Building resilience: navigating the barriers of innovation in construction SMES of Sri Lanka

Abstract

Small and Medium Enterprises (SMEs) are recognised as a crucial sector responsible for the growth and social development of Sri Lanka. However, compared with global trends, many sectors of Sri Lanka's SMEs are far behind in embracing innovation. The Sri Lankan construction sector is no exception, as it continues to face various barriers in implementing innovation day by day. The primary reasons are some barriers that negatively affect the project's performance. This study aims to investigate these specific barriers, with a particular focus on construction SMEs in Sri Lanka, and to address a gap in the existing literature. The study adopted a mixed approach following a comprehensive literature review. Data were collected through semi-structured interviews conducted with 8 construction SME owners/managers. To assess the impact of barriers on innovation adoption, a 5-point Likert scale was included in the interview guideline. The collected data were then analysed using both code-based content analysis and descriptive statistical tools such as percentages, means, and weighted averages. The author identified several barriers with high impacts: high costs of obtaining external capital and lack of access to finance were identified as barriers with very high impact, lack of or insufficient access to knowledge, lack of skilled workers, lack of government support, low level of innovation on the market, and no infrastructure available on the market. The study proposes a set of strategies to enhance awareness of innovation within the construction sector. It concludes that improving the innovative performance of Sri Lankan SMEs and enabling them to compete globally requires reducing or eliminating the identified barriers. The study suggests promoting industry-wide collaboration by establishing innovation hubs and events that showcase innovation and foster knowledge exchange among organisations. The study may help industry practitioners identify barriers and take proactive measures to overcome them.