anyone to read a ledger, whereas private ledgers allow only
specific members to access transactions. Permissionless nodes allow anyone to set up a node
and interact with the ledger, for example, by adding transactions or participating in the
consensus mechanism. Public and permissionless DLT are more decentralised. Mu et al.
(2019) challenged the role of online leadership in open collaborative innovation in public
versus private blockchain solutions and concluded that relation-focused leadership
embedded in social capital prominently supports open collaborative innovation success.
Moreover, they discovered that the joint effects of technical contributions, internal social
capital and open community commitment positively impact open collaborative innovation
success (Mu et al., 2019). However, simultaneously, Mu et al. (2019) explained that openness
not only encourages wide participation, but also constrains the commercialisation of
blockchain open-source projects and thus threatens the innovativeness of blockchain. This
paper discusses the openness or closedness of blockchain innovation ecosystem and how its
orchestration can support industry change.

2.4 Research gap

This study aims to clarify the extent of the openness or closedness of blockchain innovation
ecosystem in construction, factoring in its nature (private/public), consensus mechanisms
and industry structure. On the one hand, well-known initiatives such as cryptocurrencies, Blockchain
Bitcoin and Ethereum are open ecosystems, governed by public permissioned blockchains. innovation
On the other hand, Treiblmaier (2020) suggested that private permissioned blockchains
governed by private consortia imply closed ecosystems and are better described as
ecosystems in
centralised, seen in initiatives such as IBM, Hyperledger, R3 Corda and Tezos. In construction
construction, various large companies and SMEs explore the blockchain space and
consider its adoption to reap benefits mainly related to transparency, trust and traceability of
assets. Large companies are more likely to adopt blockchain and lead R&D activities 679
(Clohessy and Acton, 2019). Equally, Clohessy and Acton (2019) explained that technological
aspects, organisational setting and blockchain environment are important for blockchain
adoption, but regulation is top factor overpassing others, followed by market dynamics.
Similarly, around smart contracts in construction, Badi et al. (2021) discovered that the
environmental setting is significant. Therefore, the existing construction industry dynamics,
dominated by large companies and government regulation, are key determinants of the
blockchain innovation ecosystem and warrant further investigation.
Large organisations willing to spearhead blockchain in construction tend to adopt more
controlled/permissioned type of blockchain arrangements, which may be limiting and risk
underachieving the sectoral change expected with blockchain (e.g. autonomous
organisations, improved collaboration) in the long run (Tezel et al., 2020, 2021). This is
because the more controlled/permissioned a blockchain arrangement, the more akin it is to
a distributed database controlled by a select few. This will also create technology
gatekeepers with implications on project management, project governance, project
financing, SMEs and other sector players, as the gatekeepers retain their position and
the status quo. For a “healthy” unfolding of blockchain in construction, and to reap its
envisioned and rather revolutionary benefits fully (admittedly comes with embracing also
the less controlled and more public arrangements), it is important to understand how this
innovation ecosystem works and what it is composed of. Previous studies have emphasised
the importance of human behaviour, resources and dynamic relationships for
understanding blockchain technology from a distributed view, as various members such
as accessors, participants, miners and regulators are involved (Treiblmaier, 2018). In this
distributed ecosystem, various actors step up and play different roles, either as leaders or
ordinary members, and there are a few contenders about the potential orchestrator of this
innovation ecosystem. The originality of this paper is on focusing on the much-needed view
of the ecosystem level and its orchestration. Following these views, theories of OI and
ecosystem orchestration are used to analyse the empirical fieldwork. To sum up, the paper
discusses the paradigm of blockchain by considering it as an ecosystem and concludes with
propositions for rethinking the role of construction actors in leading change for digital
construction.

3. Research methodology
3.1 Methodological underpinnings
This study follows Saunders et al. ’s (2007) “research onion” approach to demonstrate how
research philosophy was operationalised into appropriate methodological options. First, in
terms of research philosophy, and as ecosystems concern actions and interactions among
various actors, this study sets off from a constructivist ontology, considering ecosystems
as value-creating interactions and relationships among interconnected organisations
(Moore, 2016). Additionally, given that blockchain as an innovation concerns creativity,
invention, but also value creation for various actors (Teece, 1986), we adopt interpretivist
epistemology to understand how the value of blockchain innovation ecosystems is
perceived by the said actors. Second, regarding theory development, the theoretical
IMDS framework has been inspired by the OI and ecosystem orchestration theories, and the
123,2 research employs inductive reasoning to move from fieldwork to emerging patterns of
tentative propositions (Arthur, 1994), seeking consistent set of mental models from expert
informants on the topic.

3.2 Data collection

680 The study is based on a mono-method qualitative approach, with data collected through
interviews. Because the second research question is on the roles of emerging orchestrators
in blockchain innovation ecosystems, qualitative data were deemed more appropriate, as
there is little archival data on the topic and a general lack of quantitative data from
businesses and such ecosystems. Data were collected by asking questions orally to
individual interviewees (DiCicco-Bloom and Crabtree, 2006). To allow for researchers’
freedom and the emergence of patterns in data, the interviews were semi-structured. This
flexibility allowed researchers to adjust pace and interview content to topics that the
interviewees were better-versed in.
The interview protocol included briefing the interviewees about research aims,
important keywords related to the study and the nature of the interview questions. There
were only eleven questions, and the interviews lasted 22 min–72 min, depending on the
interviewees’ replying pace of. The questions were about the professional background
and experience of the interviewee, about how blockchain technology was affecting the
openness/closedness of the ecosystem and the emerging roles of orchestrators in the
innovation ecosystem. Appendix shows the full list of interview questions. Data
collection took place between November 2018 and May 2019. Most interviews (n 5 23)
were conducted face-to-face in the university or organisations, and some (n 5 12) were
conducted online. Following the study’s ethical considerations and confidentiality policy,
all interviewees were informed that they and their organisations would be
pseudonymised. All interviews were audio recorded with the express consent of the
interviewees and then transcribed.
The interviewee selection criteria were crucial. The interviewees were from a global
sample with experts from the United Kingdom (UK), Sweden, United States of America (USA),
Germany, France and Spain. In total, 23 subject experts participated, initially through
purposeful sampling of individuals active in blockchain implementation and research, and
then snowballing to expand the number of interviewees. The initial interviewees who were
recruited from the authors’ professional networks helped identify other potential
interviewees meeting the sampling criteria. Depending on their professional background,
experts were selected for their high (a) familiarity with blockchain, (b) engagement with
digital technologies in construction and (c) professional experience in construction or
technology space. Table 3 describes their profiles.

