Technological Capabilities of Medium-Sized Contractors in Indonesia
Main Article Content
Abstract
The construction industry plays a significant role in national development and economic growth of Indonesia. Contractors are key actors in the construction industry and manage large amounts of construction resources and activities. While the demand for improving the nation's infrastructure is on the rise, the question remains whether the industry, especially contractors, will be able to fulfil this demand. This study investigates whether contractors include technological capabilities as an important part of their company strategies for addressing the dynamics of the construction industry. In particular, it aims to understand how contractors develop and improve their technological capabilities through a technological learning process (exploration, acquisition and internalisation). The investigation focuses on medium-sized contractors, who often play an important role as part of the supply chain for larger contractors. A model is developed to represent the dynamic interactions between key factors that influence the way contractors select and use technology to enhance their performance. Data were collected through a survey and were then used to map the contractors' development of technological capabilities. The study reveals that medium-sized contractors have yet to consider the development of technological capabilities as strategic. The results are expected to benefit the regulator and construction companies in Indonesia in their efforts to improve the performance of the country's construction industry.
Article Details
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
Abduh, M. and Pribadi, K.S. (2014). Harmonizing the Indonesian construction resources supply chain. Paper presented at the Asia Construct Conference 2014. Hong Kong, 13–14 November.
Alina, S., Eta W., Nor Hazana A. and Nor Kamariah, K. (2012). In Proceedings International Conference of Technology Management, Business and Entrepreneurship 2012 (ICTMBE2012). Melaka, Malaysia: ICTMBE2021, 279–299.
Amaratunga, R.D.G., Rameezdeen, R. and Shanmugam, M. (2005). Transfer of technology in construction: Absorption capacity and internalisation. In L. Ruddock, D. Amaratunga, G. Aouad, R. Haigh, M. Kagioglou and M. Sexton (eds.), Proceedings of the Fifth International Postgraduate Research Conference, 14–15 April 2005, University of Salford. Vol. 2. Salford, UK: Research Institute for the Built and Human Environment, 628–636.
Budiwibowo, A., Trigunarsyah, B., Abidin, I.S. and Soeparto, H.G. (2009). Competitiveness of the Indonesian construction industry. Journal of Construction in Developing Countries, 14(1): 51–68.
Chen, W.T., Chen, T.T, Lu, C.S. and Liu S.S. (2012). Analyzing relationships among success variables of construction partnering using structural equation modelling: A case study of Taiwan's construction industry. Journal of Civil Engineering and Management, 18(6): 783–794. https://doi.org/10.3846/13923730.2012.735062.
Chinda, T. and Mohamed, S. (2008). Structural equation model of construction safety culture. Engineering, Construction and Architectural Management, 36(1): 114–131. https://doi.org/10.1108/09699980810852655.
Chinowsky, P. (2001). Strategic management in engineering organizations. Journal of Management in Engineering, 17(2): 60–68. https://doi.org/10.1061/(ASCE)0742-597X(2001)17:2(60).
Dahlman, C.J. and Westphal, L.E. (1981). The meaning of technological mastery in relation to transfer of technology. Annals of the American Academy of Political and Social Sciences, 458(1): 12–26.
Egmond, E.V. and Smook, R.A. (2001). The technology mapping methodology for benchmarking the construction performance. In Proceedings: CIB World Building Congress. Salford, UK: CIB, 1–12.
Julison, B., Wardani, S.P.R. and Wibowo, M.A. (2017). Innovation performance of large contractor in Indonesia: Influencing factors and its impact on firm's performance. Procedia Engineering, 171: 370–378. https://doi.org/10.1016/j.proeng.2017.01.346.
Kumar, V., Kumar, U. and Persaud, A. (1999). Building technological capability through importing technology: The case of Indonesian manufacturing industry. The Journal of Technology Transfer, 24: 81–96. https://doi.org/10.1023/A:1007728921126.
Liu, J.-J., Qian, J.-Y. and Chen, J. (2006). Technological learning and firm-level technological capability building: Analytical framework and evidence from Chinese manufacturing firms. International Journal of Technology Management, 36(1/2/3): 190–208. https://doi.org/10.1504/IJTM.2006.009968.
Loosemore, M. (2014). Improving construction productivity: A subcontractor's perspective. Engineering, Construction and Architectural Management, 21(3): 245–260. https://doi.org/10.1108/ECAM-05-2013-0043.
Mahdiputra, S., Giddings, B., Hogg, K. and Daws, M. (2005). Organisational learning in construction companies. In L.
