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Nieuw onderzoek innovatie onder Noord-Nederlandse architecten

Datum:04 november 2016

Killian J McCarthy and Thijs Broekhuizen, from the Faculty of Economic and Business’ Innovation and Organisation Research Group, were awarded an NWO (NL: Nederlandse Organisatie voor Wetenschappelijk Onderzoek,  EN: Netherlands Organisation for Scientific Research) grant of 20,000 euro on Monday, to study innovation in the Dutch Architecture Industry in the North of the Netherlands.

A description of their project:
The Netherlands has long been known for its design industries, and architecture is an important part of this industry. Since the financial crisis, however, the basis of competition has ‘shifted’ -- from ‘quality’ to ‘price competition’ -- and as profit margins have shrunk, the industry has struggled. The shift has two effects. Firstly, it has increased the number of market exits (bankruptcies) and the number of within-industry consolidations (M&As), which has increased the level of concentration. Research shows that increased concentration reduces the incentives to innovate. Secondly, it has changed the industry’s investment strategies. In a ‘quality’ based industry, there are strong incentives to invest in new knowledge and technology, to increase innovation, but in a ‘price’ based industry, the focus shifts to cost-cutting and to outsourcing, which in turn decreases innovation. In the short term, a focus on prices is not harmful. In the long term however, it results in a destructive race-to-the-bottom, which threatens the industry’s international position. The industry, therefore, needs to find ways to better ‘capture value’, to refocus on innovation. This project aims to help the architecture industry to achieve those goals. It will: (1) ‘map’ the industry – in terms of its innovation, its market entrant, exits, and acquisitions – to paint a picture of its current health; (2) look to other industries, to find potentially transferable solutions; and will (3) make recommendations to the industry, its associations, and local government, on how to help.