3.3 Data processing and analysis

To respond to RQ1 regarding nuances between openness and closeness of the blockchain
innovation ecosystem in construction, a more deductive data analysis method was followed.
Using the OI principles shown in Table 1 of HR, R&D, commercialisation, business models,
idea creation and IP as deductive or top-down codes, the data were analysed searching for
patterns to fit the codes. RQ2 refers to roles of the various members in the innovation
ecosystem, seeking to understand who are the emerging orchestrators of OI ecosystems, and
the data were analysed in an inductive qualitative manner through inductive and in vivo
coding. Qualitative content analysis (QCA) was used to systematically describe the meaning
of qualitative data (Hsieh and Shannon, 2005). QCA was done through analysing with coding,
a systematic approach to manage, store, identify and sort data interpretations (Bazeley, 2013;
 Interview Interview
Blockchain
ID Position Organisation Industry Location type* duration** innovation
ecosystems in
1 Director BIM consultancy Construction UK F2F 38
2 Director Entrepreneur Technology UK F2F 35 construction
3 Founder Client Construction USA F2F 50
4 Principal Architecture and Construction UK F2F 42
Law Consultancy 681
5 BIM leader Design and Construction UK F2F 30
Engineering (D&E)
Consultancy
6 Reader University Higher UK F2F 75
education
7 Consultant D&E consultancy Construction Germany F2F 52
8 Consultant D&E consultancy Construction UK F2F 58
9 Consultant D&E consultancy Construction UK F2F 60
10 Director Law consultancy Construction UK F2F 43
11 Senior consultant D&E consultancy Engineering UK OM 38
and
construction
12 Director Blockchain Construction France OM 42
development
13 Vice-president Blockchain Construction USA OM 36
foundation
14 CEO Blockchain Construction UK OM 37
technology
company
15 Senior tesearcher Research institute ICT Sweden OM 67
16 Head of VDC Client Construction Sweden F2F 30
infrastructure
17 Sustainable Client Construction Sweden OM 22
development
responsible
18 Head of DLT Innovation Centre/ Multi/ICT UK OM 45
Institute
19 CEO DLT service ICT UK OM 40
provider
20 Director of D&E consultancy Construction USA OM 45
research and
development
21 Business and D&E consultancy Construction USA OM 35
technology analyst
22 Business D&E consultancy Construction Spain OM 20
consulting and
innovation partner Table 3.
23 Senior associate Management Construction UK OM 55 Identifiers (ID) and
Consultancy profiles of interviewees
Note(s): *F2F: Face-to-face, OM: Online meeting, ** in minutes and interview details

Saldana, 2009). The interview data were coded into themes using both inductive (emerging
from the data) and deductive (emerging from the theoretical background) or a priori codes
(Saldana, 2009). The inductive codes focused on comparing and contrasting the data to
discern patterns of interpretations (Bazeley, 2013). The deductive codes were used to assign
the pieces of data to codes (Saldana, 2009). The combination of these approaches provided
interpretative flexibility to the research.
IMDS 4. Findings
123,2 4.1 Blockchain innovation ecosystems in construction
The data showed varying degrees of applicability of the OI principles by Chesbrough (2003).
Following a deductive coding approach, this OI theoretical framework was used to evaluate the
openness and closeness of the ecosystem, responding to a theoretically informed questions.
Overall, whereas some principles such as HR and idea creation, are widely understood, others
such as creating new business models for OI and profiting from external IP are still in their
682 infancy. Table 4 presents the applicability of the OI principles to blockchain in construction and
shows how many interviewees aligned with each principle. In the next paragraphs, quotations
from the interviewees are given and attributed as “Int-ID” (based on IDs shown on Table 3).
4.1.1 Human resources (HR). Almost all interviewees recognised that new skills are
crucial for blockchain technology and that firms need to tap into the expertise of bright
individuals outside their boundaries. The findings supported the argument of finding and
training the best skills for OI. Some interviewees focused more on soft skills needed and
necessary mental shift accompanying new introduction of the technology. As Int-12 stated:
“It is not about skills, it’s about mentality having people open to work together on new topic and
also test. There is a pioneer’s spirit about blockchain”, supported by Int-14: “I think it’s more of
a mindset than a skillset, actually”. Similarly, Int-16 recognised that due to silos in the industry,
there is a “need to get everybody in the same area and really collaborate”. Following a more
socio-technical and pure OI approach, Int-7 explained:
You need people that first of all understand these new technologies and new paradigms, for large
companies it totally makes sense to have those people in-house, and combine this knowledge with a
good understanding of the challenges of the construction industry. (. . .). And you could also hire
people and you could buy this knowledge from external parties.
4.1.2 Research and development (R&D). Most interviewees recognised that OI requires the
combination of internal and external R&D, and they aligned with various open-source

Indicative
Closed Open interviewee Indicative interviewee
Categories of innovation (CI) innovation (OI) arguments in support arguments in support
principles principles principles of CI of OI

