Characteristics of Innovative Production Home Builders (2006)
Though not fully representative of the full homebuilding population, the 2003 study resulted in the following key findings:
- At the early stage of diffusion, national and regional firms, multifamily and modular builders, and single-family custom builders are more likely to adopt innovations than are local single-family production builders.
- Although sales and supplier representatives, subcontractors, and trade shows are important sources of information about new products and materials for all builders, earlystage adopters rely on technology transfer programs and universities more than middle or late-stage adopters.
- Although small, less established manufacturers often are the first to introduce new products, residential building construction adopters rely heavily on established manufacturers who stand behind their products.
- A key business strategy for over two-thirds of the builders in the survey was establishing a reputation for high quality and durable homes and quickly addressing any problems buyers reported in those homes.
- A higher level of adoption of new products, materials, and practices by home builders was generally associated with: having a technology advocate within the firm (most often the owner); a company emphasis on being creative and being the first to use new products and technology transfer programs; the use of union labor (at least some of the time); and explicit demand from informed homebuyers.
- In contrast, a lower level of adoption was generally associated with local production builders and builders who emphasize marketability and profit, who associate the firm’s success with land development, and who emphasize the “tried and true” rather than risking new materials and products.
The 2003 report’s analysis of annual diffusion rates for specific technologies from 1995 to 2001 in the ABPS demonstrated even further complexity. Diffusion of some technologies began with larger builders, while small builders spearheaded the adoption of others. Similarly, some technologies entered the market in more expensive homes and others in low cost homes. These differences reflected the relative advantages of these products within regions, differences in supply and demand between market segments, variances in distribution and access to technologies, and different business philosophies and strategies. As an example of the last potential cause for innovation variances, large builders appeared to stress cost savings, improvements in production, reduced call-backs, or reduced exposure to liability, whereas smaller builders stressed high consumer awareness (demand pull) and were less concerned about price or impact on production processes.