Sources of technical innovation in the network of companies providing chemical process plant and equipment

The purpose of this paper is to explore issues concerning technological innovation in the network of firms linked to the chemical industry, with particular reference to the process plant contracting industry. While technological and economic maturity inhibit the research and development activities of plant contractors, little evidence was found of contractors adopting novel strategies to capture special advantage from technology developed by equipment manufacturing firms. It is suggested that the changing economic and technological environment is creating a climate where new or closer contractor-equipment manufacturer relationships should receive greater attention. Appropriate alliances between contractors and equipment manufacturers can not only help to reduce plant design, procurement and erection costs, but also offer a means to counter the competitive threat from more specialist firms; in particular the large equipment manufacturers that possess their own project contracting skills. Furthermore, collaboration in niche and 'technology fusion' type innovation offers a means of generating scope for technological competitive advantage, whilst sharing cost and risk. Whilst contractor-equipment manufacturer alliances are one option the nature of the market demands operating company involvement to facilitate commercialisation.