Human resources 1 22 Not a huge difference We need to find and

(HR) from how we manage train the best skills
it today
Research and 3 20 We have our own We take advantage of
development (R&D) dedicated R&D developments from
departments open consortia
Commercialisation 3 20 Government needs to Blockchain ecosystems
help us internalise are useful in the pre-
these initiatives competitive stage
Business models 9 14 Construction firm Businesses need to
protect existing align with technology
business models
Idea creation 0 23 N/A We take advantage
of ideas around
blockchain
Table 4.
Applicability of open Intellectual property 11 12 Construction does Blockchain needs
innovation principles (IP) not have the culture companies sharing
(see Table 2) to of sharing data their data
blockchain in Total interviewees 23 23 N/A N/A
construction Note(s): N/A: Not Applicable
initiatives such as Ethereum or even hybrid solutions such as Hyperledger. Some focused on Blockchain
developing new ideas in-house by aligning to existing closed and proprietary systems, such innovation
as Autodesk around BIM: “we integrate the blockchain within the current ecosystem of the
software, namely Autodesk Revit user community” (Int-12). Int-20 agreed that “the biggest
ecosystems in
changes that needs to happen to the industry (. . .) is (. . .) to start approaching this [R&D] from construction
a collaborative mindset (. . .) as a team”.
4.1.3 Commercialisation. Most interviewees resonated with the ideas of OI for profiting
from innovation in a pre-competitive stage through OI ecosystems. Int-2 stated that: “the pre- 683
competitive model is, ‘Hey, there are a bunch of things that we all need to collaborate on; without
those things we cannot do the competitive things’. So, building that pre-competitive model and
ecosystem is primary to making this work”. The potential of OI was seen as enabling
sustainable practices and allowing “feasibility studies and predevelopment work for
sustainable global infrastructure projects (. . .) to get kick started off the ground. This helps
public communities around the globe, raises standards of living and makes life easier for people
that are living in large metropolitan areas” (Int-13). Others focused more on the existing
competitive practices of firms protecting their innovations, hoping to profit more when they
were ready to market. As Int-3 explained:
It’s a zero-sum game, always, in the US. If you have a project, I’m losing a project. If you’re having
new technology, I’m losing a new technology, where (. . .) in many other areas there are opportunities
happening right now to get further integrated through more of an idea of cooperation versus
competition. Competition is necessary, but at what end?
4.1.4 Business models. The data around business model change for blockchain innovation
ecosystems were mixed. Only half of the interviewees indicated that business model change
was needed to engage in OI blockchain ecosystems. This was demonstrated by the statement
that blockchain solutions should focus on reducing costs in the existing closed industry
structure (Int-18) rather than rethinking the traditional procurement system. Int-12 stated
that “construction is less innovative than banking and like them they want to protect their
business model”. Equally, Int-2 stated that “defining those business cases where it’s not just
about an isolated one company doing it, it’s saying, ‘Well, if we did this across a particular group
of companies, that’s when the benefit comes.’ (. . .) They’re not interested in the ecosystem;
they’re interested in their own business case”. According to Int-2: “Part of the challenge of
blockchain, it’s not about blockchain. It’s really more about where are the business problems
right now that you can solve”. Some concrete solutions focused on: “the potential for
subcontractors to get paid faster which helps small businesses with their cash flow and keeps
them engaged in the project to finish project faster” (Int-13).
Contrariwise, the interviewees recognised how OI in blockchain could allow for shorter
supply chains (Int-17) and removing intermediaries (Int-14): “allowing smaller actors to work
together in the project not being so dependent on the huge companies that hold everything
together like the risk and public management. (. . .) It’s another thing if could ever be realized.
Because there is probably a threat that could be to current business models” (Int-17).
Int-14 added:
By using smart-contracts, payments could be milestone-based. Companies will be able to hold
supplier payments funds in escrow using smart-contracts – once a certain parameter has been
achieved, the payment is automatically released to the supplier. Therefore, introduction of smart-
contract-dependent protocol could completely revolutionise how the entire process is managed.
4.1.5 Idea creation. All interviewees agreed that to succeed in blockchain innovation
ecosystems – whether closed or open – they need to make the best use of internal and external
ideas. They were open to align with OI projects such as Ethereum and use open-source
solutions (Int-2) in their innovations: “You need to get everybody in the same area and really
IMDS collaborate” (Int-16). Int- 13 explained that idea creation in blockchain space is more difficult
123,2 than in other traditional developing frameworks: “If an organisation is going to be looking at
blockchain, there is going to be looking from development perspective and new skills sets in terms
of development platform while working with blockchain developers and technical people will start
looking at”. According to Int-8, as a solution to this challenge, the appropriate blockchain
innovation ecosystem could look like:
684 . . . an ICO or some sort of Cloud fund, blockchain-based one where you have lots of smaller
companies, small to medium companies are the funders, so maybe they collaborate together to bed
down a project and they kind of share the resources and they all kind of go for that project . . ..
4.1.6 Intellectual property (IP). The feedback from the interviewees about IP and its role in
blockchain innovation ecosystems was mixed. On the one hand, the interviewees did not see
the need to open and share their IP for developing blockchain-enabled solutions as Int-15
stated: “I do not actually believe that the construction industry understands what the blockchains
are without sharing data”. Similarly, Int-1 mentioned that with blockchain, “it will be easier to
protect intellectual property”. Int-8 shared that the relation between blockchain and IP may
have legal implications and that “access to right on a particular blockchain-based address
might be limited to certain people who are trustees maybe, I image that would be a case to avoid
any legal issues”. On the other hand, others supported an “open-source solution personality
rather than let’s make it proprietary, put it in our closet and never let any other firm” (Int-20).
There were suggestions of “federated blockchain where companies share data. The traditional
design and build contract system is pretty outdated” (Int-19). Similarly, Int-2 explained key
ideas of sharing IP across blockchain innovation ecosystems:
So there are a bunch of characteristics around ecosystems that need to be put into place; one big one
is that you have to build a bunch of open-source protocols, and they have to be open-source, you have
to build a bunch of open-source data standards and collaborate with them. You have to build an
ecosystem where you get participants to contribute to building the ecosystem and the network rather
than thinking about proprietary stuff.

4.2 Orchestration of blockchain innovation ecosystems

From above, Table 4 showed mixed results in terms of how open or closed blockchain
innovation ecosystems in construction are. The data showed three main types of blockchain
innovation ecosystems: (1) open, (2) hybrid and (3) closed. For each of these innovation
ecosystems, there were different technological principles used, value created and preferred
orchestrators. Regarding technological principles, there exist prominent blockchain
platforms with different characteristics (public/private – permissioned/permissionless)
whose features apply to all sectors adopting blockchain, including construction. Table 5
summarises key characteristics of the three emerging blockchain innovation ecosystems and
their orchestration.
Regarding the orchestrator of blockchain innovation ecosystems, there were two main
patterns revealed. First, with regards to open and hybrid innovation ecosystems, consortia
were mentioned as potential orchestrators. On the one hand, Int-18 stressed how consortia
need to take over this new role as the existing business model is based on competition and
transactional focus only: “Yes, so actually it’s outside the construction industry, it’s not
transformation inside the construction industry (. . .), because at the moment there’s this winner
takes all approach that if you use in my Blockchain I’m going to keep adding value, I’m just going
to charge you per transaction and I’m going to make billions. (. . .) instead, it has to be built as a
consortium effort with the industry hand in hand” (Int-18). On the other hand, Int-2 explained
examples from other industries where consortia were not productive in orchestrating the new
innovation ecosystem:
Innovation ecosystem Business ecosystem Preferred orchestrator
Blockchain
innovation