Ruddock, D. Amaratunga, G. Aouad, R. Haigh, M. Kagioglou and M. Sexton (eds.), Proceedings of the Fifth International Postgraduate Research Conference, 14–15 April 2005, University of Salford. Vol. 2. Salford, UK: Research Institute for the Built and Human Environment, 696–711.
Marcelle, G.M. (2004). Technological Learning: A Strategic Imperative for Firms in the Developing World. Cheltenham/Northampton: Edward Elgar Publishing.
McKinsey Global Institute (2017). Reinventing Construction: A Route to Higher Productivity. New York: McKinsey & Company.
Molwus, J.J., Erdogan, B. and Ogunlana, S. (2017). Using structural equation modeling (SEM) to understand the relationship among critical success factors (CSFs) for stakeholder management in construction. Engineering Construction and Architectural Management, 24(3): 426–450. https://doi.org/10.1108/ECAM-10-2015-0161.
Nurazwa, A., Siti Norezam, O. and Halim, M.L. (2014). A review of technological capability and performance relationship in manufacturing companies. In Proceedings: 2014 International Symposium on Technology Management and Emerging Technologies. Danvers, MA: Institute of Electrical and Electronics Engineers (IEEE), 193–198. https://doi.org/10.1109/ISTMET.2014.6936505.
Osei, V. (2013). The construction industry and its linkages to the Ghanaian economy: Policies to improve the sector's performance. International Journal of Development and Economic Sustainability, 1(1): 56–72.
Oti-Sarpong, K. and Leiringer, R. (2016). The role of learning in construction technology transfer: A "SCOT" perspective. In P.W. Chan and C.J. Neilson (eds.), Proceedings of the 32nd Annual Conference. Vol. 2. Manchester: Association of Researchers in Construction Management (ARCOM), 699–708.
Pamulu, M.S. (2010). Strategic management practices in the construction industry: A study of Indonesian enterprises. PhD diss. Queensland University of Technology.
Panda, H. and Ramanathan, K. (1996). Technological capability assessment of a firm in the electricity sector. Technovation, 16(10): 561–588. https://doi.org/10.1016/S0166-4972(97)82896-9.
Sarstedt, M., Hair, J.F. and Ringle, C.M. (2016). Estimation issues with PLS and CBSEM: Where the bias lies. Journal of Business Research, 69: 3998–4010. https://doi.org/10.1016/j.jbusres.2016.06.007.
Sazali, A.W., Raduan, C.R. and Suzana, I.W.O. (2012). Defining the concepts of technology and technology transfer: A literature analysis. International Business Research, 5(1): 61–71. https://doi.org/10.5539/ibr.v5n1p61.
Sekarsari, J. (2005). Knowledge management employed by firms: A study of the Indonesian construction contractors. Paper presented at the Seminar 25 Tahun MRK ITB, Bandung, Indonesia, 18–19 August.
Sepasgozar, S., Loosemore, M. and Davis, S. (2016). Conceptualising information and equipment technology adoption in construction: A critical review of existing research. Engineering, Construction and Architectural Management, 23(2): 158–176. https://doi.org/10.1108/ECAM-05-2015-0083.
Skibniewski, M.J. and Chao, L.C. (1992). Evaluation of advanced construction technology with AHP method. Journal of Construction Engineering and Management, 118(3): 577–593. http://dx.doi.org/10.1061/(ASCE)0733-9364(1992)118:3(577).
Sobanke, V., Adegbite, S., Ilori, M. and Egbetokun, A. (2014). Determinants of technological capability of firms in a developing country. Procedia Engineering, 69: 991–1000. https://doi.org/10.1016/j.proeng.2014.03.081.
Soemardi, B. and Pribadi, K.S. (2019). Country Report: Indonesia Construction Sector. Madurai, India: AsiaConstruct.
Soemardi, B., Kusuma, B. and Abduh, M. (2020). Technology assessment in Indonesian construction industry. IOP Conference Series: Material Sciences and Engineering, 849: 012077. https://doi.org/10.1088/1757-899X/849/1/012077.
Tsai, K.H. and Wang, J.C. (2008). External technology acquisition and firm performance: A longitudinal study. Journal of Business Venturing, 23: 91–112. https://doi.org/10.1016/j.jbusvent.2005.07.002.
Wasif, I., Josephson, P.E. and Styhre, A. (2008). Individual learning in construction projects: Professions and their approaches. The Australasian Journal of Construction Economics and Building, 8(2): 50–60. https://doi.org/10.5130/AJCEB.v8i2.3006.