Factors Affecting the Competitiveness and Innovation in Northern Iraq Construction Industry

Innovation is the process of creating and implementing new ideas for the community, while competitiveness is the ability of a firm to provide the community standard quality services at competitive costs. Creativity and innovation have always been recognized as the foundation of success of any organization, as is the case for the construction industry worldwide. However, without taking the competitiveness in consideration, the prosperity process would be difficult. Over the past decade, the construction industry has been grown dramatically in Iraq, especially in northern region of the country. To keep the industry firms on the success path by way of making them innovative and competitive, examining factors affecting innovation and competitiveness is crucial. With this aim, this research is conducted so as to identify the factors influencing innovation and competitiveness of the firms. Literature review about innovation and competitiveness was reviewed to identify the factors affecting the innovation and competitiveness of construction projects. Pilot study of the questionnaire was achieved by a scouting sample. A questionnaire survey was conducted and 43 factors were identified, categorized into 7 groups of dimensions: 1) input, 2) driver, 3) barriers, 4) enabler, 5) impact, 6) competitiveness, and 7) firm’s need of innovation. 150 questionnaires were distributed to local construction firms. 85 questionnaires were received (57%). iv Four hypotheses addressing the improvements of firm’s project performance and their competitive advantages have been developed, a conceptual framework explaining the developed hypotheses are designed, ended up with recommendations to improve innovation, competitiveness and performance of construction projects in Northern Iraq. Two theories are presented by the study: 1) project performance and competitive advantages of construction firms increase by activating inputs, drivers, enablers and impacts of the innovation; 2) the firms incapable of overcoming barriers, incapable of improving their project performance and competitiveness. It is recommended for construction industry in the region to improve the factors that affect negatively on innovation and competitiveness through identifying a structured methodology and mechanism to: 1) improve Research and Development (R&D) expenditure and R&D projects; 2) consider the short and long term profitability; 3) increase the number of employees devoting innovation. Keywords: Competitiveness, Construction firms, Innovation, Northern Iraq Construction Industry.