Open innovation ecosystem, e.g. public Business model: non-profit Open-source ecosystems in
blockchain platforms such as Business case example: blockchain for consortia (4)
Ethereum tracking accountability in design  Large companies (3) construction
provenance  Owners and
New value created maintenance (2)
 Collective/community goals* (9) 685
Hybrid innovation ecosystem, Business model: Non-profit or for-profit  Software vendors (1)
e.g. permissioned blockchain such as Business case example: Blockchain-  Insurance firms (1)
R3 Corda based BIM platforms  Communities (1)
New value created  SMEs (1)
 Collective/community goals* (3)  Contractor (1)
 Individual/commercial goals** (3)  New organisations
formed (1)
Closed innovation ecosystem, Business model: For profit  Contractor (5)
e.g. Hyperledger Fabric private and Business case example: Blockchain-  Tech companies (1)
permissioned blockchain (also known based platform for streamlining real  Owners and
as enterprise blockchain) estate transactions Mmaintenance (1)
New value created
 Individual/commercial goals** (5)
 Collective/community goals* (2)
Note(s): *Collective goals in value creation relate to how more than one member of the ecosystem will be Table 5.
benefitted Emerging blockchain
**Individual goals in value creation relate to how only one member of the ecosystem will be benefitted innovation ecosystems,
commercially their orchestrators and
In brackets, the number of interviewees supporting the idea is shown roadmap to change

If you’re trying to do things by committee, one of the biggest problems is, if you’ve got banks paying,
in this case, for R3, banks are paying a lot of money, they want their pound of flesh; they want, ‘I put
$2m in, I want to be on the steering committee and I want to drive the direction’. So, when you try and
get a bunch of guys who are all equal who all want what they want in a room. (. . .) They’re all saying,
‘Well, I want my requirements, I want my requirements’, and so what you get is a lowest common
denominator of requirements.
The second trend was related to closed innovation ecosystems, where traditional actors were
considered as appropriate for leading them. Int-4 explained that contractors would be
appropriate to orchestrate them as they stand to gain more: “Contractors work under very
small margins. So, anything that makes it more efficient, things can happen quicker, you can
find out things quicker, it’s definitely going to be win-win for them. (. . .) Because as I’ve said, for
them, they’re the ones who actually apply things on site. (. . .) I would say they’re the ones who
would benefit, not necessarily control it”. Int-16 shared that clients needed to orchestrate these
new ecosystems and drive them: “I think it will be harder because they probably do not see the
same value. If the clients do not initiate this, it will never happen. We are relying on the clients
especially on the smaller projects”. Whereas Int-7 shared that “Blockchain cannot be looked at
separately, it has to interact with a number of existing technological initiatives within
construction. Remobilising resources. So, I think the government really, the industry, need to do
something about it”.
The dominant orchestrating role of contractors was also mentioned in conjunction
with hybrid innovation ecosystems. The hybrid approach contained varying responses
around the orchestrators, and the orchestration approach was vague. Int-19 suggested
that new digital-savvy organisations would be formed to replace the traditional role of
contractors.
IMDS 4.3 Emerging relations
123,2 Many of the interviewees (Int-1, 4, 7, 9, 11, 12, 16, 21, 23) believed that new business models are
not needed for blockchain. These same respondents indicated contractors and large
companies as their preferred orchestrators. This may be due to the perception that these
organisations generally have better exposure to and control over the whole supply chain with
a higher capacity of creating networks and interaction in the extant business models. Being
the more powerful actors in project delivery, whose priorities often shape the decision-
686 making, those interviewees see the client as dominant. The blockchain use case expectation of
those interviewees is also frequently operational at a project level, and project and supply
chain management focused (e.g. payments, smart contracts, logistics and supply chain
tracing).
Contrariwise, the interviewees who supported the need for new business models expected
a comparatively broader set of blockchain drivers such as governments, consortia, financiers
or large companies with a sectoral and cross-sectoral reach. Aligning with new business
models, their views on orchestrators are also more varied involving open-consortia, new
organisation types to be formed, communities, SMEs and technology companies. Regarding
use cases, they often referred to a generic “blockchainification” of data beyond operational
and project management focused applications.
A summary of the findings is illustrated in Figure 1. In the construction industry, large
companies as orchestrators need to find and train the best skills regarding blockchain
technology for OI. Concerning R&D approaches, companies should take advantage of
developments from open-source initiatives. As for commercialisation ideas, companies profit
from innovation in the pre-competitive stage through OI ecosystems by utilising open-source
solutions. Regarding business models, OI in blockchain can allow for shorter supply chains
and remove intermediaries by using smart contracts. Regarding idea creation, companies
nurture new skills in terms of platform development by taking advantage of ideas around
blockchain from the ecosystem. Concerning sharing IP, companies can build open-source
protocols and standards and collaborate over them. In OI for blockchain as meta-
organisational ecosystem, legitimisation and deployment strategy, guidance to SMEs,
endorsing blockchain by trial and pilot projects, legalisation of cryptocurrency, support of
research, legislation, contracts, standards and incentives concerning stronger government
involvement are the examples of needed policy change.

5. Discussion
5.1 Open innovation ecosystems in construction
Digital technologies such as blockchain gain traction in construction. This study focused on
the emergence of blockchain innovation ecosystems. This study set out to explore how open
or closed is the blockchain innovation ecosystem in construction (RQ1) and who are the
emerging orchestrators of this innovation ecosystem (RQ2). By using the OI principles by
Chesbrough (2003) as a deductive set of codes and an analytical lens, the study revealed the
six OI principles were not addressed to the same extent in the data from the expert
interviewees (answer to RQ1). To this end, although some conditions exist for OI blockchain
ecosystems, not all principles are recognised.
There were four OI principles supported in the data. Firstly, in terms of HR, the findings
were consistent with previous studies (Valdez-Juarez and Castillo-Vergara, 2021; Unalan
and Ozcan, 2020) supporting the argument that for OI, firms need to find and train the best
skills (Table 4, n 5 22). Secondly, with regards to R&D, the findings were congruent with
OI in requiring a combination of internal and external R&D aligned with various
initiatives such as Ethereum or perhaps Hyperledger. This aligns with the literature, that
companies take advantage of developments from open consortia (Unalan and Ozcan, 2020).
 Blockchain innovation ecosystem in construction
Blockchain Contribution
#333
Human Finding and training the
Resources best skills Blockchain as Meta-organizational Ecosystem
Research & Driver of Blockchain
Open-source initiatives Orchestrator
Development Change
Figure Open
Commercialisation Pre-competitive model Open-source Large Owners & Clients Financiers Government PPP
innovation consortia companies Maintenance
Business Allowing for shorter supply
Hybrid Software Insurance Communities SMEs Clients SMEs Financiers
models chains
vendors firms
innovation Contractors Policy Government
Idea Development perspective
creation and new skills sets Closed Contractors Tech Owners & Clients Government Financiers
innovation companies Maintenance
Intellectual Open-source protocols
Property and standards
Policy change
Legitimisation and deployment strategy Legitimisation and deployment strategy Engagement in conversations
Guidance to SMEs Impeding progress with old rules and laws Change of accounting and auditing

