Service-dominant innovation in the built environment

The main aim of this paper is to examine how commercial sustainability innovation projects in real estate and construction industries utilise the contemporary market-oriented innovation models based on the service-dominant logic. A survey of a large set of sustainability innovation projects was conducted and analysed. The results show that over a third of the examined projects lack all the necessary innovation components recognised in the literature. Furthermore, very few projects utilised concurrent market feedback in the development phase. The study suggests that sustainability innovations fail commercially in built environment, because they lack active customer participation and value network involvement, and they aim for incremental instead of radical improvements. Future research should address available ways for companies in the real estate and construction industries to take advantage of their unused potential in climate change mitigation business through innovation. Organisations striving for sustainability innovations should aim at radical instead of incremental innovation, and focus on customer participation and involvement of the value network. The innovation processes in the construction sector could be organised better by utilising tested service-dominant models. This study is among the first to address innovation elements based on the service-dominant logic in analysing projects aiming at sustainability innovation in real estate and construction industries.