'INNObau' Final Report and Practical Guide Published

The project, funded by the Baden-Württemberg Ministry of Economic Affairs, Labor, and Tourism, was completed in the fall of 2025 by a consortium comprising the University of Stuttgart, the Fraunhofer Institute for Building Physics IBP, and the Institute for SME Research (ifm) at the University of Mannheim.

Background and Research Question

Despite its economic significance—accounting for approximately 15% of gross value added—the real estate and construction industry ranks among the sectors with comparatively low innovation dynamics. Small and medium-sized enterprises (SMEs), which form the structural backbone of the industry, face particular challenges: a highly fragmented value chain, a high density of regulations, and a pronounced shortage of skilled workers make it difficult to introduce and scale innovations. At the same time, technologies and methods such as Building Information Modeling (BIM), hybrid timber construction, modular construction, and urban mining demonstrate that gains in efficiency and sustainability are achievable in the construction sector.

Within this context, INNObau investigated how innovation and knowledge transfer management in SMEs in the construction industry can be systematically strengthened—both at the level of individual construction projects and at the organizational level.

The Institute for SME Research (ifm) at the University of Mannheim was responsible for the organizational research perspective of the project. The focus was on analyzing the conditions under which innovations can be formally anchored in structures and processes and cognitively embedded in the organizational culture. The project also drew on the ifm’s long-standing experience in research on organizational fields and digitalization in the construction industry, which the institute has built up through transfer projects such as BIMiD and the Mittelstand-Digital Zentrum Bau, among others.

The empirical basis for the “INNOBau” research project was provided by focus groups with company representatives from planning, construction, and project development. The participants provided insights into successful and failed innovation projects, reported on established innovation management methods in their companies, and discussed perceived needs. These experiences were systematically integrated into existing organizational and innovation theory research and formed the empirical basis for deriving fields of action and options. 

Key Findings

The core output of the project is an innovation management matrix that combines two perspectives on innovation processes: It systematizes relevant types of innovation in the construction and real estate industry—ranging from process and procedural innovations to structural and cultural changes, and on to product and service innovations—and links these to a model of organizational change that takes into account both internal organizational adjustments and embedding within overarching market and regulatory structures. Four application examples—covering BIM, wood-hybrid construction, urban mining, and modular construction—illustrate the use of the matrix through relevant innovation topics in the industry.

At the corporate level, fields of action and options were developed that aim to formally embed innovation topics in organizational structures and processes as well as to cognitively embed them in the organizational culture—ranging from strategic alignment and the design of organizational frameworks to the management of change processes.

At the construction project level, areas of action and options were developed that aim to systematically identify and implement innovations in day-to-day project work—taking into account the specific stakeholder and collaboration structures of temporary construction projects. The focus is on securing commitment among project participants, promoting cooperative working methods, and shifting from thinking in terms of individual projects to transferable, scalable product solutions. The complete final report and a practical guide are available for download on the website of the Baden-Württemberg Strategy Dialogue on “Affordable Housing and Innovative Construction.”