Endorsing blockchain by trial and pilot Not favouring incumbency Upskilling the industry
projects
Alignment with legal system Policies for blockchain adoption in local
Legalisation of cryptocurrency councils
Supportive policy-making
Support research Trial pilot projects
Pilot projects with blockchain
Legislation, contracts, standards, and Endorsing blockchain
incentives Supporting GovTech-focused start-ups
687
ecosystems in
construction
innovation
Blockchain

ecosystem in
Figure 1.

interviews
the data analysed from
construction based on
Blockchain innovation
IMDS Thirdly, commercialisation ideas of profiting from innovation in the pre-competitive stage
123,2 through OI ecosystems also emerged from the data (Table 4, n 5 20), and the interviewees
echoed ideas of firms looking at open-source solutions as ways to profit from new
developments outside the boundaries of their firm. However, the data also showed firms
focused more on protecting their innovations to profit more when they were ready to
market due to constraints in the commercialisation of blockchain (Mu et al., 2019). Fourthly,
the data showed a clear resonance to the OI principles of joint idea creation, making the best
688 use of internal and external ideas. Construction firms are open to aligning with OI projects
such as Ethereum and use open-source solutions in their innovations, as highlighted in the
literature (Li et al., 2019) – that companies take advantage of ideas around blockchain.
There were also two OI principles that were only partially supported by the interviewees,
showing a clear division in the understanding and implementation of open ecosystems. On
the one hand, the data displayed that a significant proportion of the interviewees overlooked
the need for aligning their business models with blockchain technology but instead focused
on the existing ways of doing things in accompanying participation in blockchain ecosystems
(Table 4, n 5 9). This was demonstrated by using blockchain solutions to focus on reducing
costs in the existing industry structure (Int-18), rather than rethinking the traditional
procurement system that could allow for shorter chains (Int-17) and removing intermediaries
(Int-14), as emphasised in the literature – that businesses need to align with technology
(Unalan and Ozcan, 2020; Chong et al., 2019). On the other hand, less than half of the
interviewees did not see the need to open and share their IP for developing blockchain-
enabled solutions. Thus, they sought to protect and close their IP to their competitors (Int-1)
and also did not use external IP in their solutions (Almirall and Casadesus-Masanell, 2010),
even if that could advance their own business model, as pointed out in the literature – that
blockchain needs companies sharing their data, and construction does not have the culture of
sharing data (Maciulien_e and Skarzauskien_e, 2021).

5.2 Emerging orchestrators of construction innovation ecosystem

Based on the aforementioned OI principles, the study showed that there were (1) open,
(2) hybrid and (3) closed blockchain innovation ecosystems. For each of these innovation
ecosystems, there were different emerging orchestrators (answer to RQ2). Project leadership
is very important in blockchain, as Mu et al. (2019), focusing on collaborative innovation
research around blockchain, highlighted the roles of project leaders rather than only ordinary
members and provided evidence that leaders do exist and play a highly influential role. They
suggested that OI project leaders are pivotal when members choose to target open
collaborative innovation projects with their contributions (Mu et al., 2019). Equally, in
blockchain innovation ecosystems, the role of orchestrators is crucial for shaping the
governance mechanisms that form them. Especially in the open and closed innovation
ecosystems, there are clear orchestrators identified. In the former, open-source consortia are
the preferred orchestrators;, in the latter, contractors are the preferred orchestrators.

5.3 Theoretical contribution

The main theoretical contribution of this work is that – to the best of the authors’ knowledge –
this is the first OI study in the construction industry. The OI paradigm has found many
applications in the information technology (Chesbrough, 2003), hardware and software
(West, 2003), power and energy (Greco et al., 2017) and life sciences sectors (Chesbrough and
Appleyard, 2007). An unexpected finding of the study was that by applying the OI theory to
the construction industry, we can identify challenges in applying the theory, especially with
regards to business model innovation, as the interviews did not show any concrete direction in
transforming the existing business models to align with novel technologies such as blockchain.
This unexpected finding shows further research avenues. Nevertheless, the data from the Blockchain
interviewees resonate with the ideas of Adner (2006) on the importance of complementary innovation
innovations in innovation ecosystems that was confirmed by linkages between blockchain and
BIM technologies in construction.
ecosystems in
Business models are an important vehicle for innovation and may be also a source of construction
innovation in and of itself (Massa and Tucci, 2013). To this end, it is surprising that whereas
blockchain is a key technology based on openness and transparency in construction, this is
seen as a mostly closed rather than open system due to the competitive and contentious 689
culture, resistant to business model innovation, so as to align to new technology and not
utilising the developments made available from public blockchains such as Bitcoin and
Ethereum. Resistance to sharing data shows persistent mistrust and lack of a business
mindset, as according to Chesbrough (2007), “a better BM will beat a better idea or
technology”.

5.4 Practical implications

The work puts forward a number of practical implications. First, the data showed strong
implications for policymakers and governments. Especially the UK-based interviewees
expressed that blockchain OI initiatives need to be encouraged and regulated by
policymakers and the government, according to the data shown in Figure 1. Second, in
government-sponsored demonstrator projects, the public client is expected to enforce
blockchain-compliant commercial solutions and ensure transparency in financing projects.
This was especially supported for financing complicated global infrastructure projects
(Int-13). Third, open-source consortia and communities were seen as the potential
orchestrators of such blockchain innovation ecosystems, in the open and hybrid (but not
in the closed) innovation paradigm, and policymakers and the government were seen as the
enablers of such ecosystems (Int-6 and Figure 1). These findings can guide policy
development around blockchain and used as basis of regulatory frameworks for open or
closed innovation ecosystems to leverage the full potential of the technology. Especially in
construction, these ideas could unlock the sector’s adversarial nature.
Finally, in both open and closed innovation scenarios, almost all interviewees concurred
that the SMEs stand to gain more from blockchain innovation ecosystems as they will be
protected, paid in time and gain visibility across the supply chain, even compete with larger
players due to better liquidity. National programmes for the development of blockchain skills
can be initiated by governments to support the SMEs. The OI approach will remove
conventional R&D limitations and create a regulated system to infiltrate external ideas and
breakthroughs to company’s boundaries. Governments could stimulate commercialisation,
expedite digital revolution and support emerging business change. Integrating blockchain
with the existing digital delivery models involving BIM could resolve IP challenges and legal
responsibility for sustainable building design coordination and collaboration throughout the
life cycle phases (Li and Kassem, 2021; Scott et al., 2021). This shows the potential of
blockchain for supporting incremental changes and slow transition of the existing business
models.

6. Conclusion
This study sought out to understand how open or closed the blockchain innovation
ecosystems in construction are, following OI as a theoretical and analytical lens. Blockchain
technology, due to its transparency, traceability and immutability properties, presents an
ideal context for studying OI, as a lot of developments in this domain come from open-source
initiatives and a growing community base. The data showed that construction is primarily
IMDS headed towards an OI blockchain ecosystem (n 5 9), although there are elements of
123,2 hybridisation (n 5 6) and closed ecosystems (n 5 7), such as hierarchical forms of
orchestration and pursuing of individual business goals. To this end, the OI paradigm in
construction is largely misunderstood and not fully leveraged. Still, there was a consensus on
the regulation needed for blockchain in construction and especially aligning with the existing
delivery methods (Table 5).
The data showed a traditional or hierarchical approach to ecosystem orchestration, as
690 contractors were predominantly seen to fulfil this role for the closed innovation paradigm,
followed by asset owners (Table 5). At the same time, the study showed clear indications of
potential orchestrators of OI blockchain ecosystems through open-source consortia. The
government and large clients are seen as drivers of technological change. Paradoxically, data
showed that technological change and innovation are limited by the traditional business
models in the industry that do not allow for “knowledge spillover” effects (see Table 4). In both
open and closed innovation scenarios, the data showed that the SMEs stand to gain more
from blockchain innovation ecosystems as they will be more protected and gain visibility
across the supply chain, which is the first step in transforming construction’s business model.

References
Abernathy, W.J. and Clark, K.B. (1985), “Innovation: mapping the winds of creative destruction”,
Research Policy, Vol. 14, pp. 3-22.
Adner, R. (2006), “Match your innovation strategy to your innovation ecosystem”, Harvard Business
Review, Vol. 84, p. 98.
Almirall, E. and Casadesus-Masanell, R. (2010), “Open versus closed innovation: a model of discovery
and divergence”, Academy of Management Review, Vol. 35, pp. 27-47.
Anjum, A., Sporny, M. and Sill, A. (2017), “Blockchain standards for compliance and trust”, IEEE
Cloud Computing, Vol. 4, pp. 84-90.
Arthur, W.B. (1994), “Inductive reasoning and bounded rationality”, The American Economic Review,
Vol. 84, pp. 406-411.
Autio, E. and Thomas, L. (2014), “Innovation ecosystems: implications for innovation management?”,
in Dodgson, M., Gann, D.M. and Phillips, N. (Eds), The Oxford Handbook of Innovation
Management, Oxford University Press, Oxford.
Badi, S., Ochieng, E., Nasaj, M. and Papadaki, M. (2021), “Technological, organisational and
environmental determinants of smart contracts adoption: UK construction sector viewpoint”,
Construction Management and Economics, Vol. 39, pp. 36-54.
Barima, O. (2017), “Leveraging the blockchain technology to improve construction value delivery: the
opportunities, benefits and challenges”, in Hall, K. (Ed.), Construction Projects: Improvement
Strategies, Quality Management and Potential Challenges, Nova Science Publishers, New
York, NY.
Bazeley, P. (2013), Qualitative Data Analysis: Practical Strategies, Sage Publishers, Los Angeles.
Calcaterra, C. and Kaal, W.A. (2020), “Reputation protocol for the internet of trust”, Legal Tech and the
New Sharing Economy, Springer.
Chesbrough, H.W. (2003), Open Innovation: The New Imperative for Creating and Profiting from
Technology, Harvard Business Press, Boston, MA.
Chesbrough, H. (2007), “Business model innovation: It’s not just about technology anymore”, Strategy
and Leadership.
Chesbrough, H. (2008), “Orchestrating appropriability: towards an endogenous view of capturing
value from innovation investments”, Handbook of Technology and Innovation Management,
p. 335.
Chesbrough, H.W. and Appleyard, M.M. (2007), “Open innovation and strategy”, California Blockchain
Management Review, Vol. 50 No. 1, pp. 57-76.
innovation
Chong, A.Y.L., Lim, E.T., Hua, X., Zheng, S. and Tan, C.-W. (2019), “Business on chain: a comparative
case study of five blockchain-inspired business models”, Journal of the Association for
ecosystems in
Information Systems, Vol. 20, p. 9. construction
Clohessy, T. and Acton, T. (2019), “Investigating the influence of organizational factors on blockchain
adoption: an innovation theory perspective”, Industrial Management and Data Systems, Vol. 19
No. 7, pp. 1457-1491. 691
Dainty, A., Leiringer, R., Fernie, S. and Harty, C. (2017), “BIM and the small construction firm: a critical
perspective”, Building Research and Information, Vol. 45 No. 6, pp. 696-709.
Dhanaraj, C. and Parkhe, A. (2006), “Orchestrating innovation networks”, Academy of Management
Review, Vol. 31, pp. 659-669.
Dicicco-Bloom, B. and Crabtree, B.F. (2006), “The qualitative research interview”, Medical Education,
Vol. 40, pp. 314-321.
Dutt, N., Hawn, O., Vidal, E., Chatterji, A., Mcgahan, A. and Mitchell, W. (2016), “How open system
intermediaries address institutional failures: the case of business incubators in emerging-
market countries”, Academy of Management Journal, Vol. 59, pp. 818-840.
Elghaish, F., Hosseini, M.R., Matarneh, S., Talebi, S., Wu, S., Martek, I., Poshdar, M. and Ghodrati, N.
(2021), “Blockchain and the ‘Internet of Things’ for the construction industry: research trends
and opportunities”, Automation in Construction, Vol. 132, p. 103942.
Giudici, A., Reinmoeller, P. and Ravasi, D. (2018), “Open-system orchestration as a relational source of
sensing capabilities: evidence from a venture association”, Academy of Management Journal,
Vol. 61, pp. 1369-1402.
Greco, M., Locatelli, G. and Lisi, S. (2017), “Open innovation in the power and energy sector: bringing
together government policies, companies’ interests, and academic essence”, Energy Policy,
Vol. 104, pp. 316-324.
Gulati, R. and Nickerson, J.A. (2008), “Interorganizational trust, governance choice, and exchange
performance”, Organization Science, Vol. 19, pp. 688-708.
Gupta, H., Kumar, S., Kusi-Sarpong, S., Jabbour, C.J.C. and Agyemang, M. (2020), “Enablers to supply
chain performance on the basis of digitization technologies”, Industrial Management and Data
Systems, Vol. 121 No. 9, pp. 1915-1938.
Hall, D.M., Whyte, J.K. and Lessing, J. (2020), “Mirror-breaking strategies to enable digital
manufacturing in Silicon Valley construction firms: a comparative case study”, Construction
Management and Economics, Vol. 38, pp. 322-339.
Houben, R. and Snyers, A. (2018), “Cryptocurrencies and blockchain: legal context and implications for
financial crime, money launderingand tax evasion”, Study requested by the TAX3 committee,
European Parliament, Bruxelles, available at: https://blog.elitex.ir/wp-content/uploads/2020/06/
Cryptocurrencies-and-Blockchain.pdf
Hsieh, H.-F. and Shannon, S.E. (2005), “Three approaches to qualitative content analysis”, Qualitative
Health Research, Vol. 15, pp. 1277-1288.
Hunhevicz, J.J. and Hall, D.M. (2020), “Do you need a blockchain in construction? Use case categories and
decision framework for DLT design options”, Advanced Engineering Informatics, Vol. 45, p. 101094.
Li, J. and Kassem, M. (2021), “Applications of distributed ledger technology (DLT) and Blockchain-
enabled smart contracts in construction”, Automation in Construction, Vol. 132, p. 103955.
Li, J., Greenwood, D. and Kassem, M. (2019), “Blockchain in the built environment and construction
industry: a systematic review, conceptual models and practical use cases”, Automation in
Construction, Vol. 102, pp. 288-307.
Lyytinen, K., Yoo, Y. and Boland, R.J. Jr (2016), “Digital product innovation within four classes of
innovation networks”, Information Systems Journal, Vol. 26, pp. 47-75.
IMDS Maciulien_e, M. and Skarzauskien_e, A. (2021), “Conceptualizing blockchain-based value co-creation: a
service science perspective”, Systems Research and Behavioral Science, Vol. 38, pp. 330-341.
123,2
Massa, L. and Tucci, C.L. (2013), “Business model innovation”, The Oxford Handbook of Innovation
Management, Vol. 20, pp. 420-441.
Moore, J.F. (1993), “Predators and prey: a new ecology of competition”, Harvard Business Review,
Vol. 71, pp. 75-86.
692 Moore, J.F. (2016), The Death of Competition: Leadership and Strategy in the Age of Business
Ecosystems, HarperCollins, New York.
Mu, W., Bian, Y. and Zhao, J.L. (2019), “The role of online leadership in open collaborative innovation”,
Industrial Management and Data Systems, Vol. 119 No. 9, pp. 1969-1987.
Nawari, N.O. and Ravindran, S. (2019), “Blockchain technology and BIM process: review and
potentialapplications”, Journal of Information Technology in Construction, Vol. 24,
pp. 209-238.
Papadonikolaki, E. (2018), “Loosely coupled systems of innovation: aligning BIM adoption with
implementation in Dutch construction”, Journal of Management in Engineering, Vol. 34, p. 05018009.
Papadonikolaki, E., Krystallis, I. and Morgan, B. (2022), “Digital technologies in built environment
projects: review and future directions”, Project Management Journal, Vol. 53 No. 5, pp. 501-519,
87569728211070225.
Paquin, R.L. and Howard-Grenville, J. (2013), “Blind dates and arranged marriages: longitudinal
processes of network orchestration”, Organization Studies, Vol. 34, pp. 1623-1653.
Perera, S., Nanayakkara, S., Rodrigo, M., Senaratne, S. and Weinand, R. (2020), “Blockchain
technology: is it hype or real in the construction industry?”, Journal of Industrial Information
Integration, Vol. 17, p. 100125.
Qian, X.A. and Papadonikolaki, E. (2020), “Shifting trust in construction supply chains through
blockchain technology”, Engineering, Construction and Architectural Management, Vol. 28
No. 2, pp. 584-602.
Reypens, C., Lievens, A. and Blazevic, V. (2019), “Hybrid Orchestration in Multi-stakeholder
Innovation Networks: practices of mobilizing multiple, diverse stakeholders across
organizational boundaries”, Organization Studies, Vol. 42 No. 1, pp. 61-83, 0170840619868268.
Sacks, R., Girolami, M. and Brilakis, I. (2020), “Building information modelling, artificial intelligence
and construction tech”, Developments in the Built Environment, Vol. 4, p. 100011.
Saldana, J. (2009), The Coding Manual for Qualitative Researchers, Sage, London.
Saunders, M., Lewis, P. and Thornhill, A. (2007), Research Methods for Business Students, 4th ed.,
Pearson Education, England.
Schumpeter, J.A. (1982), “The theory of economic development: an inquiry into profits, capital,
credit, interest, and the business cycle (1912/1934)”, Transaction Publishers, Vol. 1, p. 244,
1982–January.
Scott, D.J., Broyd, T. and Ma, L. (2021), “Exploratory literature review of blockchain in the
construction industry”, Automation in Construction, Vol. 132, 103914.
Sharma, R., Zhang, C., Wingreen, S.C., Kshetri, N. and Zahid, A. (2019), “Design of Blockchain-based
Precision Health-Care using soft systems methodology”, Industrial Management and Data
Systems, Vol. 120 No. 3, pp. 608-632.
Shoaib, M., Lim, M.K. and Wang, C. (2020), “An integrated framework to prioritize blockchain-based supply
chain success factors”, Industrial Management and Data Systems, Vol. 120 No. 11, pp. 2103-2131.
Tapscott, D. and Tapscott, A. (2016), Blockchain Revolution: How the Technology behind Bitcoin is
Changing Money, Business, and the World, Penguin, New York.
Teece, D.J. (1986), “Profiting from technological innovation: implications for integration, collaboration,
licensing and public policy”, Research Policy, Vol. 15, pp. 285-305.
Tezel, A., Papadonikolaki, E., Yitmen, I. and Hilletofth, P. (2020), “Preparing construction supply Blockchain
chains for blockchain technology: an investigation of its potential and future directions”,
Frontiers of Engineering Management, Vol. 7, pp. 547-563. innovation
Tezel, A., Febrero, P., Papadonikolaki, E. and Yitmen, I. (2021), “Insights into blockchain
ecosystems in
implementation in construction: models for supply chain management”, Journal of construction
Management in Engineering, Vol. 37 No. 4, pp. 04021038-1-04021038-19.
Treiblmaier, H. (2018), “The impact of the blockchain on the supply chain: a theory-based research
framework and a call for action”, Supply Chain Management: An International Journal, Vol. 23 693
No. 6, pp. 545-559.
Treiblmaier, H. (2020), “Toward more rigorous blockchain research: recommendations for writing
blockchain case studies”, Blockchain and Distributed Ledger Technology Use Cases, Springer.
Unalan, S. and Ozcan, S. (2020), “Democratising systems of innovations based on Blockchain platform
technologies”, Journal of Enterprise Information Management, Vol. 33 No. 6, pp. 1511-1536.
Valdez-Juarez, L.E. and Castillo-Vergara, M. (2021), “Technological capabilities, open innovation, and
eco-innovation: dynamic capabilities to increase corporate performance of SMEs”, Journal of
Open Innovation: Technology, Market, and Complexity, Vol. 7, p. 8.
West, J. (2003), “How open is open enough?: melding proprietary and open source platform strategies”,
Research Policy, Vol. 32, pp. 1259-1285.
Yoo, Y., Henfridsson, O. and Lyytinen, K. (2010), “Research commentary—the new organizing logic of
digital innovation: an agenda for information systems research”, Information Systems Research,
Vol. 21, pp. 724-735.
Zamani, E.D. and Giaglis, G.M. (2018), “With a little help from the miners: distributed ledger technology and
market disintermediation”, Industrial Management and Data Systems, Vol. 118 No. 3, pp. 637-652.

Appendix

Interview questions:
(1) What is your current industry and how would you describe your background, experience and
current role?
(2) How would you describe your current level of knowledge, expertise and experience with
blockchain technology?
(3) What is the potential of blockchain technology in construction and could it become or is it a
disruptive innovation? Do you reckon it is a true potential or hype/fad?
(4) What would be the greatest benefit of blockchain technology in construction and how could it
revolutionise it?
(5) How can blockchain support or improve the use of other technology-oriented processes in
construction (e.g. BIM)?
(6) What transformations, for example in skills, procurement (financial), legal and business
models are needed to harness the potential of blockchain technology in construction?
(7) How could blockchain technology change the trust in the construction ecosystem?
(8) Could blockchain help smaller organisations in construction in some ways to democratise
construction supply chains, for example facilitate their access to financial instruments without
having to go through third-party companies?
(9) What is the role of the following actors in controlling or democratising the blockchain
innovation ecosystem in construction? Who will be the potential orchestrator of the blockchain
innovation ecosystem? Who are the most important actors from the below:
IMDS  Government
123,2  Clients
 Financiers
 Owners/operators
 Consultants
694  Contractors
 Suppliers
 Manufacturers
 Users
 Are there any other actors not considered in this list crucial to innovation?
(10) What applications of blockchain technology in construction do you first see maturing first and
becoming mainstream?
(11) What should be the policymakers’ response to the increasing popularity of blockchain
technology in construction? And what should be their immediate steps to be taken?

About the authors

Dr Eleni Papadonikolaki ARB, MAPM, SFHEA, is an associate professor in digital innovation and
management at University College London (UCL), an executive educator and management consultant.
Bringing practical experience from a number of complex and international projects in Europe and the
Middle East, she is researching the interfaces between digital technology and engineering management.
Eleni is the author of over 70 peer-reviewed publications and has attracted and successfully delivered
collaborative research projects funded by European and UK research councils. She is the Founding
Director of the MSc Digital Engineering Management at UCL where she develops the new generation of
leaders in digital transformation.
Dr Algan Tezel is a programme director and lecturer in construction management and engineering at
Aston University. He holds a PhD in construction management from the School of the Built Environment
at the University of Salford. His research interests include construction production management, lean
construction and digital construction. He is a civil engineer with 5 years of practical industry experience.
Dr. Ibrahim Yitmen is an associate professor in management of construction production at
J€onk€oping University, Sweden. His research focus is mainly on innovation in construction involving
socio-technical issues regarding digital transformation in AEC industry, and his special interest is on
digital twin-based Smart Built Environment, integration of Digital Twins And Deep Learning For
Construction 4.0 and blockchain technology in construction supply chains. Ibrahim is the author of over
80 research papers in refereed international journals and in peer-reviewed conference proceedings. He
has been contributing as project leader and researcher to the research projects funded by Smart Built
Environment, which is a strategic innovation programme in Sweden.
Per Hilletofth (PhD) is a professor of industrial management at the University of G€avle in Sweden,
and visiting professor at University West in Sweden. His research focuses on operations strategy,
manufacturing location, supply chain design, new product development and demand and supply
integration. He has published articles in international journals including International Journal of
Production Economics, Supply Chain Management: An International Journal, Production Planning and
Control, Expert Systems with Applications, Industrial Management and Data Systems, Journal of Cleaner
Production and European Business Review. He has editorial assignments in several international
journals. Per Hilletofth is the corresponding author and can be contacted at: [email protected]

For instructions on how to order reprints of this article, please visit our website:
www.emeraldgrouppublishing.com/licensing/reprints.htm
Or contact us for further details: [email protected]